ADDENDUM 3/7/12

 

The previous communication placed the Bakken recoverable oil reserves at 3.7 billion barrels, according to the 2008 US Geological survey

    

A year ago (Feb, 2011), Continental Resources increased that estimate to 24 billion barrels (a 5-fold increase) (http://www.ogj.com/articles/2011/02/continental--bakken.html).

    

Continental Resources is the second largest independent oil exploration and production company in the US, with a market capitalization of $16 billion.

     

We don't know the basis of the new Continental Resources estimate, but will assume it is reasonably correct, because there has been continued technological drilling and production improvement since the US Geologic Survey in 2008.

     

This changes the picture somewhat. Instead of Bakken reserves of available oil covering about a year and a half of net imports, the available Bakken reserves will cover about 8.6 years of net imports (24/2.8).

    

A key point is that if we have within the time span of 3 years such a radical increase in estimated US oil availability from only one region, how silly it is to assume that the world is rapidly running out of oil to justify the program of spending billions of taxpayer dollars now to develop new sources of energy.

 

ORIGINAL 3/6/12

    

The Bakken is a rock formation in the northern corners of North Dakota, Montana, and extending into Canada. It contains a substantial amount of oil. Some of the oil is "free", which means it is easily accessible. but most of it is bound in the rock, which made it unavailable.

    

The US Geologic Survey, which is part of the Department of Interior, estimated in 1995 that the Bakken contained 151 million barrels of recoverable oil using technology available at that time. In 2008, the estimate was increased 25 times to 3.7 billion barrels, because of  advances in drilling technology (http://www.usgs.gov/newsroom/article.asp?ID=1911).

    

The new technology involves drilling to a depth of 2 miles followed by horizontal drilling to follow productive layers(http://en.wikipedia.org/wiki/Bakken_formation.

    

The US imports 10,9 million barrels of oil per day, which is 4.0 billion barrels per year (ftp://ftp.eia.doe.gov/pub/oil_gas/petroleum/data_publications/company_level_imports/current/import.html). The US exports 3.2 million barrels per day, which is 1.2 billion barrels per year (http://www.indexmundi.com/united_states/oil_exports.html). Net imports are 2.8 billion barrels per year.

    

While Bakken reserves are substantial. it appears that recoverable oil (3.7 billion barrels), using present technology of deep and horizontal drilling combined with rock fracturing techniques would only cover a little more than a year's net imports (2.8 billion barrels).