Oil boom!

Just recently, I happened to drive through the southern end of the Bakken Field in North Dakota on my way to Montana. I can tell you that an oil boom in the making is absolutely awesome to behold! There is black gold in them thar hills!

The I-94 freeway was a solid line of trucks ferrying equipment to the oil fields. Low-level hotel and motel rooms are booked 4 years out and cost in the upper $-100s per night. Everywhere over North Dakota’s (very attractive, in my view) rolling western plains you see oil storage tanks and pumps blending (yes, blending…they are not ugly or obtrusive) in the countryside. The crush of people from all over and construction in small-but-fast-growing towns like Dickinson and Williston is energizing. Oh, if I was young again…

I met a semi-retired petroleum engineer in Alberta that was working on the Canadian tar sands development. I asked him what he had heard regarding the size of the Bakken oil field. He indicated that, pessimistically, it contained 1x the reserves of Saudi Arabia, while the optimistic projection was 3x the Saudi oil reserves. Plus, there are all the other oil fields out there waiting to be developed (e.g., Western Colorado) and the natural gas fields scattered throughout the country.

Interestingly, he also told me that he thought the Obama administration made the right call on the Keystone Pipeline in that the forced redirection of the pipeline would be much more responsible (environmentally speaking), given the shallow ground water tables in Nebraska.

I don’t believe that this can be stopped. Cheap energy is at hand and it will change our country and the world.

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Comments

  1. 11B40 says

    Greetings, M. Lemeiux:

    Interesting report, but not exactly what the Progressive (née Public) Broadcasting System was selling last evening on its “Newshour” program.  While it didn’t actually deny the obvious, it did its best to emphasize all the minor travails that accompany economic booms wherever people are lucky enough to experience them.  Lack of housing, communal housing, traffic, unfilled jobs, price increases, miscellaneous changes were all rife upon those lands.

    So, mon ami, I thought I would make a bit of an addition to your assessment.  Remember, s’il vous plait, that for every bright light at whichever end of whatever tunnel, there is/are always a dark, dark shadow or deux.  I worry about what will happen to our threatened/endangered/extincting wind turbines. Should I be preparing for a bleak technology deprived future, driving endless miles across landscapes full of nothing but God’s green Earth ???  How many hours will I have to spend on some bullet train or other public transport to reach vistas that will quell the aching in my heart for scenes like the out-takes from “The War of the Worlds” ???

    Similarly, being a Christien, I cannot help but worry for our Muslim bretheren and sisteren, especially the sisterens. Are the days of Monday, Tuesday, Wednesday, etc, burquas to devolve into January, February, March, etc. versions.  After we so craftily addicted them to oodles of filthy infidel fivers, will we now abandon them in their homelands that produce so little else, and tell them literally to go back to pounding sand ???  Is that a future American Future that you, a so widely and wildly traveled future American can accept ???

    Bonjour Trieste, and bon nuit, mon bon ami.

     

  2. Jose says

    11B40 said: “I worry about what will happen to our threatened/endangered/extincting wind turbines.”
     
    It’s already happening in Idaho.
     
    Former Public Utilities Commissioner Joe Miller called Idaho’s Power’s renewable energy proposals “extreme and radical” aimed at “crippling future development and punishing existing power producers.”

    Read more here: http://voices.idahostatesman.com/2012/08/09/rockybarker/miller_calls_idaho_power_purpa_plan_extreme_and_radical?utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+IdahoStatesmanLettersFromTheWest+%28IdahoStatesman.com+Letters+from+the+West%29#wgt=rss#storylink=cpy
     
    Miller, who represents Ridgeline Energy, a wind farm owner, said proposals to transfer renewable energy credits, curtail existing wind power and to reduce contract lengths from 20 to five years would stop future development and hurt the financial viability of current projects.
     
    [Kristine Sasser, an assistant attorney general] said the state is not required to ensure that renewable projects are financially viable.
     
    Idaho Power attorney Donovan Walker said the oversupply of wind power it was forced to buy since 2010 will cost its customers tens of millions of dollars over the next few years they would otherwise not have to pay.”

