…and indeed it is good news for those of us who think OPEC should be knocked down a peg or two and that true energy independence isn’t just through conservation or so-called alternative energy sources that are unreliable or expensive.
A U.S. Geological Survey report released last week noted the following:
North Dakota and Montana have an estimated 3.0 to 4.3 billion barrels of undiscovered, technically recoverable oil in an area known as the Bakken Formation.
A U.S. Geological Survey assessment, released April 10, shows a 25-fold increase in the amount of oil that can be recovered compared to the agency’s 1995 estimate of 151 million barrels of oil.
Technically recoverable oil resources are those producible using currently available technology and industry practices. USGS is the only provider of publicly available estimates of undiscovered technically recoverable oil and gas resources.
New geologic models applied to the Bakken Formation, advances in drilling and production technologies, and recent oil discoveries have resulted in these substantially larger technically recoverable oil volumes. About 105 million barrels of oil were produced from the Bakken Formation by the end of 2007.
The USGS Bakken study was undertaken as part of a nationwide project assessing domestic petroleum basins using standardized methodology and protocol as required by the Energy Policy and Conservation Act of 2000.
The Bakken Formation estimate is larger than all other current USGS oil assessments of the lower 48 states and is the largest “continuous” oil accumulation ever assessed by the USGS. A “continuous” oil accumulation means that the oil resource is dispersed throughout a geologic formation rather than existing as discrete, localized occurrences. The next largest “continuous” oil accumulation in the U.S. is in the Austin Chalk of Texas and Louisiana, with an undiscovered estimate of 1.0 billions of barrels of technically recoverable oil.
“It is clear that the Bakken formation contains a significant amount of oil – the question is how much of that oil is recoverable using today’s technology?” said Senator Byron Dorgan, of North Dakota. “To get an answer to this important question, I requested that the U.S. Geological Survey complete this study, which will provide an up-to-date estimate on the amount of technically recoverable oil resources in the Bakken Shale formation.”
The USGS estimate of 3.0 to 4.3 billion barrels of technically recoverable oil has a mean value of 3.65 billion barrels. Scientists conducted detailed studies in stratigraphy and structural geology and the modeling of petroleum geochemistry. They also combined their findings with historical exploration and production analyses to determine the undiscovered, technically recoverable oil estimates.
While this pales in comparison to the 11 billion barrels in the Arctic National Wildlife Refuge region or the 1.5 to 2 trillion barrels possible from oil shale, it’s still a significant find and would be much easier to drill for and transport since exploration is already underway and environmentalist groups aren’t as strongly opposed, at least for now. Of course with daily oil usage in our country clocking in at about 20 million barrels per day we’re not talking about complete independence coming from the Bakken fields but every little bit that we don’t have to import from a country who doesn’t like us helps.
Now if we could get the government to do something about all those gasoline taxes we’d be in even better shape when we filled up our tanks.
Michael,
No offense, but the the 3-4 billion barrels of oil in Bakken is actually worth FAR more than the oil in ANWAR, because the cost of pulling it out of the ground and shipping it to refineries in the Continental US is SOOO much lower. An largely unknown fact about Alaskan reserves is that they are typically shipped westward to Asia, because the cost of moving that oil to where the refineries are (ie, no longer California and Oregon) is so much higher.
What is really important here is that it is actually the very high cost of crude today that makes the Bakken formation attractive. The highest sunk costs in oil drilling are always front-loaded: Houston and Dallas collapsed as “new money” centers in the early 80s because, even though Texas still had lots of crude, the cost of drilling was higher than the initial return as oil prices returned to normal after the Carter-era embargo and shortages.
Because demand will naturally stay high (those 1.5 billion Chinese and the 1 billion Indians suck up a lot of oil), any investment in the initial drilling at Bakken will be recovered quickly. Therefore, the incentive is there to exploit it.
Plus, technology has gotten so much better in the last 15 years.
No word yet on whether Lorimar will brink back JR Ewing, but put him in Laramie or Missoula instead of Southfork, though.
If you read the 11 billion barrels article you linked to, you would see that that number is a mean value of estimates by EIA for the entire ANWR region. The amount could be as little as 5.7 billion. The compromise tossed around by congress only covers the coastal plain of ANWR which holds a mean of 7.7 billion barrels with a low estimate of 4.3 billion.
EIA estimates 7 to 12 years from approval to first production.
If we spent the next 7 to 12 years focusing a concerted effort on energy efficiencies, we could reduce the amount of oil used. If we removed the .54/gallon tariff on Brazilian ethanol, we could import the alternative for much less than our corn based product and end the ridiculous inflation caused by corn prices and the .51/gallon subsidy in corporate welfare that we are paying for ethanol production. We also need to increase the use of natural gas which is much more plentiful domestically and has not seen the price increases that oil has.
Some day we will learn how much of the current price of oil was caused by investment speculation. There are a lot of investment vehicles that are being used to invest in the oil market such as ETFs and hedge funds. The stock market is down this year, so the big money is going to the markets that are up like oil and gold. At some point there will be a rotation out of the oil and gold sector, as well as other commodities, and back into equity markets. Only then will we see a true supply and demand market for oil.