Did anyone else hear of a large pocket of oil found in MT-Dakota area? What does this mean to the consumer, if anything?
This is the Brakken formation.
The USGS are estimating 3.6 billion bbls of technically recoverable oil, based on geological studies and modeling, however very few well have actually been drilled logged and tested. Wells in near by formations and states have produced oil, which is encouraging but not conclusive.
http://www.usgs.gov/newsroom/article.asp?ID=1911
As to what 3.6 billion bbls of technically recoverable oil means to the economy is very much dependent on the oil properties and the flow characteristics of the oil through the formation, these are questions that would be answered by the aforementioned testing and logging. If the formations are prolific, then one could expect a good deal of investment and plenty of wells being drilled. Texas with 5 billion bbls of proved reserves produces 1 million bbls a day. Now proved and technically recoverable are very different standards for reserve numbers, and trying to draw a link between texas formations an Dakota formations is probably not wise, but you woudl expect significantly lower production than Texas. Even then 100K bbls a day would be small but not totaly insignificant on the world scale, particularly as it is in a relatively politically stable area.
Anyway, that is pure speculation, it really depends on the rocks and more data. I guess the biggest impact will be an upswing in local drilling activity and local jobs. Although the land rig market is pretty tight right now, so it may be some time before capacity is available to embark on a large scale development project.
If everyhting comes through, and that’sa big if, as **NBC ** said, it won’t hurt the consumer, but the fact that it’s in North Dakota and not Northern Mustachistan probably won’t make much differece, as oil is traded on a world market. Production might start faster, however, as there is probably less red tape than in Mustachistan.
That will depend upon the amount of environmental destruction that could take place. What will this do to the acquifer? Potential crop losses? Air quality? Energy development is never cheap.
Just a nitpick - it’s “Bakken”
It’s been big news up in Canada as well - there’s been some success in Saskatchewan as well. Suddenly everyone and their dog was announcing big Bakken discoveries, and the price of land went through the roof. How much of it is real remains to be seen. My understanding is that the wells are generally not stellar producers, but they produce forever. (okay, not technically forever) However, this means lots and lots of wells - which gets expensive.
Probably not a lot. The target zones are about 10,000 feet down and developed with horizontal drainage sections. The water requirements for drilling will be low and zero for production. The surface sections would be drilled with water based drilling fluids and cased off so should be no issues there for aquifer contamination. If there is produced water, then disposal of that could be an issue, but regulations exist and deep injection for disposal is not unheard of. Hopefully the respective states have some regulations regarding produced water disposal and some method of enforcement.
Crop losses - well depends on the drilling location size, and if this is developed as individual well locations or ,as is becoming more common, multiple wells are drilled directionally off of a single location. The later requires a more permanent pad but on the whole lowers land usage.
Air quality - during production, I a not sure of flaring of produced gas is allowed anymore in the US. For drilling you are probably talking 2000HP rigs to do these sorts of wells, so for each rig you can count on 3,500hp worth of diesel engines going full tilt 24/7/365. These engines have to meet the same emission standards as road going trucks. So for every rig think of it as an additional 6 or 7 big arse tractor units on the road.
I am not saying the environmental impact is zero, but certainly a lot less than oil sands mining.
Can anyone tell me what percentage of Bakken is under the US and what percentage is under Canada?
Have look here (flash presentation of a power point slide) and scroll down to slide 9 and slide 15 to see the extend of the Bakken
Dammit! Someone spilled the beans. There go my plans for slant-drilling from north of the border. :mad:
Jinx, what’s important to understand here is that what they’re talking about is as yet undiscovered oil. They’re giving these numbers not from something directly measured but instead based on a geologic model which takes into account total petroleum system elements such as “(1) source-rock distribution, thickness, organic richness, maturation, petroleum generation, and migration; (2) reservoir-rock type (conventional or continuous), distribution, and quality; and (3) character of traps and time of formation with respect to petroleum generation and migration.”
Basically, you’ve got a widespread layer of sandstone between two shales. The shales are the hydrocarbon (oil, gas and a mix of the two) source and the sandstone is where it’s held (think tiny pathways around the sand grains). This layer is not flat but has been altered into highs and lows of varying complexity. Some may be simple like a fold, other may be more convoluted, pushed together until they’re ridden on top of each other and heavily faulted. Those accumulations may be harder to find.
What they’re saying is that looking at the general type of rock present, the structures in place, the likelihood the oil’s undergone the requisite heat to mature and migrate, the history of recovery in the area and given today’s technology, the possibility exists that 3.65 billion barrels of oil equivalent can eventually be extracted.
There’s no pocket. What’s been proved so far is small. There will be dry holes and a lot of trial and error will be needed before they figure out how everything’s put together. But there’s a good chance if the guesstimates that went into building the model prove reasonable that that’s what’ll eventually be producible.
Inadvertently left off the source for my USGS quote above, http://pubs.usgs.gov/fs/2008/3021/pdf/FS08-3021_508.pdf
The Bakken play also isn’t the “Largest Oil Find in US”. From NBC’s link, the “estimate is larger than all other current USGS oil assessments of the lower 48 states…” It goes on to say “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.”
That would suggest to me it’s what’s commonly called a tight sand. The Austin chalk, that “next largest… accumulation…” behaves very differently, coming in great guns but petering off fairly quickly as it’s a fractured limestone. We’ve watched it down here for quite awhile. A multiple of its activity and production would be pretty darn acceptable by Lower 48 standards.
But many more lawyers ready to pounce for the reasons **Duckster **mentions as well as others.
You must be from Kuwait.
Side note: There is plenty of oil on the planet Earth but only a small percentage of it is recoverable based on the economics we have been living on. The shale in the Rockies and the sands in Alberta have huge amounts of oil but the cost of recovery is dependent on the market price. The current problem is that the easily available oil is being tapped out at a rate that exceeds demand and discovery at the current market price. Dubai is trying to restructure their economy because they realize their oil revenues will end in a few years. The same will happen with Saudi Arabia.
North Dakota may have a shitload of oil but so does Alberta and the Rockies. The question is at what price we can recover it.
My understanding is that the oil has been known about since the 50s, but the technology didn’t exist to extract it at all. It was re-surveyed in the late 90s when the technology finally existed, but would cost $20-$40 per barrel to get it out of the ground - at that time oil was going for about $10-$15. It seems to me that it is commercially viable now that oil is over $100 per barrel. I think the issue is capital and startup is very expensive. Investors need to be convinced that the extraction will be profitable for many years in order to see a positive ROI.