Posted on 07/25/2006 6:08:54 PM PDT by saganite
BISMARCK, N.D. - State officials want the U.S. Geological Survey to complete a study on the expansive Bakken shale formation where estimates of oil reserves range from as low as 10 billion barrels to as high as 500 billion.
The Bakken encompasses some 25,000 square miles in North Dakota, Montana, Saskatchewan and Manitoba. About two-thirds of the acreage is in western North Dakota.
The amount of oil that actually is recoverable has yet to be determined, but several studies have been done through the years on the total amount of oil held in the Bakken. "They've ranged from 10 billion (barrels) to 92 billion to 132 billion to 500 billion," Lynn Helms, director of the state Department of Mineral Resources, told the North Dakota Industrial Commission on Tuesday.
The latter estimate was made by Leigh Price, a Denver-based USGS geologist who died in 2000 before his study was published.
The Industrial Commission, which consists of Gov. John Hoeven, Attorney General Wayne Stenehjem and Agriculture Commissioner Roger Johnson, voted Tuesday to send a letter to the USGS requesting that the study be published for review by the scientific community.
Sen. Byron Dorgan, D-N.D., earlier this year made a similar request, saying that although oil development already is under way in the Bakken, Price's study has the potential to spur even more activity.
Hoeven said Tuesday that the more oil available in the state, the more resources the industry will bring.
"The official information out there now from the U.S. Geological Survey on a nationwide basis, for North Dakota there's about 400 to 500 million barrels of recoverable oil," Hoeven said. "This is very important in that Price is saying, 'No, the Bakken formation could have 400 billion barrels' - not million, billion - that's why I think it's important."
Brenda Pierce, a program coordinator for the USGS energy resources program, said the agency would consider the Industrial Commission's request but would not comment on it until it was actually received.
She said the USGS plans to study the oil and gas resources in western North Dakota's Williston Basin in late 2007 and early 2008.
"This new USGS assessment of the Williston Basin will build upon raw data from the work of Dr. Price, but also incorporate data from other research studies that have been conducted since his passing," she said.
Hoeven said Price's study should be published now.
"I think the whole idea of getting both the geological community looking at it and industry looking at it and analyzing it, that's all good," Hoeven said.
Pierce said that an agency peer review of Price's study has not been completed.
Helms said state officials believe a more accurate estimate of the oil in the Bakken is between 200 billion barrels and 300 billion barrels - an estimate by Canadian researchers this year with help from the North Dakota Geological Survey and Oil and Gas Division.
"That's a followup to Dr. Price's paper," Helms said.
He said some of Price's methods have been questioned, which is why state officials want the study reviewed by the scientific community.
"We really don't have the expertise on staff to look at (Price's) geochemistry methods," he said. "That's something that the geochemistry community should look at, and that's why we think his paper should be published."
Helms said estimates of how much oil could actually be recovered from the Bakken formation also vary widely, from 3 percent to 50 percent. But even at 3 percent, he said, the oil resource would be "absolutely huge" even at 200 billion barrels.
Helms said advances in technology have helped companies better retrieve oil from what is known as the "middle Bakken," a thin layer of dense rock nearly two miles below the surface.
About two-thirds of the 36 oil rigs operating in North Dakota are in the Bakken. Helms said about 20 operators have leased about 500,000 acres of land in the Bakken over the past two years, and that the number could keep rising.
However, he acknowledged in an interview that a lack of oil pipeline capacity in North Dakota could hamper future development, no matter how much oil is in the Bakken. He said state officials continue exploring possible solutions to the transmission problem.
"The total (daily) takeaway for North Dakota crude is 110,000 barrels, and it's maxed out," Helms said.
Let's sing! 99 barrels of oil on the wall, 99 barrels of oil. Take one down....
| Rank | Country | Proved reserves (billion barrels) |
|---|---|---|
| North Dakota |
300.0 |
|
| 1. | Saudi Arabia | 264.3 |
| 2. | Canada | 178.8 |
| 3. | Iran | 132.5 |
| 4. | Iraq | 115.0 |
| 5. | Kuwait | 101.5 |
| 6. | United Arab Emirates | 97.8 |
| 7. | Venezuela | 79.7 |
| 8. | Russia | 60.0 |
| 9. | Libya | 39.1 |
| 10. | Nigeria | 35.9 |
| 11. | United States | 21.4 |
| 12. | China | 18.3 |
| 13. | Qatar | 15.2 |
| 14. | Mexico | 12.9 |
| 15. | Algeria | 11.4 |
| 16. | Brazil | 11.2 |
| 17. | Kazakhstan | 9.0 |
| 18. | Norway | 7.7 |
| 19. | Azerbaijan | 7.0 |
| 20. | India | 5.8 |
| Rest of world | 68.1 | |
lets stop buying from russia and the middle east - at least the canadians dont buy guns to shoot us.
