52 thoughts on “The Bakken”

  1. “Peak oil” was an invention of the Green-o-bots to scare the witless and little children. Adults knew better.

    The high price of energy – unnecessarily forced by the self-same Green-o-bots – is one thing that keeps 3rd world countries from emerging into the 2nd world. The Greeno’s have a lot to answer for.

    1. The peak doomsday concept is much older that that!
      We obviously once ran out of flint stones and had to regrade to using metals. And when we ran out of wind we had to abandon sailing ships to instead use coal steamers. Human history is nothing but a series of events of us running out of “resources”. I recently ran out of my old PC and had to get a better one to replace it. The growth of humanity in numbers and wealth is just evidence that the end is near! Any time now. Now. Or not now, but now.

      1. Whether it’s Yahweh or Gaia, doomsday fantasy ideologies are quite ancient. When doomsday doesn’t come on time it rarely causes the faithful to rethink their ideas, instead it just causes them to shift the date yet further or switch to a more abstract concept of doom. Christianity started as a doomsday cult, as did the Jehovah’s Witnesses. The one believing Armageddon would arrive sometime during the 1st century, the other in the early 20th century.

        There is now a modern religion which holds to the sinfulness of mankind in the form of consumption and industrial activity. Oil is evil, industry is evil, commerce is base, nature is pure and untainted and good, and so forth. Naturally they tend to fall into believing things like peak oil and catastrophic anthropogenic climate change (punishment for the sins of consumption and using nasty petrochemicals), regardless of the evidence.

    2. “Marion King Hubbert (October 5, 1903 – October 11, 1989) was a geoscientist who worked at the Shell research lab in Houston, Texas. He made several important contributions to geology, geophysics, and petroleum geology, most notably the Hubbert curve and Hubbert peak theory (a basic component of Peak oil), with important political ramifications. He was often referred to as “M. King Hubbert” or “King Hubbert”.”

      Considering King Hubbert made his principle contributions in 1956, some two decades before the
      environmental movement began in the 70’s.

      1. And Issac Newton was a great mathematician and physicist, who also believed in spiritualism.

        Hubbert was a superlative geologist, but an economist and industrial scientist, he was not. Whatever his gifts, he was grossly mistaken here, and his delusions were used by weak-minded charlatans (include yourself here) to scare weaker-minded children.

      2. Hubbert had a theory, a theory that seemed reasonable over a very small sample size but which did not have sufficient backing to be reasonably called a provable result. Despite that many folks believed in the theory because they wanted to believe it was true. Today we finally have enough data to conclusively rule on Hubbert’s peak oil hypothesis, it’s false. It only applies over a brief period of time when there is not much technological change and limited exploration of new wells. Moreover, the underlying mechanism of the theory has some fundamental problems, because it looks at oil production in a single region but ignores the fact that oil has always been a global market. So factors that make the peak oil hypothesis appear correct when looking at a small region over a short period of time are muddled by economic factors which change over time and can result in a later turnaround in production.

        1. Hubbert’s geology was right, all wells decline over time, all fields decline over time, new technology can increase the percentage of recovered oil from 30% to 50%, but never past 100%.

          The world is just a big region

          1. Hubbert was wrong and the US is un-peaking. He said US peak was in the early 70’s and current projections show we will exceed that level soon.

          2. Making definitive predictions on future technology and future oil discoveries is a foolish game, all that can be guaranteed is that “all wells decline over time, all fields decline over time, new technology can increase the percentage of recovered oil from 30% to 50%, but never past 100%.”
            and that future discoveries can push global peak into the future as long as they continue to be made, perhaps to the extent that something else will make oil redundant before global depletion becomes a serious economic problem.

          3. That’s not what Hubbert’s peak oil hypothesis says. The “theory” that the Earth has a finite supply of hydrocarbons that can be exhausted by humans is hardly a theory, it’s almost a tautology. What matters is the practicality, which was where “peak oil” attempted to make a prediction but failed spectacularly. What we want to know, and what Hubbert’s hypothesis alleged to tell us, is how much total petroleum we can expect to produce and thus about how long we can expect to rely on petroleum. And there Hubbert’s hypothesis has utterly failed. Because it can’t actually predict when peak petroleum production will occur, not within a decade, not even within a century.

            The fact is that it’s perfectly plausible that future technological advances will enable continuous increases in worldwide petroleum production throughout the entirety of the 21st century and possibly beyond, at prices comparable to modern prices (adjusted for inflation). And that basic fact smashes the teeth right out of the “peak oil” hypothesis.

