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San Juan Shale Oil, Farmington, NM and I’m all for a Railroad

Posted by Pete | Posted in News | Posted on 03-11-2011


San Juan Shale May be poised for Next Boom, by Kurt Madar, The Daily Times, Farmington, NM….According to this article, Steve Dunn of Merrion Oil and Gas, that his company is in the middle of negotiations to start drilling for oil in San Juan Basin Shale, which could fuel the next extraction boom in the state of New Mexico.  He expects some results by next summer. Horizontal drilling and hydraulic fracturing have changed the type of rock that oil and gas companies can profitably drill. Because of these changes, huge amounts of oil once thought unreachable in San Juan Basin’s Mancos Shale deposits now are within reach.. With the new technologies, companies can start tapping shale formations for both natural gas and oil.. Steve Dunn estimates that the basin has about 30 billion barrels of oil in the Mancos formation, of that he figures 1.5 billion is recoverable. He said that in the last 30 years the basin has produced some 300 million barrels…..That is quite the oil reserve if you ask me and of course, it is very good news for the Farmington area and for New Mexico…..We will keep you posted on this drilling news as it develops….Did you know there is no railroad serving the Farmington and Bloomfield areas, a major oil and gas production area….No rail service…Amazing….You would think one of the railroads would try to capitalize on that, wouldn’t you? Gov. Bill Richardson built the Railrunner with passenger service only from Belen to Santa Fe, on exiting tracks for the most part, it is not a paying deal and probably never will be, but he did it.   You would think that rail service, say Gallup to Farmington, NM, a distance of 133 miles would be a lot more lucrative than that of  ninety mile passenger service and certainly a lot more useful to the state and especially to that area. It could well serve as a rail hub for Southwestern Colorado and Southeastern Utah…..Geez, I wish I had a bunch of money, I’d build me a railroad,….. New Mexico, Colorado and Utah…The old NMCU Express, serving the Four Corners Areas of America….Can I get any backers? ….Very doubtful, but where is the guts from the Burlington Northern? No rail service  with two major refineries and several major gas plants, served by pipeline and trucks only…..How did that happen you reckon?….Pete Hester

Comments (2)

Your last question has an easy answer. It’s answered by a simple five-letter word. It is U-N-I-O-N labor. The trucking firms bought out the bankrupt railroads years ago and opted to make them more bankrupt by taking their business and putting it on trucks running on President Ike’s fancy new interstate highway system. The unions and Ike destroyed the railroads bringing an end to an era in this country that will never be repeated. A competely new, futuristic, high speed technology, using compressed air or some similar technique may bring them back, but the old steel rail technology is a concept for the history books. High speed rail is mostly to move passengers anyway. Who wants to move oil at 100 mph? A pipeline can move oil to the market much more economically and environmentally safe than either rail or trucks.

It’s good that the Farmington area is about to share in the oil boom. I understand the boom is already under way in North Dakota where there is a housing shortage. Of course, there were never many houses for people in North Dakota. The best advice. though, is not to raise one’s hopes too high. When one has to drill two miles down, then another mile horizontally for obtainable oil, the price of the commodity must continue to go up and up. Although there is still lots of oil in the world, the real problem is still an economic one; that is, how we will sustain our petroleum-based lifestyle with higher and higher fuel prices, and still do so for seven billion people in the world and counting.

Pipelines are common carriers same as the railroad and truck lines. Companies purchase space on the pipeline and overcrowding prevents the companies moving all of their products in a timely fashion. Much of our trucking business came about because of the over crowed condition and also when the pipeline goes down, it completely stops products from moving, ie, as when the pipeline from California to Arizona went down and the El Paso to Arizona pipelines could not keep up with the demand. Pipelines are tremendous, and they also have limitations as they cannot supply all the nations needs presently. They are several lines into and out of the Farmington area, but the lack of rail service is a thorn in the side of many businesses there.

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