More Oil

More Oil

There are two reports here about oil. One is a warning from Cybercast News Service that something call the Bakken formation isn't the 400 billion barrel oil field that has been passed around; the other gives a more realistic estimate:

(CNSNews.com) - Reports circulating on the Internet tell of an oil field spanning parts of western North Dakota and eastern Montana where 400 billion barrels of oil supposedly are just waiting to be tapped. However, the U.S. Geological Survey (USGS) tells Cybercast News Service that those huge estimates are "a myth."

A USGS report issued in April estimates that there are between 3 billion to 4.3 billion barrels of oil in what is referred to as "the Bakken Formation" -- well below the 400 billion barrels discussed on the Web, but up from the previous estimate of 151 million barrels made in 1995.

Richard Pollastro, Bakken Formation task leader at the USGS, said the myth stems from a 1999 draft report -- never published -- by a now-deceased USGS employee, Leigh Price. Price estimated that the Bakken Formation holds up to 400 billion barrels of oil. To put that in perspective, Saudi Arabia, the world's largest oil producer, has about 260 billion barrels of known oil reserves.

Price, however, died in 2000, before his study could be peer-reviewed and published, and the Bakken Formation became the fool's gold of the oil industry.

The second is the April 2008 report from the USGS mentioned above:

Reston, VA - 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.

Unlike the oil shale deposits and offshore tracts that the Democrats have prevented from being leased, there doesn't seem to be anything preventing the Bakken field from being exploited. I blogged back in 2005 about how rising oil prices have caused a lot of what are called "stripper wells" (wells that produce only a few barrels a day) to be drilled in places like Kentucky. I would expect that at current oil prices, anyone with access to the Bakken field, and the equipment to drill for oil, is probably doing so.