            It has no value as a theory and the fundamental premises the theory was based on have been shown to be faulty.

            As to your glib pronouncement that new technology can never increase the percentage of recovered oil past 100% that too is wrong. Because the baseline is the estimate of recoverable oil, not the hypothetical perfect knowledge of the total amount of oil in the world. Increases in technology (such as fracking, shale oil, and tar sand processing) have increased the amount of known reserves by a huge margin. Today’s 100% is not yesterday’s 100%, and today’s 50% can easily be greater than yesterday’s 100%. That’s where Hubbert failed the most and where proponents of “peak oil” theory miss the mark.

          4. There are two positions on peak oil amongst oil geologists, Early Peakers people who don’t expect technology and future discoveries to push the peak far into the future, and Late Peakers wqho do expect that, either way, it’s still peak oil, there is of course another group who think that you only have to drill a bit deeper to find more oil.

  2. The oil field is estimated to hold 4.6 billion bbls OOIP.

    That’s Original Oil In Place, it used to be about 30% of OOIP was recoverable, assuming this one is 50% with tomorrows technology, world oil consumption is something like 90 million barrels a day.

    2300/90=25.5 days.

    1. Andrew,

      You make a good and simple point, but it just didn’t make sense to me. I decided to check USGS data. They have Bakken OOIP at 149 billion boe. That same assessment from 2010 (sorry, can’t provide link right now but found it in search) had Three Forks at 20 billion boe. I think the article has some error, but the statement is so poorly worded, I’m not sure what oil field they are referring (Flat Lake Torquay, Viewfield Bakken, Three Forks, Canada’s portion only). Further the 2010 EUR was roughly 5.7 billion boe, so maybe they were reporting a conservative range (F95 number) of EUR and put OOIP.

      Bakken increased World reserves by years and certainly not just one month. More important the technology will increase the EUR for other existing fields as well.

    2. The US doesn’t have to meet the world’s oil needs. According to this source, the average US oil consumption per da in 2013 was 18.89 million barrels per day. Using your estimate of 2300 million barrels, this one source would supply all of the US’s oil needs for 121.75 days.

      Fortunately, that’s only one of many sources of oil. This 2012 government estimate puts the US technically recoverable oil reserves at 220.2 billion barrels, enough for 11,657 days at 2013 consumption levels. Since 2012, more oil has been discovered so that estimate is low. Add to that increases in fracking efficiencies and other extraction technologies and the numbers are looking even better. Likewise, more oil is being discovered around the world.

      1. Your link to EIA does not show barrels of oil consumed but barrels of petroleum products consumed. They are related but different. Here is the actual quote

        “In 2013, the United States consumed a total of 6.89 billion barrels of petroleum products, an average of 18.89 million barrels per day.1 This total includes about 0.32 billion barrels of biofuels.”

        1. No one purchases jet fuel, gasoline, or heating oil by the barrel. Petroleum products range from fuels at the high end to asphalt at the low end plus many chemical feedstocks in the middle. I’ve never seen anything but oil itself measured in barrels.

    3. “2300/90=25.5 days.”

      For the two formations, the US Geological Service USGS estimates mean recoverable oil resources of 7.38 billion barrels. Estimates for the Torquay account for 3.7 billion bbl.

      These estimates seem very conservative to Continental Resources; the largest acreage holder in the Bakken is more optimistic about the total amount of oil that could ultimately be recovered.

      In its own assessment, Continental believes that including the deeper parts of the Three Forks increases the total amount of oil originally in place (OOIP) from 577 billion barrels of oil to 903 billion, and the amount that is technically recoverable from 20 billion barrels to as much as 32 billion, 36 billion or even 45 billion.

      But, other than that, yeah, the oil should only last 25 days and isn’t worth drilling for, because this part of the Bakken field is the only usable oil on the entire planet… [/sarc]

    4. Sorry, my comment was stuck in “error” loop and I didn’t get it posted until after others had said basically the same thing.

      So, for those wondering, yes, there probably *is* an echo in here… Mea culpa.

      1. I once defined a Progressive as someone who cannot comprehend mathematics with any degree of complexity. If you understood math, you wouldn’t be a Democrat.

      2. I should point out that math didn’t exactly turn out to be your best friend when we tussled awhile back over baseload electrical generation vs. so-called “renewable” energy sources – especially the bit about battery storage. On the federal deficit, national debt, actuarial soundness of Social Security, Medicare and government employee pensions, climate models and many other matters too numerous to list here, math is definitely not on your side.

