[Econ101]

We are talking about giant oil discoveries. The North Dakota production graph is mind boggling! Just at this production rate, and we can see it is changing fast, the annual value of that crude is about 25 billion dollars. So, the resource may have a total value of 10-20 trillion or more over the next 20-30 yrs.

Thats an amazing amount of value and thats just at the wellhead. The energy and compounds found in that crude are going to be refined, combined, transformed and condensed to leverage its value through these products to hundreds of trillions of dollars. It is a giant new oil discovery and thank God its not the only one. There are more than enough to go around for a century or two for sure.

[Tanada]

We are talking about giant oil discoveries. The North Dakota production graph is mind boggling! Just at this production rate, and we can see it is changing fast, the annual value of that crude is about 25 billion dollars. So, the resource may have a total value of 10-20 trillion or more over the next 20-30 yrs.

Thats an amazing amount of value and thats just at the wellhead. The energy and compounds found in that crude are going to be refined, combined, transformed and condensed to leverage its value through these products to hundreds of trillions of dollars. It is a giant new oil discovery and thank God its not the only one. There are more than enough to go around for a century or two for sure.

Just for the sake of argument lets say there are 80 Billion bbl/oil recoverable without the economy crashing and that they can produce it at 800,000 bbl/day.

That gives you a nice 100,000 days of production. Close to 274 years.

What's that? I got the decimal in the wrong place? Its about 8 Billion? Still sounds like an awful lot to me, 10,000 days of extraction at 800,000 per day. That's still a solid 27 years of good oil. What? That's only 1% of the daily world oil demand? But the news said we were Saudi America now and we would be exporting oil before you know it! You must be mistaken, why 800,000 bbl/day is enough for every adult in America to get uhm, err, .00286 bbl a day, that's 15 ounces of oil each for 280 million American adults! I'm sure nobody needs to use more than 3 quarters of a gallon of oil per week, right? Oh you don't say, all the fields in the USA together are producing about 7 Million bbl/day? So we can each burn just over 7 Gallons per week and be A-OK? But wait, some of that oil gets used up by the refineries in the process of turning it into the fuel we want, and making road paving and plastics and pharmaceuticals, and fertilizer...so we can each burn about 4 Gallons a week and everything will be just swell.

[SamInNebraska]

Listen to the USGS tell us how signigicant the Bakken is and what the quality of these resources are. You must remember the USGS is not in the business of guaranteeing future supplies, their charge by law is to inventory known oil and gas reserves.

Jesus Shorty, don't you even know the terminology? The USGS doesn't do reserves. It does resources. They are not interchangable terms. Technically recoverable RESOURCES. You know, like methane hydrates, they assess those to. You want to call them reserves or would you care to retract your statement?

http://gallery.usgs.gov/audio/corecast/ep183/Bakken.mp3

Takes about 3 minutes. Should answer all your questions bro about the Bakken, one of the worlds great oil discoveries!

You mean, as long as we don't compare it to the previously mentioned great hydrocarbon resources, right? Because the Bakken, it ain't in the same size class, the USGS has already said so, and unless you want to claim to know more than them and can prove it, they win credibility battles. It is their job.

[Plantagenet]

,,, as long as we don't compare it to the previously mentioned great hydrocarbon resources, right? Because the Bakken, it ain't in the same size class, the USGS has already said so

Not so.

If you listen to the USGS audio report they clearly say the 7.4 Billion bbls of oil resource in the Williston basin makes it the largest oil basin they have ever evaluated in the lower 48.

Its not only in the same size class as major conventional oil fields in the lower 48 states---its the biggest one ever evaluated by the USGS.

[SamInNebraska]

,,, as long as we don't compare it to the previously mentioned great hydrocarbon resources, right? Because the Bakken, it ain't in the same size class, the USGS has already said so

Not so.

If you listen to the USGS audio report they clearly say the 7.4 Billion bbls of oil resource in the Williston basin makes it the largest oil basin they have ever evaluated in the lower 48.

Obviously the USGS has evaluated things in the lower 48 quite a bit larger than the Bakken, perhaps the USGS personnel are not familiar with the other resources evaluated by their agency?

http://pubs.usgs.gov/fs/2012/3145/

Its not only in the same size class as major conventional oil fields in the lower 48 states---its the biggest one ever evaluated by the USGS.

Do you mean only in the lower 48? Because certainly this was evaluated by the USGS, and the Bakken? It doesn't come close.

http://pubs.usgs.gov/fs/2009/3028/

[ROCKMAN]

Just an aside to the discussion of the size of the “resource” volume: I know it’s just me personally but how large the “resource” number may or may not be isn’t too meaningful. Just another map by some goofy geologist like me. LOL Even the amount of undiscovered "reserves” isn’t of much interest. The amount of PUD (proved undeveloped) starts to get my attention since that requires a certain amount of actual offset drilling and production to occur. But I’ll usually skip past that number quickly and go to the PDP number…proved developed producing. Though the accuracy of the PDP can still be somewhat variable it’s a lot closer to a precursor of URR…ultimate recoverable reserve. In my 38 years I’ve found estimating URR from just the PDP evaluation difficult enough.

Even with a valid URR from the PDP, as someone just pointed out, the only immediate impact on the economy is bopd…bbls of oil per day. Those numbers for the Bakken and the Eagle Ford Shale has increased nicely and IMHO will continue to do so as long as oil prices stay high and new wells are drilled to replace the rapidly declining existing wells. Under those conditions the plays will continue. Until the day, of course, when most of the viable locations have been drilled.

