Montana’s Vast Untapped
Entire Field Compares to One of Saudi’s Largest
By Gil Browning
America has plenty of oil, much of it right here in Montana. How many times have you heard that? Yet it’s true. Gov. Brian Schweitzer puts the reserves beneath the state at 40 billion barrels, an impressive number compared to the country’s proven reserves that total 21 billion barrels, which excludes those yet to be counted in Montana and North Dakota. Adding North Dakota and Canada’s oil, part of the same formation under Montana, the numbers get much bigger, and Schweitzer’s estimate is low compared to those of experts in the field.
The governor told the New York Post recently that he has the solution to the oil crisis right in our backyard: the state's Bakken region, which extends into Canada and North Dakota. And Schweitzer says that unlike other places in the U.S., Montanans are eager to drill, even build new refineries near places like Sydney.
Government estimates, though, put the state’s oil reserves at one-tenth of Schweitzer's estimate, just 4.3 billion barrels, but the governor and others discount the federal bureaucrats.
"They are always conservative," he said. "There will be more. It'll probably be more like 40 billion."
The U.S. Geological Survey called it the largest continuous oil accumulation it has ever assessed, while cautioning recently that little of the oil could be recovered. Still, as much as 500 billion barrels of oil may be sitting untapped beneath Montana, North Dakota, Saskatchewan, and Manitoba’s Bakken Formation, according to the USGS, a potential supply of oil four times as large as that held in Saudi Arabia’s massive Ghawar region.
Not all oil fields are alike though or the oil easily recovered. But in contrast to a recent statement by a USGS bureaucrats, who called the prospect of significant oil in the Bakken “a myth,“ half of the Bakken oil may be recoverable using current technology and methods, and with the price of oil rising, and previous studies failing to account for how current prices contribute to recoverability, the Bakken Formation is now considered by many an abundant source of accessible oil, which, if tapped and used domestically, would signifi-cantly diminish America’s dependence on foreign oil.
Bakken is a 350 million-year-old subterranean layer of rock in the Williston Basin that spans the prairie lands of the U.S.-Canada border. Oil there was discovered in 1953 by geologist J.W. Nordquist. The formation was named after Henry Bakken, who owned the Montana farm where Nordquist began drilling.
By 1974, during the oil “crisis” of that period, the Bakken Formation attracted attention as the U.S. and other countries focused on their demand for petroleum, but it was not until 1995 that the USGS assessed the formation and found that the amount of oil Bakken holds is stunning, between 503 billion barrels of petroleum (maximum), 271 barrels (minimum), and most likely about 413 billion barrels.
That compares with 125 billion barrels at the massive and easily accessible Ghawar field in Saudi Arabia.
“There is no other basin worldwide where we may presently draw this conclusion. This certain knowledge that 413 billion barrels of in-place oil exists in the Bakken source system rocks in the Williston Basin presents the oil industry with an unparalleled exploration opportunity.' said Geologist J.W. Price, the Denver-based geologist who conduc-ted the field assessment for the USGS.
"All this generated oil remains in the Bakken shales and in the rocks adjacent to them at relatively shallow burial depths," wrote Price, deceased since 2000, having died of a massive heart attack, and whose report was not peer reviewed.
The oil, though, in the Bakken formation, is wrapped in layers of shale, potentially frustrating current extraction methods and making the costs of drilling prohibitively high. As recently as this year, bureaucrats with the USGS, move over, using public rather than private sector reasoning, have said that the idea that there are vast quantities of oil available in the Bakken formation is a myth.
Others believe, though, that the myth’s on them. In 1993, David Bardin, a former energy official in the Carter administration, prodded the Department of Energy to look into Bakken, but with oil prices hovering around $10 a barrel in those days, oil companies found prospects in the Bakken area cost prohibitive and abandoned efforts there.
Oil prices climbed, though, in 2000, and Bardin again tried to get the feds to research the Bakken petroleum reserves. Dick Findley, meanwhile, a geo-logist in Billings, had beaten the government to the punch.
