I THINK THIS POST SHOULD BE SEEN:
Frequent Internet users are getting emails about the Bakken Formation in North Dakota and Montana, supposedly a great oil bonanza just waiting to be tapped if only nasty enviros would let it happen. The emails and websites say that Bakken would solve all our petroleum “needs.” (What, me worry about global warming?)
Don’t believe it. There’s some oil to be gotten out of Bakken, and it’s going to be exploited. But the “bonanza” is nothing but hype.
U.S. Geological Survey (USGS) estimates of technically recoverable undiscovered oil reserves have gotten a lot of people stirred up about Bakken. In the industry, such USGS estimates are widely discredited as overly optimistic, however, and this is borne out by the current record of production from Bakken. In addition, the terms in which USGS presents their estimates are misleading. First, some numbers to bear in mind:
Current US oil production is about 1.9 billion barrels/year (5.3 million barrels/day)
Current US oil consumption is about 7.1 billion barrels/year (19.5 million barrels/day)
Not unreasonably, USGS estimates of undiscovered and technically recoverable oil are posed rather like gambling odds. At Bakken, USGS estimates:
5% chance of finding a total of 4.3 billion barrels,
95% chance of finding a total of 3.1 billion barrels, and
50% chance of finding a total of 3.6 billion barrels (the famous USGS “mean” estimate).
In its Fact Sheet 2008-3021, USGS upped its estimate of undiscovered oil in the Bakken by a factor of 25, compared to its 1995 figures. Many petroleum experts are quite willing to agree with USGS’s admission of significant uncertainty in these estimates.
…. BUT let’s take the numbers at face value. Together with consumption figures, they imply that:
• USGS thinks there may be a very low (5%) chance of finding (not of producing!!) what amounts to slightly more than 7 months of current US oil consumption (that’s the best possible, assuming no growth in oil consumption!).
Unscrupulous sellers of interests/stock in the Bakken mention only this 5% figure, or even the field’s total possible oil endowment.
• The more realistic low figure represents a very high (95%) chance of finding a tad over 5 months of our current consumption.
• The media typically report USGS’s mean estimates as though they’re real, but the mean is just an average of the other two. In this case, the mean amounts to an even chance of finding about 6 months of current US oil consumption. But this mean really should be thought of as meaningless, for when the 5% and 95% figures are averaged (5% chance + 95% chance, divided by 2), the number assigned to the very unrealistic 5% chance is the tail that wags an over- optimistic chimera-dog.
Fact: average oil field production worldwide amounts to only about 25% of the total oil in a field. Current industry expectations for total oil recovery in an intensely drilled portion of the Bakken Formation are a little over half the USGS 95% chance estimate for that area. So forget the mean and 5% chances of discovery.
Last word: It takes a long time and thousands of expensive (~$4-8 million each) wells to fully develop a field the size of the Bakken, which means that the Bakken can have only a barely discernible impact on daily US oil supply throughout the life of the field.
For a fuller discussion of these issues, see Appendix 9 (U.S. and Them: The United States and World Oil Reserves) in our book, The American West at Risk. To order the book, go to
http://theamericanwestatrisk.com.Look up the estimates and consumption figures yourself in these useful reports:
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