    Read more here: http://voices.idahostatesman.com/2012/08/09/rockybarker/miller_calls_idaho_power_purpa_plan_extreme_and_radical?utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+IdahoStatesmanLettersFromTheWest+%28IdahoStatesman.com+Letters+from+the+West%29#wgt=rss#storylink=cpy

    Read more here: http://voices.idahostatesman.com/2012/08/09/rockybarker/miller_calls_idaho_power_purpa_plan_extreme_and_radical?utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+IdahoStatesmanLettersFromTheWest+%28IdahoStatesman.com+Letters+from+the+West%29#wgt=rss#storylink=cpy

    Read more here: http://voices.idahostatesman.com/2012/08/09/rockybarker/miller_calls_idaho_power_purpa_plan_extreme_and_radical?utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+IdahoStatesmanLettersFromTheWest+%28IdahoStatesman.com+Letters+from+the+West%29#wgt=rss#storylink=cpy

  3. Jose says

    Pardon the weird links – was trying to embed but didn’t work….
     
    Unlinked version:
     
    11B40 said: “I worry about what will happen to our threatened/endangered/extincting wind turbines.”
     
    It’s already happening in Idaho.
     
      Former Public Utilities Commissioner Joe Miller called Idaho’s Power’s renewable energy proposals “extreme and radical” aimed at “crippling future development and punishing existing power producers.”
     
    Miller, who represents Ridgeline Energy, a wind farm owner, said proposals to transfer renewable energy credits, curtail existing wind power and to reduce contract lengths from 20 to five years would stop future development and hurt the financial viability of current projects. 
     
    [Kristine Sasser, an assistant attorney general] said the state is not required to ensure that renewable projects are financially viable. 
     
    Idaho Power attorney Donovan Walker said the oversupply of wind power it was forced to buy since 2010 will cost its customers tens of millions of dollars over the next few years they would otherwise not have to pay.”

  4. Gringo says

    I met a semi-retired petroleum engineer in Alberta that was working on the Canadian tar sands development. I asked him what he had heard regarding the size of the Bakken oil field. He indicated that, pessimistically, it contained 1x the reserves of Saudi Arabia, while the optimistic projection was 3x the Saudi oil reserves.


    Saudi Arabia: 267 billion BBL.
    Bakken: 4-8  billion BBL.
     Say no more.
    http://en.wikipedia.org/wiki/Oil_reserves_in_Saudi_Arabia  http://www.petroleumnews.com/pntruncate/709714248.shtml 

  5. Danny Lemieux says

    Gringo, thanks for the links. 

    There is a distinction between what is defined as “reserves”, total oil and recoverable oil. “Recoverable” oil is a shifting value, as new technologies come on line.

    Here is a technical article from the Oil & Gas Journal that looks at the potential recoverable oil estimates for the Bakken fields. With new technologies, more and more oil becomes recoverable.

    http://www.ogj.com/articles/print/vol-110/issue-4/exploration-development/bakken-s-maximum.html

    Here are some outtakes of the article (keeping your cited value for Saudi Arabia at 267 bbl in mind.

    “A conservative estimate of oil in place in the Bakken is 300 billion bbl, but it is locked in low permeability rock.”, citing a 2010 North Dakota Dept. of Mineral Resources study.

    Here is a link to an article that cites higher estimates developed by the U.S. Geological Survey. Of course, these are estimates and estimates are always fungible.

    Continental Resources Inc. places the quantity of recoverable oil in the US Bakken at as much as 24.3 billion bbl.

    However, new technology keeps upping the amount of recoverable oil.

     

  6. Gringo says

    Danny, I work in the biz- or perhaps better said, in IT in an ol’-related biz– though I have been on rigs in a previous life- also reservoir estimates. Without E&P, I would have to look for a new job. Apples to apples: 267: 8. Recoverable, not pie in the sky.
     
    One thing about oil reserves:  “10 years of reserves at current production” doesn’t mean that production will stop in ten years. The US has had “10 years of reserves at current production,” more or less, for decades. New exploration and infill drilling will add to reserves.
     
    Nonetheless, in dealing with conventional reserves onshore and in Alaska, pretty much what is there has already been found. Over a million wells have been drilled in Texas since 1919.  There are no new Permian Basins to be found onshore. Offshore, a different story.
    Shale oil and gas, heretofore not economical,  will constitute the new drilling frontier onshore in the US. Some shale oil recovery will take on the characteristics of conventional mining, where oil will be squeezed out of rock, leaving tailings in the wake.
     
    BTW, oil and wind coexist rather well in the Permian Basin.
     

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