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Report on Bakken oil potential expected

By JAMES MacPHERSON

BISMARCK, N.D.

A long-awaited federal report on oil that could be recovered in parts of North Dakota, Montana and two Canadian provinces is to be released this week.

The Bakken shale formation encompasses some 25,000 square miles in North Dakota, Montana, Saskatchewan and Manitoba. About two-thirds of the acreage is in western North Dakota, where the oil is trapped in a thin layer of dense rock nearly two miles beneath the surface.

Ron Ness, president of the North Dakota Petroleum Council, said the number of wells in the Bakken increased from about 300 in 2006 to 457 at the end of last year. Bismarck-based MDU Resources Group Inc. announced its first venture into the Bakken this week.

The study being released Thursday by the U.S. Geological Survey was done at the request of Sen. Byron Dorgan, D-N.D., over the past 18 months.

"Technology continues to advance," Dorgan said Monday. "This is not going to be a red light or green light about oil development in the Bakken — clearly there already is a big green light there. But I think the question is pretty clear: How much of that oil is recoverable using today’s technology?"

In 1995, the Geological Survey estimated that using technology available at that time, 151 million barrels of oil could be recovered in the Bakken, said Brenda Pierce, a geologist and program coordinator for the agency’s energy resources program.

Pierce said she would not disclose the study’s findings until Thursday. Asked whether the estimate would be an increase from the 1995 figure, she said, "There is industry in there and having success. There’s your answer."

Julie LeFever, a geologist with the state Geological Survey in Grand Forks, has been studying the Bakken for more than two decades. She calls it an "unconventional resource."

The oil is trapped in microscopic pores of rock, and to capture it, most companies "fracture stimulate" horizontal wells by forcing pressurized fluid and sand to break pores in the rock and prop them open to recover oil.

"It’s not something you would see in most oil formations," LeFever said. With technology, she said, "the success rates are going up, but we’re not all the way there yet."

She said estimates of the total amount of oil in the Bakken Formation have varied wildly over the years, from 10 billion barrels to 500 billion barrels. The higher estimate was done by Leigh Price, a USGS geologist who died in 2000 before his study was published.

Dorgan urged the agency to review Price’s work part of a national inventory of the nation’s oil resources.

Pierce, of the USGS, said her agency used raw data from Price’s study, but also relied on agency experts and information from oil companies drilling in the Bakken.

The study does not estimate how much oil may be in the formation — only what the agency believes can be recovered using current technology.