"He was drilling for oil in Richland County, Montana, at a depth well below the Bakken; he found some, but not enough to be commercially viable," Bardin told the Canadian Broadcasting Company last month. "But he decided to investigate a bump that his drill hit about halfway down—it was huge, it was the Bakken."
Findley began leasing land their and studying methods that might get the oil out of the ground effectively, including drilling horizontally into the layered deposits. Extracting oil from deposits in rock required a fracturing method, which Findley devised, that pumps sand into a well which then collapses the rock and forces the oil toward the surface. Doing so increased the state’s oil yield 100 percent by 2003.
"This Bakken deal is incredible," Steve Reger, a geologist associated with the project, told the CBC, because virtually every well at the Elm Coulee Oil Field [in Richland County, Montana] produces oil.
The oil produced from Elm Coulee is high quality crude, liquid in form, free of sulphur and water, and the field is considered the most productive land-based of all developed in the lower 48 states since 1949, hey day of the Texas oil boom, and right here in Montana.
Similar results have been underway in Canada, with over twenty-five percent of the Bakken formation found in Saskatchewan and Manitoba.
"Production from the Bakken has been stupendous," Roy Schneider, a spokesman for Saskatch-ewan Energy and Resources, told the CBC last month.
In 2004, production was 278,540 barrels, and in 2007 the yield jumped to just shy of 5 million barrels.
The drilling activity has started an economic boom in the area. Home sales this year, and last, along with the overall housing market in the area, are more robust than anywhere else in Canada. Even hotels are booked solid, as people scramble for lodging.
Different estimates have been given as to the quantity of oil and natural gas on the Canadian side of the border, with each successive one higher than the last.
According to USGS study results released in April, average undiscovered volumes of oil in the Bakken Formation of the Williston Basin in Canada, Montana and North Dakota that can be accessed using available technology come to just 3.65 billion. Another government study concluded there are 167 billion barrels of oil under North Dakota, about 2 billion barrels of which can be recovered with current technology.
USGS numbers, though, underestimate the actual quantity of oil in the ground, Bardin says. "When the USGS talks about 'undiscovered volumes,'” he told the CBC, “they are only estimating the amount that is not already part of proven reserves, so you have to add that to proven reserves. Every time you drill new wells, it passes from undiscovered to proven reserves." And with the price of a barrel of oil rising, the quantities that can be recovered also rise.
Another factor suggesting that more accessible oil is in the Bakken than official estimates reveal is that Price did not include Canada in his 271-503 billion barrel estimate, because he didn’t believe oil would be found in the northern Bakken. With Saskatchewan producing 5 million barrels annually, it stands to reason that Price’s figures may be rather low, perhaps by as much as 25 percent, in that at least one fourth of the Bakken is in Canada.
Pipeline versus Pipe Dream
Senator Byron Dorgan (D-ND) points to a lack of pipeline capacity in his state, which reflects a greater problem in the U.S., the country’s failure to invest in energy infrastructure through drilling (prohibited in most areas off shore and in places like the Arctic National Wildlife Refuge) and with no new refineries having been built in the country for decades. Pipelines through North Dakota, Dorgan notes, are filled with oil flowing south from Canada, retarding Bakken’s potential in his state.
Critics worry that pulling oil out of Bakken will remove the pressure to develop alternative energy. “Even in a best-case scenario, those technologies are decades away from replacing petroleum," Bardin said. "You've got to remember that those old wells in Texas and Alberta are petering out; we need to use the petroleum from the Bakken to get up to speed on alternative energy sources without ruining our economies."
Bardin recognizes, though, that Bakken will not solve all the energy needs facing countries like the United States and Canada. The quantity of oil in the formation is indeed enormous, but unlike Saudi Arabian oil, it’s hard to get. Yet, he believes, advances in oil extraction technology will open increasingly more areas to drilling, and with high oil prices an inevitability for some time, the power of economic incentive will draw the oil out of the ground.
He believes that as technology develops, more and more of the Bakken will become recoverable; and that as oil prices rise, technology tends to develop more quickly.