The North American Bakken oil field has received a fair degree of news coverage recently amid claims of up to 500 billion barrels of crude oil under the ground. If this were true this would make it the single largest oil deposit in the world. Where does the Bakken field stand in relation to these claims?
The oil field was discovered over 50 years ago and is located across the border of North Dakota and Montana. The area has been extensively studied. The area is rich in oil shale, a rock formation typically associated with oil deposits. The oil in this formation is thinly spread through the rocks, which is called a continuous oil accumulation. This is opposed to discreet oil deposits where the oil is pooled into one area.
Bakken oil continuous the spread out nature of the oil in this formation makes recovering it an expensive task. Those areas where there is some pooling of oil have already been drilled and developed and to date 105 million barrels of oil have come from the site. A recent report from the United States Geological Survey (USGS) has predicted that a maximum of 4.3 billion barrels of oil can be extracted from the area using conventional technology. Possible technology developments such as horizontal drilling may increase this somewhat. The figure for the amount of recoverable oil in the Bakken formation contrasts sharply with the amount predicted to be present. In 1999 the USGS estimated the total volume of oil in the formation to be in the range of 413 billion barrels.
What then can we make of the claims that this oil field is the solution to America’s oil problems, and that development of this field will hail the return of cheap gasoline in the US?
The 4.3 billion barrels of oil available in this area must be seen in context. The United States presently uses somewhere in the vicinity of 7 billion barrels of oil each year, meaning that all the oil readily able to be extracted from this formation would last the US less than eight months. This is in contrast to Saudi oil production which is over 8 billion barrels a year and will continue to be so for some time.
The remainder of the oil in the formation cannot be accessed without great effort and expense. Due to this it is highly unlikely that the field will be developed in a major way until oil prices are so high and demand is so great that there is no alternative.
Clearly the Bakken oil field does not qualify as “the next oil boom”. Caution must be exercised when considering investing any money in projects that make improper use of the USGS reports on this formation’s oil bearing capacity.
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