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The Barrel
The Platts ^ | 15 April 2011 | Starr Spencer

Posted on 04/18/2011 5:45:05 AM PDT by ShadowAce

The US' Bakken Shale oil field, which spans Montana and North Dakota, has become so prolific that at least one big independent operator there estimates industry's output potential there at a whopping 1.2 million b/d by year-end 2016.

That's a heck of a lot of oil for a play that was barely breathing six or seven years ago. And that figure is even higher than the 700,000 b/d or so North Dakota officials were citing as a  peak awhile back. 

Continental Resources CEO Harold Hamm, presenting his estimate of a Bakken peak of 1.2 million b/d at Platts' Rockies Gas & Oil Conference in Denver this week, said volume girth in the play is expanding by around 5,000-10,000 b/d per month.

Other Bakken statistics, courtesy of Hamm: roughly 3,600 horizontal wells have been completed in the field to date "and we've just scratched the surface," he said. Industry is now adding about 2,100 wells a year. About 170 rigs are active in the play.
.
Production on the North Dakota side of the field is around 360,000 b/d, while Bentek Energy Senior Energy Analyst Jodi Quinnell said in a telephone interview that adding in Montana output brings the total output figure for the play to around 410,000 b/d. Bentek is owned by Platts.

Moreover, Hamm said a recent Continental study of the field's potential calculated recoverable oil potential of 24 billion barrels with today's technology. That number is substantially more than earlier US government estimates of as much as 4.38 billion barrels a couple of years ago, and that was up from a trifling 151 million barrels in 1995.  
    
There seems to be no question that the Bakken can deliver, production-wise. But pipeline-wise, crude takeaway presents a problem. With so much oil oozing out of the ground, the Bakken needs more of it. Building new lines and finding new markets for it are big issues on the minds of both operators and pipelines these days.

Some of Bakken's production goes to Clearbrook, Minnesota, some directly to St James, Louisiana. But a large chunk goes to Cushing, Oklahoma where there is simply too much oil in storage right now. Steve Wuori, president of liquids pipelines for Enbridge, said there is now 55 million barrels of crude in storage at Cushing, which is likely a record amount.  

Enbridge has a pipeline that takes Bakken's light sweet crude to Cushing, Oklahoma, as do other transporters. The crude arrives in Cushing via Illinois. But Wuori said Enbridge sees finding a non-Cushing and non-Midwest destination for the field's crude as a challenge for his company. He said 430,000 b/d worth of upgrades in some Midwest refineries to take more Canadian heavy crude will displace that capacity for light sweet in that area. 

One solution Enbridge is mulling is to reverse a crude pipeline from Montreal to Sarnia, Ontario, which would enable Bakken crude to go to the East Coast US. Sarnia is not necessarily the only destination Enbridge has in mind, though. The company could reverse a pipeline at Portland, Maine that takes crude imports west, and from there unload crude and run it to Philadelphia or even St. John, New Brunswick refineries, he said.
 
Wuori would not say when or even whether Enbridge would make a decision on that option, adding it would depend on commercial support.

"When you hear the kind of talk we've heard about the bullishness of the play, it certainly looks like there's an urgency to it," he said.


TOPICS: Government; News/Current Events
KEYWORDS: bakken; drill; energy; gas; nd; oil; prices

1 posted on 04/18/2011 5:45:08 AM PDT by ShadowAce
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To: ShadowAce
a large chunk goes to Cushing, Oklahoma where there is simply too much oil in storage right now.

And the cheapest gas in my area is $4.059?

Am I the only one who sees something amiss?

2 posted on 04/18/2011 5:50:48 AM PDT by null and void (We are now in day 816 of our national holiday from reality. - That 3 AM phone call? Voicemail...)
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To: ShadowAce

3 posted on 04/18/2011 5:51:15 AM PDT by thackney (life is fragile, handle with prayer (biblein90days.org))
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To: null and void

Nope. I read things like this and it just pisses me off


4 posted on 04/18/2011 5:51:23 AM PDT by ShadowAce (Linux -- The Ultimate Windows Service Pack)
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To: skoobedoo

ping


5 posted on 04/18/2011 5:51:53 AM PDT by ShadowAce (Linux -- The Ultimate Windows Service Pack)
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To: ShadowAce
You better stop this stuff, the drill now crowd, say we are not and have not been drilling. LOL
6 posted on 04/18/2011 5:54:50 AM PDT by org.whodat
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To: null and void
You don't live near Oklahoma. Most of the country is not paying the price you are.


