Bakken: The Biggest Oil Discovery in U.S. History

Digg it del.icio.us AIM Quest for oil leads to Dakota prairie
By RICK MONTGOMERY
The Kansas City Star
Deep under the northern Badlands, trapped tightly in dense layers of shale, there is oil.

Perhaps hundreds of billions of barrels of it.

A long-anticipated federal report to be released today will examine just how much might be squeezed out of a vast blanket of rock called the Bakken Formation.

Geologists have known about “the Bakken” for more than half a century. So the question isn’t whether high-quality crude really exists in a region not commonly associated with drilling rigs: North Dakota, eastern Montana and the southern parts of two Canadian provinces.

The question is, how tough is it to get at this oil?

With world market prices briefly topping $112 a barrel Wednesday, many producers are willing to go the extra mile — or in this case, two miles down and then sideways — to reach a reservoir that was either unreachable or not worth reaching until recent years.

Even so, just a small fraction of the Bakken’s mother lode may be deemed “technically recoverable” in the U.S. Geological Survey report, details of which were closely guarded.

Ron Ness of the North Dakota Petroleum Council reckoned that only about 1 percent of all the Bakken oil is recoverable using horizontal drilling and other new technologies, “and you only do that if it’s economical to do it.”

“It’s like tapping into your driveway. That’s how hard the oil is embedded in the rock.”

If the rosier views of some experts are correct, however, as much as 10 percent, 25 percent or even 50 percent of the obstinate oil could be coaxed out of the formation using the latest and costliest know-how.

Such scenarios foresee the Bakken offering up more domestic crude supplies than Alaska’s North Slope and the hotly disputed Arctic National Wildlife Refuge combined. On the Web, the wild possibilities and skeptics who snort at them have made the Bakken a kind of legendary Bigfoot in the energy-dependency debate.

“I believe the resource is in place, and the trick is finding the sweet spot,” said Steven Grape, a petrochemist at the U.S. Energy Information Administration.

Scientific curiosity bubbled up last year — as did the economic hopes of rural North Dakota — when Houston-based EOG Resources reported that a single well it had drilled below the town of Parshall was expected to deliver 700,000 barrels in its lifetime. In 2007, the number of wells in the Bakken rose from 300 to more than 450. Drillers have encountered the formation throughout an area known as Williston Basin, through which the Missouri River flows.

“The people are just waking up and realizing, ‘Hey, we’ve got an oil boom on our hands,’ ” Grape said.

The Geological Survey in 1995 estimated the amount of recoverable oil in the Bakken at around 150 million barrels — less than the amount of oil Kansas produces in five years.

But estimates are apt to climb significantly with today’s report. In Montana, the Elm Coulee Field alone has been producing 15 million barrels annually since 2005.

Estimates of the total amount of crude sitting in the Bakken have varied wildly since the 1950s, when the formation got its name. (Henry O. Bakken owned the North Dakota land where Amerada Petroleum Co. drilled the Bakken No. 1 well.)

The most intriguing calculations came from a federal geochemist, Leigh Price, who died before his findings were published. A draft study at the time of his death in 2000 did not receive a complete scientific review, but Price’s estimates were staggering — from 271 billion to 503 billion barrels of potential resources in the ground.

That would be well more than all current recoverable crude oil resources in the U.S., which the Energy Information Administration estimates at 175 billion barrels.

In light of the nation’s foreign-dependency woes and the potential for thousands of new jobs, U.S. Sen. Byron Dorgan, a North Dakota Democrat, asked the Geological Survey to update its estimates using Price’s unpublished work.

“This is not going to be a red light or green light about oil development in the Bakken. Clearly, there already is a big green light there,” Dorgan told The Associated Press. “But I think the question is pretty clear: How much of that oil is recoverable using today’s technology?”

And just as important, at what cost?

“Hundred-dollars-a-barrel helps offset the risk,” said geologist Julie LeFever, who has spent decades researching the Bakken for the North Dakota Geological Survey. “But if the price drops through the floor, most of the drilling would be over. The bottom line always is economics.”

Horizontal drilling and the modern fracturing techniques used to collect the crude cost about $6 million per well — six times the expense of a vertical well. But Ness said a horizontal operation, if successful, can produce many times the oil.

He compared the method to excavating the creme filling of an Oreo cookie from the side rather than by drilling several holes from the top.

The U.S. Geological Service said it would release its findings this afternoon on the service’s Web site, www.usgs.gov.

“This is not going to solve a great mystery,” Ness predicted. “Let’s focus on the recoverable reserves.

“They can get 50 or 70 percent of the oil up in the North Slope. Here? We’re getting about 1 percent.”

Explorer, die in der Bakken Region tätig sind:

Whiting Petroleum "WLL"

Continental Resources "CLR"

Brigham Exploration "BEXP"

Marathon Oil "MRO"

EOG resources "EOG"

JMG Exploration "JMG"

Painted Pony Petroleum Ltd "PPY.A"

Nicht zu vergessen die größten Landbesitzer auf Bakken: Petrobank Energy PBG und Crescent Point CPG.UN beide auf kanadischer Seite.