America’s energy jackpot: New oil and gas discovery has the US energy world buzzing. Here’s where

In an aerial view, the Exxon Mobil Baytown Refinery is seen on January 13, 2026 in Baytown, Texas. Brandon Bell/Getty Images/AFP (Photo used for representational purpose)

The US Geological Survey found Texas’ Permian Basin holds 28.3 trillion cubic feet of natural gas and 1.6 billion barrels of oil in deep shale formations, offering a boost to US energy security but posing technical and economic challenges for extraction.

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The United States may be sitting on a fresh boost to its energy security after a new assessment by the US Geological Survey identified sizeable untapped oil and gas resources in Texas’ Permian Basin.

In a report released last week, the USGS said the Woodford and Barnett shale formations contain an estimated 28.3 trillion cubic feet of technically recoverable natural gas and 1.6 billion barrels of oil. At current consumption levels, these resources could supply the US with natural gas for about ten months and oil for roughly ten weeks.

What the USGS found

The Woodford and Barnett shales are part of the broader Permian Basin, which stretches across West Texas and southeastern New Mexico. Despite being located in one of America’s most prolific energy regions, these formations have produced only about 26 million barrels of oil since the late 1990s, an amount roughly equal to a single day of US oil consumption.

According to the USGS, this limited production is mainly because the deposits lie much deeper underground than shale formations typically targeted by drillers, making extraction more complex and costly.

Why these reserves were overlooked

The USGS began systematically assessing US petroleum resources about five decades ago, following the Arab oil embargo that exposed the country’s vulnerability to supply shocks. Since then, advances in drilling methods, especially hydraulic fracturing, have transformed the United States into one of the world’s leading oil and gas producers.

However, deeper shale layers like Woodford and Barnett were long considered too challenging to exploit. New data now suggest they hold far more potential than previously understood, even if accessing that potential will not be easy.

Technical and economic challenges ahead

Experts caution that turning these estimates into actual production will require overcoming significant hurdles. Toti Larson, principal investigator at the University of Texas Bureau of Economic Geology, said, “The potential in the area is massive, but producing these reserves presents new challenges.”

Larson explained that greater depth, higher temperatures, and increased gas content raise drilling costs, while higher clay content in parts of the Barnett shale increases operational risks. Market conditions will also matter. “Neither of them are small,” he said, noting that oil prices will influence whether companies decide to invest in developing the reserves.

Why the discovery matters

If developed successfully, the new resources could significantly increase output from the Permian Basin, which already accounts for a large share of US oil and gas production. The findings also underscore why continued exploration remains critical, even in mature energy regions.

USGS Director Ned Mamula said the assessment points to opportunities still hidden underground. “The US economy and our way of life depend on energy, and USGS oil and gas assessments point to resources that industry hasn’t discovered yet,” he said.

For now, the discovery strengthens the case that America’s energy story is far from finished, even as the economics and technical realities will determine how much of this newly identified potential actually reaches the market.