        1. set any arbitrary assumptions, you can make the final numbers work out
          any way you want to.

          You assumed solar is the only renewable energy tech and you set a very high price for battery and pushed for very high loads.

          “On the border to Denmark, Schleswig-Holstein is a largely rural state – and Germany’s windiest area. It is home to the country’s only Energiewende Minister, and it will produce as much green electricity as it consumes total electricity over the year for the first time in 2014.

          Two years ago, we reported on the state’s plans to go 300 percent renewable, a target that then-Environmental Minister Peter Altmaier did not doubt the state could reach. He merely wondered who the state would sell to given all of the other targets for 100 percent renewables in power supply elsewhere in the country.

          This year, Schleswig-Holstein will cross a symbolic milestone towards that goal by producing as much renewable electricity as the state consumes in electricity (including conventional) over the year as a whole – meaning that the figure is a net calculation, not that the state can do without interconnections to Denmark and other parts of Germany. Indeed, the state needs the grid both to sell its excess renewable power and to purchase conventional electricity.”

          El Paso electric is phasing out Coal from their generation portfolio.

          Instead of making up ground rule numbers, I’d suggest you check with reality.

          1. On the border to Denmark, Schleswig-Holstein is a largely rural state – and Germany’s windiest area. It is home to the country’s only Energiewende Minister, and it will produce as much green electricity as it consumes total electricity over the year for the first time in 2014.

            How many times have you been told that Germany is abandoning its green policies? Try these links

            But of course, you won’t look because it will shatter your paradigm.

          2. “The new Merkel government has now announced reduced feed-in tariffs for new installations in a revised “EEG 2.0” strategy for achieving at least 35% renewable grid supplies by 2020 at only moderate additional cost to customers. Under this plan, average feed-in payments would be reduced from 17 to 12 cents/kWh and for onshore wind power to maximally 9 c/kWh. The former practice of excluding large corporations (even golf courses) from EEG burden sharing is to be restricted to operations exposed to foreign competition. Feed-in payment obligations will also be imposed on efficient on-site generation and use.

            Fossil fuels will likely dominate grid supplies in Germany until after 2030

            None of this means that the government is scaling down its ambitions. On the contrary, CDU/CSU and SPD in their coalition pact of November 27, 2013, agreed to increase the contribution of “renewable energies” (implicitly on the electric power grid) to 40 to 45 percent in the year 2025 and to 55 to 60 percent in the year 2035 – to be realized under consideration of “broad public participation” and “limitation of costs”.

            Germany is still aiming for 35% renewable energy by 2020, and will likely hit that much sooner. The FIT’s will have to scale back as renewable become dominant players. Right now Renewables outperform nuclear, and the Merkel government is dedicated to shutting down the nukes.

            What happens next will be very interesting.

    5. The article says the estimate OOIP was increased from 500 something Billion barrels to 900 something Billion Barrels. I suggest you re-read it.

    6. “In its own assessment, Continental believes that including the deeper parts of the Three Forks increases the total amount of oil originally in place (OOIP) from 577 billion barrels of oil to 903 billion, and the amount that is technically recoverable from 20 billion barrels to as much as 32 billion, 36 billion or even 45 billion.”

        1. That’s an assumption that is not holding up, which was the point of the article. Now you’re starting to sound as foolish as Deny Guy claiming recovery costs greater than $100 boe, while the actual drillers are claiming >$70 profit per boe at today’s prices.

          1. Have a look at the quote in M Puckett’s comment: ” OOIP 903 billion … recoverable from 20 billion barrels to as much as 32 billion, 36 billion or even 45 billion.”

            45 billion is 5% of 903 billion.

          2. Some of you people just seem to want to see something in my comments to argue with.

            Perhaps because your earlier comments were so wrong, and while you did correct one of them; you haven’t corrected all of them. I’ll admit that I thought you were misusing the term tight oil, but for many, it really is just another term for shale oil. And I found that people who tend to use tight oil rather than shale oil are very derogatory towards obtaining it.

            But have you noticed that your claim to only 5% recoverable is because you are going by the F95 estimates, rather than acknowledging the multitude of claims that producers are obtaining far greater results than those very conservative F95 estimates? Or that your claims to technology only allows for 5% today, and that maybe in the future it will be more, seems to ignore that the technology is exceeding 5% today?

