The excerpt below is from a long, but very informative New York Times Magazine article ”North Dakota Went Boom,” about the Peace Garden State’s amazing oil boom in the Bakken formation (and some history of the state’s previous oil booms). According to some estimates, the Bakken boom might last for 100 years, and is being driven by new, breakthrough drilling technologies, and the state’s “petropreneurs” (and not by any government energy policy):
Around seven years ago — driven by technological refinements that have made North Dakota a premier laboratory for coaxing oil from stingy rocks — the state’s Bakken boom began in Mountrail County. At the time, North Dakota was ranked ninth among U.S. oil-producing states. By 2010 it had climbed to fourth. In July 2012, monthly oil output reached 20.97 million barrels, and North Dakota was the largest oil producer in the country after Texas (see chart above).
Just how much oil is in the Bakken is still unknown. Estimates have been continuously revised upward since a 1974 figure of 10 billion barrels. Leigh Price, a United States Geological Survey geochemist, was initially greeted with skepticism when, about 13 years ago, he came to the conclusion that the Bakken might hold as much as 503 billion barrels of oil. Now people don’t think that number is as crazy as it seemed.
As long as prices stay above $60 a barrel or so, oil will be a mainstay of the North Dakota economy for a generation or more. After drilling companies finish securing leased acreage, it will take 20 years to develop the 35,000 to 40,000 production wells needed to fully exploit the “thermally mature” part of the Bakken shale, an area about the size of West Virginia. Production from a typical Bakken well declines rapidly but on average produces modest amounts of oil for 45 years and earns a profit of $20 million. But as the volume of oil in the Bakken shale is still a moving target, and recovery techniques are increasingly sophisticated, some estimates put the life of the Bakken play, and the attendant upheaval it is causing in North Dakota, at upward of a hundred years.
HT: Dan Greller