The problem is that oil, like money, is fungible, and has a world market.
The estimates for the amount that would be recoverable range from 3% to 50%. At 200 billion barrels that would be 6 to 100 billion barrels. Even at the low range that's a substantial increase to US reserves. Note the last sentence which states current production from the Bakken reserve is a little over 100,000 barrels a day. Until a complete survey is conducted there won't be the kind of investment needed to really get the oil flowing from there.
obviously well need to ramp up production - as has been done almost exponentially over the last few years.
ping
No doubt the second any of this is proved, we will see a privately financed oil pipeline being built to wherever it's needed.
Actually, you're stunningly wrong in this instance. This region has been drilled extensively for decades. The reason so much oil is now available from those formations is the result of improved technology. To say we couldn't drill there now would be the same as saying we couldn't drill anymore wells in West Texas.
We've been burned so many times now that I am very, very skeptical that any amount of oil here is going to make a dent in the price. I'd much rather see us pursue a domestic energy production plan involving something besides oil. If this turns out to be legit, then I will stand corrected.
What a joke! It's only enough oil to provide 90% of our oil for 432 years! Why, it's hardly enough to justify the killing of a worm or two to justify the cost!!!
We should instead plant a windmill every 4ft all across N. Dakota. The ensuing clean energy will be enough to supply every McDonalds in Fargo for two months!
There's an estimated 116 billion barrels off our coast and now this so I'm really getting sick and tired of the Rats claiming we only have 2% of the worlds supply to work with.
and your point is?
That was an answer to a specific statement ~ follow the thread back.
More pipelines are the obvious answer, but that will only happen if the total reserves justify the infrastructure investment for the long haul.
That is part of the call for finishing the study--to help justify the infrastructure development to investors by indicating that there is enough oil here to make a pipeline a paying venture for the long term.
Lately, because of the lack of capacity, there have been problems with oil here (Bakken Crude oils and others) being deeply 'discounted'--purchasing companies, which usually own the pipelines, are paying substantially less than spot for oil, ($25-30/bbl less) and transshipping Canadian tar sands oil on the same pipelines.
This costs the domestic oil companies, and, ultimately, the StateFedGov when the State/FedGov is a royalty owner.
Needless to say, this puts a damper on development as well. The last time inflation adjusted oil prices were anywhere close to what they are today, there were 4 times as many rigs drilling up here (1979-1981). At easily 50 good paying jobs to the rig (between righ crews and service companies), the difference in the state and local economies could be substantial.
Governor Heoven and the O&G Commission guys are doing their job, and trying to help bring those increased revenues to the state.
I have been working wells in this formation in Eastern Montana for five years now, and am back in North Dakota working another one. We have been unable to test this formation in vertical wells because of engineering concerns, even though I have reccommended testing it for years in dozens of wells. (I've been at this since '79).
Now we have the ability to drill horizontally in the relatively thin zones (6-12 feet thick) and open up (literally) miles of productive wellbore. So this is a technological development, and most of it is occurring in the midst of or adjacent to existing oilfields which were drilled to tap other reserves in a geologic column which has as many as five or six different viable pay horizons in the same 13,500 ft. vertical well.
Environmentalists might be able to mess with the pipeline, but they really can't do much about the drilling aspect, especially when one of the companies up here which did much of the early development (Amerada Hess) has one of the best track records (environmentally) in the industry.
Just think, all that oil, and ICBMs too....(8^D)
one step ahead of the mullahs...
Don't dismiss agriculture, it is the backbone of the (non-military) economy, along with oil and coal.
Jeez, I know it is windy up here, but at least leave enough room to drive between them to fix them, willya? (8^D) THat could be a really miserable walk in the winter...
Our FReeper colleague Smokin' Joe works in the oil patch up that way. I believe I can guess who has the more accurate information without any difficulty.