            So I scroll up and see this from you: “45 billion is 5% of 903 billion.” But here’s the thing Andrew; USGS has OOIP for Bakken at around 150 billion boe. Continental, because they are getting flatter declines and higher production, are now saying it is greater than 500 billion up to 900 billion. Earlier you seemed to jump on simple mathematics. So let me ask you this question, which do you think is more likely true:
            1) The Bakken Field OOIP (essentially the basin’s volume) grew 10 times larger based on production results that can only achieve 5% recovery thus the volume must be larger
            or
            2) The Bakken Field basin is probably unchanged, maybe 150 billion maybe more, but that production is actually greater than 5% because of a disruptive technology that simply doesn’t match older predictive models.

            I think the horizontal drilling is providing a greater surface area across the well within the reservoir resulting in higher production levels. The 5% recovery models date prior to the acknowledged widespread use of horizontal drilling in these formations, so I think they are based on vertical wells with smaller surface areas to the reservoir. The result is higher than expected production.

            Perhaps the reservoir size was miscalculated too, but a reservoir can absolutely be no larger than the area of the field times the depth of the basin, with OOIP then taking into account permeability. If the OOIP is increasing that much, either the field area is getting larger, the basin is getting deeper, or permeability is higher. If you think recovery is only 5%, then what do you think is driving the increase in OOIP?

          3. recoverable from 20 billion barrels to as much as 32 billion, 36 billion or even 45 billion.”

            45 billion is 5% of 903 billion.

            This mathematical calculation of percentage is certainly correct within a certain level of precision.

            However, your initial claim WRT recoverable percentage was:

            That’s Original Oil In Place, it used to be about 30% of OOIP was recoverable, assuming this one is 50% with tomorrows technology, world oil consumption is something like 90 million barrels a day.

            2300/90=25.5 days.

            You really need to pick a position on this and at least try to appear that you believe it, or admit that you have change your opinion on the matter.

            If the recoverable percentage of oil in place is only 5%, but the estimate of oil in place is 900 B barrels, that 45 B barrels of oil is still a MUCH higher volume of oil than 50% recoverable of the original 4.6 B barrel estimate (2.3 B).

            I’ll say it more slowly. 45 Billion is much larger than 2.3 Billion (almost 20 times larger).

            Come to think of it, this is a perfect alanogy to the arguments about tax rates and government revenue. 50% tax rates on a struggling economy, netting $2.3B of tax revenue, is MUCH less revenue than a 5% tax rate on a booming economy that nets $45B of tax revenue.

            Even if one can’t wrap their head around the concept of lower tax rates leading to higher tax revenues due to an enlarged economy, it should be fairly obvious that 45 bbo is more than 2.3 bbo. It’s a smaller slice (5% is only 10% of 50%), but of a MUCH larger pie (900B / 4.6B ~= 19,565%).

          4. Yeah, I saw that The oil field is estimated to hold 4.6 billion bbls OOIP.
            and though, hang on, that’s not such a big field, sorry my bad.

            Leland said:
            Continental, because they are getting flatter declines and higher production, are now saying it is greater than 500 billion up to 900 billion. Earlier you seemed to jump on simple mathematics. So let me ask you this question, which do you think is more likely true:
            1) The Bakken Field OOIP (essentially the basin’s volume) grew 10 times larger based on production results that can only achieve 5% recovery thus the volume must be larger
            or
            2) The Bakken Field basin is probably unchanged, maybe 150 billion maybe more, but that production is actually greater than 5% because of a disruptive technology that simply doesn’t match older predictive models.

            I would have thought 1), Isn’t that what this bit says?
            These estimates seem very conservative to Continental Resources; the largest acreage holder in the Bakken is more optimistic about the total amount of oil that could ultimately be recovered.
            In its own assessment, Continental believes that including the deeper parts of the Three Forks increases the total amount of oil originally in place (OOIP) from 577 billion barrels of oil to 903 billion, and the amount that is technically recoverable from 20 billion barrels to as much as 32 billion, 36 billion or even 45 billion.

  3. The real question is what’s the cost of extracting ‘tight’ oil?

    At what cost will this oil be produced?

    Much above $100, and demand will really fall off.

    1. Reading the article, one operator reports a test well that showed “More than $73/boe in operating netbacks (netback=profit per barrel).” with an ROI over 300%. In other words, it would be profitable at a lot less than $100 per barrel.

