The Bakken is a formation of shale source rock covering about 200,000 square miles of North Dakota, Montana and Saskatchewan. It is currently the largest known reserve of light sweet crude in North America.
Oil was first discovered here in 1951, but due to technical limitations, it has only been until fairly recently that any significant amount of oil has been recovered.
Although the total amount of oil contained in the Bakken shale could be several hundred billion barrels, the oil is trapped within the shale itself, and is consequently hard to extract.
In 2008, the USGS issued a report that estimated the total technically recoverable oil in the Bakken at 3 to 4.3 billion barrels. That’s obviously a significant amount of oil, but much less that what is most likely contained in the shale formation itself.
Recent developments in oil extraction technology have led to impressive increases in the amount of oil coming out of the Bakken. The key technology, hydraulic fracturing or “fracking,” has had the most significant effect.
At the end of 2010, the rate of oil production from the shale formation had increased to 458,000 barrels per day, which put a serious load on the local infrastructure’s ability to even ship the oil out of the region.
These recent increases in production have led some industry experts to conclude the original USGS estimate of 3 – 4.3 billion barrels as far too low, and they may be. More recent estimates have come up with figures as high as 24 billion barrels in technically recoverable oil.
Of course, the key to determining that amount of total recoverable oil is in determining what percentage is technically recoverable. Estimates of that have ranged from 1% to 50%, obviously a very broad range.
As with any subject involving vast sums of money, conflicts of interest can play a role in such assessments. The reports released by both the USGS and the state of North Dakota (presumably more objective sources) would suggest that the lower range of percentage estimates are much more realistic.
Of course, the total amount of technically recoverable oil depends in large part on technology, and recent advances in horizontal drilling and fracturing have been responsible for huge increases in production.
A senior manager at Continental Resources, which is one of the main players drilling in the Bakken region, stated that it could be one of the largest discoveries of the last 30-40 years. He based this statement on a total recovery of 24 billion barrels, which is obviously much more than the USGS and North Dakota reports. For more information on companies operating in the Bakken region, see our section on Bakken oil stocks.
Aside from this manager’s obvious personal interest in making such claims, it is worth noting that he’s directly involved in production, and is probably intimately familiar with the real-world application of the technology involved. For instance, his company has developed a technology that allows the drilling rigs themselves to move hundreds of yards under their own power, increasing the rate of well drilling.
While it still remains to be seen what kind of longevity this formation has, and what the total recoverable oil will be, there is no doubt it is the most dynamic discovery currently under production in North America.
The Bakken is also responsible for tremendous job growth, a not-insignificant factor in today’s tough economy. In fact, North Dakota’s unemployment rate is currently the lowest in the nation, and demand for workers of all types shows no signs of letting up any time soon. Check out our section on bakken oil jobs for more information.
Bakkenoil.org is dedicated to providing the best resource of up-to-date information on the region, news, stocks and jobs. As the region develops, jobs are created, companies are purchased, and the oil flows, we will be there.