France’s largest oil company is about to become the only company with hydraulic fracturing, or fracking, operations in Texas’s Barnett Shale formation.
The oil company Total will soon be the sole Barnett Shale fracker after Chesapeake Energy stopped drilling new wells in the shale formation because natural gas prices were too low. Total will pay pipeline company Williams Partners $420 million for a “a fully restructured, competitive gas-gathering agreement.”
“With the new conditions created by the exit of Chesapeake and the associated restructuring of the midstream contracts, we believe that we can extract significant value from the substantial, well-located resource base of the play,” José Ignacio Sanz, Total’s president of U.S. operations, told The Wall Street Journal.
The move is expected to boost the company’s total U.S. production up another 65,000 barrels per day, from its current 89,000 barrels a day.
Fracking in the Barnett Shale has produced more than 15 trillion cubic feet of natural gas since 2003, enough to heat 225 million homes for a year. The fracking industry in Texas produces $11.8 billion in annual economic output and has created more than 107,000 permanent jobs.
With current fracking technology, the Barnett Shale has an estimated 172 million barrels of shale oil and 176 million barrels of natural gas liquids, according to a December study by the U.S. Geological Survey. To put those reserves in some context, Saudi Arabia’s total proven oil reserves are estimated to be 268 billion barrels, according to the CIA.
Lower natural gas prices from fracking saved the average Texan $432 every year in energy and home heating costs between 2007 and 2013. A similar report published in May by the federal Energy Information Administration found that cheap oil and natural gas provided by fracking lowered the annual cost of living for the average American by almost $750.
It’s good news for Texas. That investment could have happened in Total’s home country, but France has banned fracking since 2013.
France caved to environmentalists and banned fracking three years ago, and roughly 40 percent of the natural gas imported by France’s utilities comes from U.S. fracking. French government officials announced in May that they are looking to ban the import of fracked natural gas from America.
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