There was a bit of unusual news in the oil sector this week when a major Tokyo company paid $1.3 billion for a 35% stake in Hunt Oil Company’s holdings in the Texas shale formation, Eagle Ford, and said it planned to drill several hundred wells on the site over the next five to ten years.
People often think of the state of Texas when you bring up the topic of oil and gas. But they don’t think as often about shale, which only in recent years has emerged as one of the most promising new sources of fuel. And, they’re even less likely to think of foreign investors. Yet, here we have foreign investors betting on southeast Texas as the next big thing in the energy world. The fact that the Eagle Ford Shale is generating so much worldwide interest is a strong testament to the ability of the American oil and gas industry to evolve. It also shows how we have, right here within our borders, a resource that is a potential game changer in geopolitics.
The Eagle Ford Shale in Texas is one of several shale formations around the U.S. that have been identified as major sources of oil and gas. Like Eagle Ford, several of these formations have recently generated international investor interest from China to France. Last year, overseas offers for U.S. oil and gas topped $51 billion. The oil and gas reserves of Eagle Ford alone are estimated at three billion barrels with potential output of 420,000 barrels per day, an amount that could make a meaningful reduction in the quantity of oil we import.
When we make the most of our natural resources like Eagle Ford, we can also make a meaningful difference in the amount we all pay for fuel, not just at the pump but in our homes, and in all the food and consumer goods whose prices are influenced by fuel costs. At a time when just the threat of a blockage of the Strait of Hormuz in Iran is rattling world oil prices, it is difficult to overemphasize the value of our own fuel reserves, not only in ensuring steady supply, but in helping to stabilize prices.
And like many of the shale formations around the country where development has recently commenced, the Eagle Ford shale also offers potential as a powerful economic engine. Now in its infancy, it already supports more than 12,000 full-time jobs and generates about $60 million in revenues for the state of Texas. If development continues to accelerate, it could support the construction of pipelines in the region, leading to more jobs and more revenue.
The Eagle Ford, along with a handful of other U.S. shale plays, could revolutionize domestic energy production, revitalize our economy, and shield us from the geopolitical volatility beyond our borders. This could truly be a game changer.