State urging U.S. Geological Survey to finish oil study (200-500 billion barrels of oil in the US?)

Grand Forks Herald/AP ^ | 25 July 06 | BLAKE NICHOLSON

[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.

[DejaJude]

Let's sing! 99 barrels of oil on the wall, 99 barrels of oil. Take one down....

[muawiyah]

The following table (available at just about every site saying "World Oil Reserves By Country") suggests that 200 billion barrels in North Dakota would put that one state up with the top three in the world:

Greatest Oil Reserves by Country, 2006

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

[spanalot]

lets stop buying from russia and the middle east - at least the canadians dont buy guns to shoot us.

[muawiyah]

We buy almost all our oil from Western hemispheric sources.

The problem is that oil, like money, is fungible, and has a world market.

[saganite]

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.

[spanalot]

obviously well need to ramp up production - as has been done almost exponentially over the last few years.

[saganite]

ping

[muawiyah]

No doubt the second any of this is proved, we will see a privately financed oil pipeline being built to wherever it's needed.

[mysterio]

They aren't going to use it. If we found a magic spigot connected to 800 trillion gallons of light sweet crude that would bring back extinct species and cure cancer, congress still wouldn't let us do anything with it. Let's do what we should have done in the 70s and replace oil. Enough is enough.

[saganite]

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.

[mysterio]

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.

[MNJohnnie]

And North Dakota could use the exploitable resource. Right now about the only thing keeping large parts of North Dakota economically productive are military bases the Pentagon would just as soon close. Let's get them back to being a net Federal tax paying state!

[MNJohnnie]

Of course that is utter absurd fantasy. Supposed you found the magic silver bullet to replace oil tomorrow. Guess what, you would still be burning gas in your car for another 20 years.

We did not because an Oil based economy over night, we will not go off oil over night. First you have to develop the infrastructure to produce and use the new replacement energy source. Then you have to use the existing infrastructure up so the capital investment to change to the new technology is economically feasible. Then large segments of the population will be too poor or too stubborn to access the new energy source until it has been commercially viable for a long period of time and can be cheaply mass produced.

If you want to get rid of Oil, which by far produces the most energy bang for the least buck, you should be advocating drilling and buring it as fast as possible.

Until Oil prices itself out of the market by a significant reduction in available supply, the world is going to be an oil based economy. No amount of Soviet Style dictates coming from Government bureaucrats is going to change that as long as oil is as plentiful and as cheap as it is.

People should just make peace with reality. Oil is going to be our primary energy source the rest of our lives. Perhaps our grandchildren will see then end of the Oil based economy, we will not live to see it.

[mysterio]

That's why I want to see oil face some real competition. Ethanol and biodeisel aren't great right now, but increased demand will spur technological innovation. And serious competition will cut the price of oil in half.

I just think we should look at replacing it before we hit another crisis.

[VeniVidiVici]

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!

[tobyhill]

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.

[Khepera]

and your point is?

[muawiyah]

That was an answer to a specific statement ~ follow the thread back.

[Smokin' Joe]

Sorry, but you misinterpreted the last sentence. That was in reference to pipeline capacity. The 100,000 bbl/day capacity has been maxed out, and without further infrastructure development, regardless of what production is possible, only as much as can go down the pipeline will leave.

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.