7 posted on 04/18/2011 5:56:55 AM PDT by thackney (life is fragile, handle with prayer (biblein90days.org))
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To: null and void

Some body has to pay the bonuses on wall street.


8 posted on 04/18/2011 5:57:37 AM PDT by org.whodat
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To: org.whodat
Some body has to pay the bonuses on wall street.

I think most of the price differences are due to state/local taxes.

9 posted on 04/18/2011 6:04:37 AM PDT by ShadowAce (Linux -- The Ultimate Windows Service Pack)
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To: thackney

Most of the country doesn’t have the boutique gas we do (or the taxes)...


10 posted on 04/18/2011 6:05:14 AM PDT by null and void (We are now in day 816 of our national holiday from reality. - That 3 AM phone call? Voicemail...)
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To: ShadowAce
Nope. I read things like this and it just pisses me off

Maybe it's refinery capacity. How many refineries have built in this country in the last ten years?

11 posted on 04/18/2011 6:15:13 AM PDT by dearolddad
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To: null and void
Which explains your prices.

Combined with the fact that oil is a global commodity. There is about a $10 discount to the oil price at Cushing compared to comparable oil on the world market. But in a place like California, you are greatly dependent on imports and their pricing.

12 posted on 04/18/2011 6:17:22 AM PDT by thackney (life is fragile, handle with prayer (biblein90days.org))
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To: thackney
God (AKA the State) forbid we should extract more crude from Signal Hill, Bakersfield or, horrors! off-shore...
13 posted on 04/18/2011 6:24:49 AM PDT by null and void (We are now in day 816 of our national holiday from reality. - That 3 AM phone call? Voicemail...)
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To: null and void

To my way of thinking, the stimulus money could have been better spent in building more refineries nearer the newer and more productive fields.

It’s telling that government will let private developers to take the hit for hard infrastructure developments all the while choking the life out them.


14 posted on 04/18/2011 6:25:03 AM PDT by burroak
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To: burroak
It’s telling that government will let private developers to take the hit for hard infrastructure developments all the while choking the life out them.

It's almost as if they were trying to cause the downfall of America.

But that would be silly, wouldn't it?

15 posted on 04/18/2011 6:27:29 AM PDT by null and void (We are now in day 816 of our national holiday from reality. - That 3 AM phone call? Voicemail...)
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To: dearolddad
How many refineries have built in this country in the last ten years?

Not enough, if any at all...

16 posted on 04/18/2011 6:39:44 AM PDT by ShadowAce (Linux -- The Ultimate Windows Service Pack)
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To: thackney

According to the Heat Map, it looks like the Dem states pay more?


17 posted on 04/18/2011 7:56:20 AM PDT by Bringbackthedraft (The storm clouds of war are on the horizon, 1939 is again approaching us.)
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To: Bringbackthedraft
That was why I posited the difference in state/local taxes as being the main reason for difference in prices.

Look at IL/MO. As a long-time resident of MO, IL has always had higher taxes/higher gas prices.

18 posted on 04/18/2011 7:58:07 AM PDT by ShadowAce (Linux -- The Ultimate Windows Service Pack)
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To: Bringbackthedraft

States with higher taxes do tend to pay more in retail price.


19 posted on 04/18/2011 8:20:22 AM PDT by thackney (life is fragile, handle with prayer (biblein90days.org))
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To: ShadowAce

We could have everyone from New York drive to North Dakota and fill up. Think of the money Minnesota would make selling chips and pop.


20 posted on 04/18/2011 8:45:54 AM PDT by blueunicorn6 ("A crack shot and a good dancer")
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21 posted on 04/18/2011 8:48:34 AM PDT by TheOldLady
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