Oil prices could soon fall with the discovery of 20 new onshore oil fields in West Texas, which not only will boost the U.S. economy but also will line up with Saudi Prince Al-Waleed bin Talal’s hope for lower oil prices -- just not quite in a way he likes.
Talal told CNN on Sunday that he wants oil prices to drop from about $100 a gallon, where they are currently, to $70-80 a gallon. The lower prices will keep U.S. and Europe dependent on oil rather than rushing to find other energy sources, he said.
“We don’t want the West to go and find alternatives, because, clearly, the higher the price of oil goes, the more they have incentives to go and find alternatives,” he told CNN on Sunday.
Talal might get his wish if Texans continue with plans to drill 3,000 wells in the next year. This could increase the country’s oil output by 25 percent within 10 years, although unfortunately for Talal, that would decrease U.S. dependence on foreign fuel.
Oil drilling in Texas experienced a resurgence beginning five years ago with increased use of a technique called hydraulic fracturing, or "fracking." The method has been used in Texas and Oklahoma for 60 years, especially in natural gas drilling. But it was recently found to work in tapping large quantities of oil by penetrating shale formations that were previously unreachable. Fracking requires injecting large quantities of water and selected chemicals into shale formations thousands of feet below the earth's surface.
A few obstacles could stand in the way of the Texas drilling expansion because environmentalists claim fracking pollutes drinking water. But U.S. Environmental Protection Agency administrator Lisa Jackson recently told Congress she knows of no proven examples of such water pollution. And industry experts say it is unlikely to happen because fracking is done thousands of feet below the water table.
Environmentalists also question the kinds of chemicals used in fracking. A bill has been introduced in the Texas legislature
requiring drillers to disclose the contents of their fracking solutions.
There is another wrinkle here. The 3-inch dunes sagebrush lizard could hinder drilling in West Texas, as it could be named a new endangered species. If put on the list in December, drillers fear the lizard’s new status would slow down or halt drilling in the area.