In Odessa, it is fortunate that the deceased cannot complain about the racket made by their neighbors downstairs: in this city which adjoins that of Midland, in west Texas, an oil company has just received authorization to drill horizontally beneath the ground of the county cemetery. The drilling, the local television station specifies, “occurs thousands of feet underground, so any threat to surface structures is minimal to non-existent. This means it is possible to extract previously inaccessible natural resources and let the dead rest in peace.” So goes Texas, so goes America: a country in the midst of an oil and gas boom, where the slightest plot rich in hydrocarbons arouses desire.
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Odessa and Midland, the city where former President George W. Bush grew up, are located on the Permian Basin, one of the world’s largest hydrocarbon deposits, which has quadrupled its production in ten years and provides more than 18% of national natural gas production. But in reality, the phenomenon extends to the entire country. Oil production has reached record levels since Donald Trump’s presidency. The United States has even recently become a net exporter of oil, natural gas and coal.
LNG exports expected to more than double
At the origin of this miracle, the fracking, a hydraulic fracturing technique that releases oil and gas lodged beneath the rock. “There were two stages,” explains Emmanuel Henriet, an energy expert based in Houston, who today advises the French Development Agency. The technology itself became mature in the early 2000s [les tout premiers puits de fracking remontent à 1995] ; but where it really started in production was at the end of the 2000s [avec le forage horizontal]. We saw a big boom, worthy of the wild west. Then, prices crashed in 2015-2016, there was no longer any profitability and a very large number of players disappeared. But since the end of the Covid pandemic, exploitation has resumed and continues to increase. »
This explosion of operations is accompanied by the large-scale construction of liquefied natural gas (LNG) export terminals. The Russian-Ukrainian conflict has kicked into high gear: since the start of the invasion of Putin’s army in February 2022, 57 supply agreements have been signed, four times more than in the 2020-2021 period. LNG exports are expected to more than double by the end of the decade.
The era of huge pure players
The last four oil booms lasted six years on average, this one has only just entered its fifth year and no one sees a collapse on the horizon. On the contrary, a gigantic movement of concentration has begun, with the value of deals signed in 2024 on track to beat last year’s record ($192 billion).
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The era of wildcattersthese drilling cowboys whose fortunes swelled and collapsed to the rhythm of booms and crashes, are now giving way to the majors and a few huge pure players (companies specializing in extraction). Diamondback Energy announced last February the $26 billion acquisition of Endeavor Energy Resources, a company founded by Autry Stephens, 85, a wildcatter who grew up on a farm in Texas before finding himself operating more than 1,100 drilling wells producing 400,000 barrels of oil per day. For its part, ExxonMobil has just finalized the acquisition of Pioneer for $60 billion.
Drilling optimization
The mastery of horizontal drilling was followed by other innovations, such as fracking high intensity, increased pump power and now artificial intelligence. “For shale gas or oil, you have to drill a considerable number of wells,” explains Jean-Jacques Paufiques, president of Jelec USA, an engineering company based in Houston. It was relatively expensive, but with the improvement of methods and equipment, they have optimized drilling time: as many wells are drilled today, with 500 drilling platforms in operation, as twenty years ago with four times more platforms. »
An important activity of his company consists of providing units of fracking electrical. “Before, we used a trailer with a pump driven by a diesel engine, around fifteen or twenty were needed, with all the inconveniences associated with fuel oil supply. Today, a turbine runs on natural gas coming out of the well and provides electricity. »
The dangers of fracking
Despite this evolution towards less environmentally destructive techniques, opposition to fracking remains very real in a large part of American public opinion. In August 2023, three studies from the University of Pittsburgh, Pennsylvania, found increased risks of asthma, childhood lymphoma and low birth weight in children living near health facilities. fracking. Obviously, manufacturers contest the rigor of these studies.
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Last January, the Biden administration ordered a pause on approving new LNG export plants, winning over environmental groups and sparking fury from the oil industry, Republicans and voters (including Democrats) from producing regions. Like so many other subjects, the fracking lays bare America’s fault lines.
BlackRock, the friend of oil cowboys
Gone are the days when BlackRock presented itself as the most eco-friendly American asset manager. Last November, Larry Fink’s fund, which manages no less than $10,000 billion in assets, came to provide significant support to the Texas oil cowboy. He signed with Occidental Petroleum, the local black gold magnate, for the construction of a giant carbon dioxide capture unit. BlackRock will own 40% of this plant, considered the largest in the world, with no less than 500,000 tonnes of gas swallowed up each year.
For the oil tankers, this gesture from the one they considered the most woke of American investors is a godsend. This technology will allow them to continue their production of black gold at full speed rather than diversifying into renewables, which are less lucrative. Last year, the think tank Carbon Tracker had already highlighted BlackRock’s paradigm shift, revealing that it held $116 billion in oil and gas asset values. Not nothing for the man who, two years ago, presented himself as the standard-bearer of green finance.
By Thiébault Dromard
