New oil reserves in North Dakota continue boom as state's energy role grows
As oil tops $110 a barrel for the benchmark west Texas crude and gasoline hovers near $4 a gallon, North Dakota’s output from the Bakken oil field is growing increasingly important in both the state’s economy and the national energy picture.
And North Dakota’s energy importance is only going to get larger.
A recent report from the North Dakota Industrial Commission highlights additional shale oil formations in the Williston Basin geologic formation that increase the total potential reserves by as much as 50 percent, to a total of 6 billion barrels of oil, as well as natural gas.
Current output from the Bakken and Three Forks formations has made North Dakota the nation’s fourth-largest producer of oil.
Source: North Dakota Pipeline Authority
Crude oil production forecast for the United States portion of the Williston Basin. A sustained rig count of 150 was used for the North Dakota portion.
The state also has been setting new production records almost every month, the report states. Studies conducted by the North Dakota Department of Mineral Resources in 2008 and 2010 indicate 4 billion to 6.3 billion barrels of recoverable reserves in North Dakota, it said.
Newly discovered reserves in formations dubbed Lodgepole, Tyler, and Spearfish -- along with improvements in extraction technology -- could double the Peace Garden State’s oil output by the end of the decade, from the 350,000 barrels a day produced at the end of 2010.
“Experts predict at least an additional ten to twenty years of intense drilling and development, followed by several more decades of continued petroleum production,” the report noted.
It also focuses on the region’s transportation challenges posed by the growing oil output. Currently, pipeline and rail capacity can move about 452,500 barrels of oil a day.
Source: NDIC
The report notes that industry has invested in transportation infrastructure to keep pace with growing output:
“With over a billion dollars of completed or planned oil transportation expansions, North Dakota is positioned for many more years of successful oil and natural gas development. The combination of pipeline and rail transportation that has evolved in North Dakota over the past two years has shown a great deal of creativity and ingenuity on the part of industry.”
It added: “Crude oil gathering pipelines are being constructed around the Williston Basin to help lower the overall transportation costs and reduce some of the trucking issues associated with heavy road traffic and North Dakota’s harsh winters.”
(Thanks to Ron Wirtz at the Federal Reserve Bank of Minneapolis who highlighted the NDIC report in a FedGazette note.)
More like this
- Exploiting North Dakota's 'massive oil field' simply a matter of time, technology and capital
- North Dakota oil fields benefiting from Mideast unrest
- High gas prices and foreign oil heating up 2012 campaign debate
- What Michele Bachmann would do about high gas prices
- Pipelines like Keystone remain the best way to transport oil and gas
Recent Stories
Most Commented
-
30 comments
-
26 comments
-
25 comments
-
21 comments
-
15 comments
Comments (6)
That's great, good for the working folks in ND. But as any Texan will tell you, oil is a boom-and-bust business. North Dakotans are known as a practical people; I hope they're putting a little something aside for the inevitability of hundreds, or even thousands of (hopefully temporarily) unemployed oil workers...
Rather than placing the oil on the world market, the North Dakota companies should just refine it themselves and sell it locally. In cooperation with the state government, here's what gas is selling for in places where that's done:
Riyadh, Saudi Arabia - $0.91/gallon
Kuwait City, Kuwait - $0.78
Cairo, Egypt - $0.65
Lagos, Nigeria - $0.38
Caracas, Venezuela - $0.12
North Dakota would become the new center of the American universe.
Dennis T (#2) -- I think that's the first post of yours that I've ever fully agreed with. Great idea.
-------------------
With this much oil available in North Dakota, I'd think the U.S. could let Canada cancel the remainder of the tar sands extraction contract allowing giant oil companies to use methods that are destroying much of Alberta's forest land, rendering the river down which their poisons run unfit for human use, and thereby denying the native tribes living along the river the ability to catch fish for food.
The Bush administration wrote NAFTA in such a way that Canada cannot tell the U.S. to end its destruction without breaking the treaty.
To Tony.
North Dakota is no stranger to the boom/bust cycle. The Williston Basin has gone through at least three of them that I know of... I grew up in the Lignite field area of the williston Basin in the fifties and sixties. I remember when my folks took me down to see the first oil well down by Tioga. I also picked up something of a southern accent in grade school from the new kids in school who came from Texas, etc. Williston basin crude is sent by rail south to refineries. Has been that way for the past fifty plus years.
The Williston/Bakken area will again "bust" if crude oil prices get below $40 to $50 per barrel for a sustained period of time. In the 1990's crude was barely above $10 per barrel. Basically with current fed and state taxes, if you believe that gasoline will have a sustained price under $2 per gallon then Williston/Bakken will go bust, if not they are "for real".
Pipeline capacity is increasing but it can cost up to $10 per barrel to ship the crude to a refinery or pipeline terminal. BTW: ND crude is "sweet" meaning it is the preferred low sulfur crude.
The blog "Million Dollar Way" http://milliondollarway.blogspot.com/?expref=next-blog covers Bakken. It also has the link in the top left hand corner of my http://FourFiftyGas.com linked at my name.
My family has been in the land and resource game for many years. They come from Harvey N. Dakota. These estimates for North Dakota Oil Reserves are low and wrong!
There are three fields we need to talk about; the first are the various proven oil reserves laying across the state and now being taped. Next comes the proven, 150 foot Bakin structure which covers most of the state. Last is the deep Bakin Oil Reserves which also covers the entire state. All three are accessible, cost effective, and yes enormous.
At a minimum there is 200 years worth of easily recoverable oil for the entire US in North Dakota alone. Again, in North Dakota alone, there are OIL Reserves which will fill the entire need of the US for the next 200 years! This DOES NOT include Natural Gas. Yes, you read correctly!