America stands on the cusp of an energy boom, so long as the government doesn't derail the prosperity train barreling down the tracks out of North Dakota. The mammoth Bakken field, it is proving to be bigger -- much bigger -- than previously estimated. It's not yet official, but it will be next year. And it puts the lie to President Obama's claim of a huge disproportion between America's share of world oil consumption and American reserves.
Industry experts gathered in Minot, North Dakota this month for the Second Annual Bakken Investor Conference, and Petroleum News was there. The information now available will be incorporated in the US Geological Survey estimate of technically recoverable reserves to be released in 2013, and it will be enough to make OPEC weep. Petroleum News explains:
April 2008 was the last time the USGS reported on the immense play, estimating it held from 3-to 4.3 billion barrels of undiscovered, technically recoverable oil in an area generally known as the Bakken formation. The study estimated mean undiscovered volumes of 3.65 billion barrels of oil, plus 1.85 trillion cubic feet of associated-dissolved natural gas, and 148 million barrels of natural gas liquids. That estimate represented a 25-fold increase in the amount of oil that could be recovered compared to the agency's 1995 estimate of 151 million barrels of oil. [...]
The Bakken reserve estimate of 2008 was larger than all other USGS oil assessments of the lower 48 states and was the largest continuous oil accumulation ever assessed by the USGS.
But now that drillers have been punching more holes in the ground and recovering more oil, they have accumulated a lot of experience, and with that, information on the technical characteristics of the geology below them. Fracking is a technology that is developing rapidly, and as with all new technologies, as people use it, they discover improvements, refinements, unexpected opportunities. It is called the Experience Curve, a phenomenon discovered in World War II that has become something of a law of technology in modern economies. The USGS 2013 figure is now widely expected to be about 8 billion barrels, a doubling in size of the field that is already bigger than everything else in the 48 states put together.
Back then information was gleaned from just a few hundred producing wells, compared to thousands of wells that have since been drilled and put on line. Moreover, the technologies of horizontal drilling and shale fracturing, which made the Bakken oil boom possible, are far more advanced.
"I think there are a lot of people who think that (8 billion barrels) is reasonable," Terry D. Hildestad, president and chief executive officer of MDU Resources Group, told PN, noting that production from his company's last eight wells was up more than 40 percent from wells MDU drilled a year earlier.... "People get smarter and get better."
...once in-field drilling begins in earnest, and enhanced recovery techniques, such as CO2 injection and water flooding, are employed, the Bakken's ultimate oil reserves could reach well beyond the 2013 estimate of 8 billion barrels.
Huge as Bakken is proving to be, it still is dwarfed by Saudi reserves. But the key point is that the technology of fracking is developing so rapidly that other hydrocarbon resources in America will also be available to us in larger than currently understood quantities. The experience curve is our friend, driving down costs and driving up recoverability. We have a lot of oil and gas resources that are recoverable with the new technologies.
America already leads the world in this technology sphere, and we can create millions of well-paying jobs, in domestic production, and equipment and services, and in export of the goods and services of this industry everywhere aorund the world, driving energy prices downward and lessening the strategic power of the oil states, including our Arab friends, Russia, and the likes of Hugo Chavez and the mullahs of Iran, who all thrive on high energy prices and use the proceeds to advance hostile agendas.
The Greens will do whatever they can to stop it, of course. If Obama is re-elected, they may succeed. The Romney campaign needs to let America know about the boom that Obama and the Greens want to strangle in its crib.
Hat tip: Bryan Demko
Photo credit: Eagle 46
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