FReegards!
(hangs head)
LOL! No sweat!
Yeah, and given the present state of United States politics, the day before said newly constructed oil pipeline prepares to commence transporting oil, President Hillary Clinton will declare the entire mess a national monument closed to all mineral extraction. And so we go again...
Even from inside the industry, I have seen claims of reserves which became substantially smaller as drilling progressed--and I have seen 18 well programs which drilled the last well first.
Sometimes it is hype to draw investors to a likely looking prospect, sometimes it is an honest overestimate of oil in place or faulty structural data.
In short investors should do their due dilligence and remember there is always an element of risk.
That said, it is all the more reason to have the initial and later reserve estimates reviewed, to cut through the wishful thinking should such exist and come up with a reasonable figure.
If that reasonable figure supports the economics of further infrastructure development, as I firmly believe it will (from the results which I have seen), it will happen.
From Governor Hoeven's (R) viewpoint, that means economic development on his watch, the guys at the O&G Commission can figure in what they will need for future budgeting and personnel, and development can proceed.
There is already a tremendous amount of data availlable from vertical wells drilled in the region, and this has the possibility of being as big as the boom which brought in the Beaver Lodge Field and associated oil fields. ('Google' that one).
I don't fault anyone for being skeptical, but everyone should keep in mind that th types of alternate energy development which will make oil dependancy a thing of the past will not occur at the energy prices we were paying in 1999, nor will it occur over night.
While that development is getting a shot in the arm, we still need something to fuel the vehicles on the road today, and will for some time.
Cost? yep, it is more, Grandma (my wife) even parked her '78 Lincoln (The one they'd have to pry from her cold, dead hands) for a little Chevy that gets more than double the mileage. The Lincoln will come back out for winter, because it is good in snow and would be far safer in a collision.
In the meantime, the little Chevy has paid for itself in fuel savings.
I might do wellsite geology work for oil companies, but I buy my gas at the pump like everyone else.
All the more reason to keep Hitlery out of the Oval Office.
And those beautiful B-52's. Poetry in flight.
Not sure who put the 'U' In BUFF, but I am sure glad they are on our side--they sure look good to me.
They're talking about a bunch of shale. Very low energy density stuff. More oil will be flowing into North Dakota from Tar Sands to the north than from shale.
Wrong. The shale is the source rock, the reservoir is in the Middle Bakken, between the shales, and is either a dolomite (Richland County, Montana) or sandy siltstone (in parts of North Dakota). While the lithology varies, the reservoir is present.
Hey, can I get a link to that? :D
LOL! Just a little pre-emptive educational link....(8^D)
My reference to 100,000 barrels a day capacity was related to the pipeline's capacity in that I assumed only 100,000 barrels a day could be pumped if that was all that could be shipped. Maybe they're capping some of those wells?
That was also my last post last night and I was off to bed so maybe I wasn't clear. Is the daily production there actually more than that? If so how do they move the oil? Trucks? In fact, reading your post I drew the conclusion that field production might actually be less than 100,000 because you said some of the Canadian tar sands oil is shipped through that pipeline.
You're dead right about getting a survey completed in the area. It's necessary for planning and pipeline development. Sounds like the owners of the current and only pipeline have a stranglehold on the producing companies up there.
It's always good to read your posts on these oil related threads. Your inside knowledge helps counter some of the nonsense that goes on (including my own). Thanks.
Yep. There are other pipelines, relatively nearby and the oil is trucked to them--the price break is enough to make that economical for some oil compaines.
More here:Billings Gazette:North Dakota considers options for increasing oil exports
Thanks. That was a good article. I was surprised at the rig count in ND mentioned in the article even with the understanding that the kind of drilling you're doing requires specialized equipment. I looked up the US total rig count and was even more surprised to find the vast majority of rigs are drilling for gas. The most recent rig count for oil drilling rigs was 299. Over 10% of those are in ND. I guess now would be a great time to be a rig owner! Limited supply, increasing demand.
With a portion of the Gulf infrastructure still down from last year's hurricanes and another season between now and winter, there is a possibility that Natural Gas could do more than the usual seasonal price spike this winter, much like early last winter when it went to $15. My bet is they are gambling on that.
