Bakken Reserve, the new possibilities

Factual Questions
1

So here’s what I wonder;

The Bakken reserve in N. Dakota and lower Canuckistan supposedly has a motherlode of the black gold within. Companies aren’t really motivated to drill because of the tiny margins and the dwindling future of oil. Still if the estimates are even half true, my question is two fold. Could the Gov’t do this (or contract the job being done) with the idea that the strategic petroleum reserves would then be filled by the oil we took from Bakken. Could we then release the SPR into the market to lower the overall prices?

Whether a trickle or flood, it seems to me that the number of bbls of oil they’re talking about is significant enough to warrant such a move.

Or.

Are we so set on the fact that oil is “dead” as far as a source of energy that drilling is not only frowned upon but will never happen under the current administration?

We’re going to need a large amount of oil for a long time to come, seems prudent to me to get what we can from our own land first.

2

The vast majority of recoverable reserves in the Bakken are uneconomic at these prices. It simply doesn’t make sense to drill.

3

I’ve always had the opposite position.

Let those other fools sell us THEIR oil while it still cheap and abundant.

Then when it gets expensive and scare and folks are fighting over getting it, THEN we go to stuff located at home…

Not that the theory is sound, but it sounds good to me.

4

Also, here is a pdf link estimating 3.65 billion barrels of recoverable reserves in the Bakken (not necessarily economic). While that is certainly a big number, if it takes 20 years to produce then you are talking about 500,000 barrels per day, which is far below what the U.S. imports.

5

Snopes recently did a treatment on the Bakken Formation.

6

So what about the area is preventative. Even if you extract from shale/sands even a small operation shouldn’t take 20 years to start producing, should it?

7

It won’t take 20 years to start producing; there is production in the area right now. There are several issues to consider. First, much of it is uneconomic at today’s prices (it costs more to drill and produce then you will make from selling the oil). Second, a well doesn’t deplete a reservoir instantaneously; it will produce over several years (I’m using 20 as an estimate). Third, these aren’t huge wells. It is more of a manufacturing process. You have to drill a huge number of wells in order to maximize the production in the area. That takes time to accomplish.

Think of this more as a statistical play. We know the hydrocarbons are there. We know how to produce them. You’re not going to drill dry holes. The wells are fairly expensive for what you get, so the commodity prices have to be high in order to make it worthwhile. You need a lot of wells to maximize production in the area.