    2. As with all resource extraction the cost will be high initially and then fall off quickly over time, due to the amortization of initial technology R&D costs. The same pattern that has held, especially with oil extraction, for well over a century.

      1. Production of oil from any given well falls off rapidly, more oil is produced in the first year than over the remained of the wells life, so to keep production across a field constant over a few years new wells are constantly being drilled.

        1. “These are low-decline, high-rate-of-return wells that payout in less than 7 months”

          If you are going to comment on this shit, please read the fucking article first for the sake of the other posters who did their homework assignment.

          1. Puckett provided a direct quote from the article that contradicts your statement. He provided it even though, as Puckett states, most of us have done our homework to know your statement was BS from the start.

            The analysis of the Bakken has changed several times over the past decade. It was written off by much of the industry when agencies like the USGS claimed “tight oil” in 1995 with only 150 million bboe. By 2008, it had to be revised to 25 times there estimate, because technology advances proved the original analysis wrong about what could be recovered easily (by 2008, 450 million bboe had already been produced by the Bakken). By 2013, the 2008 numbers had to be revised upwards again (nearly double 2008). The latest article is claiming another revision upwards needs to be made.

            And with this information easy to find in the public domain, you still want to claim “tight oil” and rapid dropoff? You’re either an idiot, ideologue, or ignorant of the subject matter.

        2. Oh, I see. So it’s hugely unprofitable to drill for oil then? That explains why the industry is in decline.

          Were you just replying to my comment to add words or do you actually have something worthwhile to add? Are you implying that technology development is identical to drilling a single well? Are you implying that drilling a new well from an existing wellhead using existing technology is some sort of extraordinarily expensive prospect?

          1. I’m saying that while costs decline so does production from each well, and that each new well drilled to maintain production costs literally millions of dollars. Something you didn’t cover.

        3. My comment: “more oil is produced in the first year than over the remained of the wells life” should have been: “production typically declines by over half in the first year of production.”

          Google: decline curve for bakken shale oil wells

          1. Are you basing your comments on an IT professor, who is using data from the USGS that even the USGS has had to revise upwards many times? Because the decline predicted by USGS in 2008 and that IT guy hasn’t occurred. That’s a pretty stupid strategy to follow there, Andrew. Here’s a counter analysis found by simply adding “flat” to your Google search:

            J. Marshall Adkins and John Freeman said in a note to clients on Monday there is a “growing misconception” that production might collapse in several plays because of the high decline rates, which in turn would snap the oil renaissance underway. The theory is, more drilling would be required to maintain the growth in oil supplies to offset declines from existing wells.

            “This simply is not factually correct,” said the duo.

            I wouldn’t suggest just taking that analysis by itself. Do some research, and check your dates carefully. Anything analysis written prior to 2008 about the Bakkens is grossly out of date. Anything prior to 2013 is likely too old as well. And recall the whole point of the link from Rand’s post is that the 2013 analysis is now dated.

          2. From your link: “Initial decline rates are huge — 70% in Year One, but by the third and fourth year, rates moderated to 15-20%”

            In what way does that contradict “production typically declines by over half in the first year of production.”??

          3. You seem to think that I’m arguing that because the oil is “tight” that this will mean a lower extraction rate in the future than was expected, in fact it means the opposite, because the reservoir is challenging to todays technology allowing only ~5% recovery, the potential exists for future technology to extract significantly more.

            Good grief, Some of you people just seem to want to see something in my comments to argue with.

          4. Good grief, Some of you people just seem to want to see something in my comments to argue with.

            Hey Andrew, who is that in the mirror?

  4. Re the argument above: who cares? You either trust the energy companies to do their job, or you trust the government to fuss and worry and make plans which will never amount to diddly squat.

    This is the fundamental dividing line between liberals and conservatives. Liberals are control freaks who do not think that anyone else knows what they are doing, and have to be guided by enlightened reason from above, despite the fact that they have never shown any particular intellectual prowess or solid results. Conservatives trust that they people who are actively engaged in a given activity are going to have the greatest knowledge and experience base, and will run rings around the intellectualoids every time. History bears them out.

    So, let’s say the oil is used up quickly. What should we do? Ask the government to subsidize the worst alternatives? Or, let the energy producers choose among the best alternatives to deliver the product with which they are supremely familiar? I vote the latter. How many government sponsored energy boondoggles do we need (I’ve lost count, with all the synfuels and Solyndras and other fiascoes over my lifetime) before we realize that this is just not something which we should entrust to the corrupt, pandering amateurs in public office?

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