No matter what happens, there is not likely to be a glut, so there is a lot of upside potential. Those reserves deplete at a rate of about 7% annually, iirc, so that needs to be replaced as well.
The tough part about owning a drilling rig nowadays is getting hands, every crew on this rig has had at least one trainee for the past two or three years, and the experienced hands have been moving up the ladder fairly fast. Wages tend to be really good for a non-union job that requires little more than a high school diploma and a strong back to start.
I worked as a roughneck two summers in Louisiana during college in my younger days. I remember the work being hard and occasionally dangerous but always interesting. I even took a stab at throwing the chain but decided I would rather keep all my fingers so only did it a few times.
I won't tell you how old I am now but I did stay up after my shift to watch Neil Armstrong take that first giant leap for mankind. I have fond memories of those days and the folks I worked with.
So, does the 21.4 billion shown for the US include ANWR, the Gulf and off the collected coasts? IOW, all of the areas that the government has made off limits.
I don't think so, but can anyone quote a reliable source one way or the other?
I roughnecked a few tours here and there, usually when they were tripping and shorthanded, but I only threw chain once, (and I'm glad I did--besides, how often does a guy get to earn two paychecks at the same time?).
Most of the rigs up here don't use them any more, but use air spinners on the kelly instead. It sort of separates the 'old hands' from the youngsters. I watched Neil make the giant leap, too, but I figure you have a few years on me, I was barely in High School.
Biggest excitement I ever had was the driller daydreaming and hitting the crown with a string of pipe. The only thing that saved us was the guy working derrick yelling at the top of his lungs. The driller managed to hit the brake in time but not before he hit the crown. The whole rig shook and scared the hell out of me. I was new at the time and too stupid to realize the driller was trying to kill us, else I would have been yelling at him.
Gotta think the Crown-o-Matic is a real lifesaver.
I once saw a motorhand go down the beaver slide, down the catwalk, and most of the way off the location before he realized he was carrying the slips (back in 1980). He had two floorhands cussing his aching back, as it took both of them to drag the slips back up to the floor--they had scattered when the blocks started coming down.
Thankfully, the elevators held, (as did the rotary table) and they were able to get a Halliburton head on the string and circulate, because the well started kicking about the time the last of the drilling line finished snaking out of the crown.
The derrick hand managed to squeeze between the panels on the winterizing up on the boards and hang onto the outside while the drilling line went whipping past, then work his way back onto the boards. The driller stayed on the brake handle until the blocks were about 10 ft. off the floor and ducked behind the A-leg when they hit. No one hurt or killed, the blocks were restrung and repairs made within 24 hours, and they tripped out for logs.
There is no other sound like that line paying out of the draw works, uncontrolled and under load, and no one needs to tell you that 'rumble' is trouble.
I have seen a few other minor 'train wrecks', but have been fortunate in that in my whole career only a couple of guys were seriously hurt on rigs I was on, and only one killed. Not bad for nearly 30 years, but you wish even that had not happened that way.
The rigorous safety programs of the last decade or so have made a tremendous difference, and although people still get hurt (and even killed) it is with far less frequency than back during the boom days of '79-82.
Those figures only included proved reserves. This should only include reserves that have been through seismic surveys and test wells drilled with flow measurement.
Estimated reserves such as ANWR, most of NPRA and Bristol Bay, OCS, etc would not be included.
I've been out of the oil patch a long long time so I didn't completely follow the details of your story but I got a good laugh picturing some guy walking off the drilling floor with the slips in his hands. I can just see the other guys going WTF! I know some of those boys have strong backs but I can't imagine you wouldn't know you had the slips in your hands!
Holy Cow, I can't imagine that bulk transshipment of oil by truck is cost-efective. As it stands, my ship can carry 258,000 bbls of oil, and she's barely big enough to suit the interests of refiners.
We (I mean the transshipment by sea people) incur costs of around 1.5-2.0 cents per gallon to move oil or finished products from the refinery to the distribution hub... that includes payroll and all expenses from the moment the product leaves the last pipeline on the refinery grounds...any idea of the cost associated in transshipment from the well to the refinery? I know so little about landlocked oil production. Thanks!
Now I understand why my fiancee gets a sour look when I use jargon with one of the crewmen from my ship (on the phone when I'm at home). I have no idea what you guys were writing there, but it sure sounded interesting!
Just wait until I get started on my true love, flying!
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