Perryman Group study details importance of Permian energy to global economy

Economist Ray Perryman has long studied the importance of energy to state, national and global economies. He has also long studied the importance of the Permian Basin for these economies.

As energy concerns – concerns about supplies and high prices – have taken center stage globally this year, Perryman and his team of analysts and researchers decided to revisit the importance of the Permian Basin and Texas to global energy supply.

The study noted that the state and its producing areas have been a major source of oil and gas production for decades, but renewable energy is emerging as another important and growing sector.


“As global energy needs grow, Texas will continue to be a crucial producer of fuels from both traditional oil and gas sources and renewable energy sources,” the report said. “Texas and its producing regions are critical to meeting the world’s future energy needs, and with new advances, they can do so while bolstering global efforts to address pressing climate challenges and fostering the economic growth needed to improve billion lives.”

Perryman told the Reporter-Telegram via email that his goal in the two-part study was first to capture how vast and important the Permian Basin is and how important it is to the global economy.

“I think we sometimes lose sight of that,” he wrote. “Furthermore, I think it is imperative that lawmakers and regulators take into account the reality of the situation. We have to deal with climate change, but we also have to produce more oil and gas in the future.

Even taking the Department of Energy’s recent global energy demand forecast, each scenario indicates that the world will need more oil and gas in 2050 than is used today, even with growth. explosive from renewable sources – which is also necessary, he wrote. Baseline scenarios predict over 30% more oil and 30% more natural gas by 2050.

“Given this reality, it makes sense to produce oil with relatively low carbon content as well as to implement capture technology and other methods to improve the environmental effects of these resources,” Perryman wrote.

A particularly attractive aspect of the Permian Basin energy complex that should influence future growth is the low-carbon nature of the crude oil found in the region, according to Perryman’s study. The carbon dioxide (CO2) content is 22.8% lower than the average for the rest of world production. Permian oil has a 57.6% advantage over Middle Eastern oil and is 74.4% lower than the CO2 content of tight sand formations. It is also significantly cleaner than Mayan oil from Mexico and production from Nigeria.

“In fact, Permian Basin oil exhibits the most attractive low-carbon characteristics of any major land formation in the world. On an energy equivalent basis, low-carbon oil from the Permian Basin has 42.5% fewer CO2 emissions than coal (compared to just 25.2% for the rest of the world’s oil). Natural gas emissions compared to coal are 46.2% lower (or 60.0% when supplemented with carbon capture technology),” the study states.

“I also wanted to emphasize that the territory will also be a major player in alternative energies. In addition to having climate and land use characteristics that can support renewable development, I think people often lose sight of one of our greatest resources in the region – the intellectual capital around energy that resides in the Permian Basin. This region has over a century of continuous energy development and has been a driving force in many technologies that have made exploration, production, transportation and consumption more efficient,” he wrote.

Perryman wrote that his end goal in publishing the report was to make the case that Permian Basin energy can not only play a positive role in solving climate problems, but is also absolutely essential in promoting growth and development. global well-being.

“More than 80% of new energy demand is in emerging countries, whatever the scenario. Three billion people worldwide live on around $3.00 a day or less. About 700 million people – twice the population of the United States – live on $1.90 a day or less. The lives of these people can only be improved through economic growth, and that requires the energy responsibly produced in the Permian Basin,” he wrote.

As the United States – and countries around the world – face the challenge of providing reliable, affordable and clean energy to promote economic growth while fighting climate change, Perryman called for a strategy that recognizes nature of climate change and the need for coordinated action. international response including developing countries.

“The rapid development of reliable renewable energy resources with adequate back-up power as needed should be supported,” according to the study. “Policies must also promote research and implementation to facilitate the growth of battery and storage technology, efficiency, carbon capture and reduction, and other key solution areas.

“At the same time, effective policy should encourage the responsible development of low-carbon oil, natural gas, and other domestic resources and associated infrastructure that are essential to a meaningful climate solution.”

Perryman added that the vital role those working in oil and gas play must also be recognized.

“People who work in the oil and gas sector are misrepresented in political speeches, movies and TV shows, and other places. In fact, they play a vital role in our future and should be celebrated. The Permian Basin is not part of the problem – it is an integral and indispensable part of the solution,” he wrote.