THE REALITY: The U.S. does not have enough oil reserves to meet 100% of our domestic current needs, now or in the future.
A lot of hype has been generated by shale oil resources such as the Bakken Formation centered in North Dakota. For instance, widely-cited numbers claim that up to 500 billion barrels of oil are ready to be extracted from Bakken. Not only is this figure the extreme high end of an uncertain volume of oil, but it also ignores the technical and economic feasibility of extracting the estimated oil in place. Particularly for unconventional oil resources such as the shale oil of the Bakken, only a small percentage of oil in place is technically recoverable.
The U.S. Geological Survey’s 2008 assessment estimated that the Bakken contained between 3.0 to 4.3 billion barrels of technically recoverable oil. North Dakota’s own technical assessment estimated that 2.1 billion of the state’s 167 billion total barrels of oil in place are recoverable. These estimates amount to technically recoverable oil at 1%-2% of oil in place.
Based on current U.S. consumption rates, the Bakken’s mean volume of 3.65 billion technically recoverable barrels amounts to approximately one year of oil. In addition, this simple number does not account for the timeline required to ramp up extraction and distribution in order to produce oil at a rate that can satisfy our needs.
Approximately 150 million barrels were produced from the Bakken in 2011. The 33% increase from 2010 continues a dramatic upward trend of production. However, the recent heavy investments have been spurred by sustained high oil prices. Future trends will depend on continued profitability for the more expensive extraction methods necessary to produce the Bakken’s shale oil.
Should we drill? Of course we should! When you are starving you don’t go on a diet. The problem is that drilling is not the long-term solution for fuel freedom. World demand will continue to drive the price up because our capacity to drill and develop new fields in the U.S. is tiny compared to the collective appetites of the emerging markets.
- N.D. study estimates 167 billion barrels of oil in Bakken