As far as valuing those resources and even PUD numbers all I would do is respond the same to folks who have tried to ague up the value of such reserves they were trying to sell me: go drill your wells and then come show me what you got. Until then you don’t have as much value to sell me. In my experience the confidence in one’s estimate of reserves is directly proportion to how much skin they have in the game.

[Plantagenet]

...the USGS audio report they clearly say the 7.4 Billion bbls of oil resource in the Williston basin makes it the largest oil basin they have ever evaluated in the lower 48.

Obviously the USGS has evaluated things in the lower 48 quite a bit larger than the Bakken, perhaps the USGS personnel are not familiar with the other resources evaluated by their agency?

http://pubs.usgs.gov/fs/2012/3145/

Your link goes to a USGS report on the Green River oil shales. You are missing the point the Obama administration is making as to the commercial viability of the Williston and ignoring the reality that it is already producing oil---i.e. it is a viable oil resource. In contrast, the Green River deposits cannot be produced at a profit at this time and so, other than very small experimental work done there, absolutely no oil is being produced there now. You might as well link to a NASA report about hydrocarbons on Saturn.

Why not face facts? The new USGS evaluation sets the oil resource in the Williston Basin at 7.4 BILLION bbls. This is an enormous amount of oil and it can be produced with current technology. The USGS report just released by the Obama Administration ranks this area as the largest oil basin they have ever evaluated in the lower 48. Other tight shale oil deposits like the Monterey Shale (15 BILLION bbls?) and the Wolfcamp (50 BILLION bbls?) may eventually be found to be even larger---time will tell.

[SamInNebraska]

Why not face facts? The new USGS evaluation sets the oil resource in the Williston Basin at 7.4 BILLION bbls. This is an enormous amount of oil and it can be produced with current technology.

I absolutely agree with you.

The USGS report just released by the Obama Administration ranks this area as the largest oil basin they have ever evaluated in the lower 48. Other tight shale oil deposits like the Monterey Shale (15 BILLION bbls?) and the Wolfcamp (50 BILLION bbls?) may eventually be found to be even larger---time will tell.

True. But it strikes me as relevant that this idea applies only when we are talking about the rather minuscule amount of this resource in the Lower 48. Shorty was acting as though it is the largest they have ever evaluated, and obviously it isn't. But as far as the Obama administration operating on within its sphere of influence, yes, the Bakken is the largest. Today. Locally. Pretty restrictive when you think of it that way, but I can go along with it.

I do wonder why the Obama administration wanted this report out there, the only change is in another formation, they could have just let the old Bakken work stand and mandated that the Survey do something in an area more related to their campaign contributors and investors. Harold Hamm was firmly in the other camp, and his company is near the top, if not the top, of the drilling heap in North Dakota.

[Plantagenet]

I do wonder why the Obama administration wanted this report out there, the only change is in another formation, they could have just let the old Bakken work stand and mandated that the Survey do something in an area more related to their campaign contributors and investors. Harold Hamm was firmly in the other camp, and his company is near the top, if not the top, of the drilling heap in North Dakota.

Thats an interesting question.

Perhaps the release of the new report was another instance of incompetence from the Obama people--maybe someone mistakenly did something apolitical for once? Alternatively, maybe it is political. For instance, it could be part of the effort to block the Keystone XL pipeline by suggesting the imports from Canada aren't needed now because there are 7.4 Billion bbls in the Williston basin...

[C8]

Listen- none of this battling over the size of the amount of oil that has been discovered, rediscovered, relabeled, etc. really matters at all. There are 4 harsh truths that vastly overshadow the whole discussion:

1. the extraction rate of shale, etc. may be very small and not offset rapid declines elsewhere
2. the cost will increase as you go to the harder to get to or less high quality shale/sand (probably offsetting technology improvements)
3. other critical resources for production, such as water, are going to become more scarce/expensive as they are used up or droughts hit more often

but worst of all

4. even if all these hurdles were cleared- the result would be to fry the planet and render life on it for humans nearly impossible in less than 100 years

I'm sorry- but this is a complete and total cornucopian FAIL

[ROCKMAN]

P – “The USGS report just released by the Obama Administration ranks this area as the largest oil basin they have ever evaluated in the lower 48.” I guess the POTUS and the boys at the Survey don’t get out much. No, it isn’t the largest…not even a close second. According to THE authority of Texas oil&gas the Permian Basin of west Texas has produced over 29 billion bbls of oil and is estimated to contain an additional 30+ billion bbls of oil left to produce. So they’ve picked up on the 7.4 billion bo in N. Dakota but missed the 60+ billion bo in the Permian Basin. BTW the Permian Basin alone (not all of Texas including the Eagle Ford) is producing as much oil today as the entire state of N. Dakota. None of this takes the rightful shine off of ND but I think it’s nice to keep matters in perspective. Maybe because west Texas is dominated by companies J6P never heard of but it seems the MSM doesn’t know there’s a big drilling boom that been going on out there for a long time.

From: http://www.rrc.state.tx.us/permianbasin/

“The Permian Basin remains a significant oil-producing area, producing more than 270 million barrels of oil in 2010 and more than 280 million barrels in 2011. The Permian Basin has produced over 29 billion barrels of oil and 75 trillion cubic feet of gas and it is estimated by industry experts to contain recoverable oil and natural gas resources exceeding what has been produced over the last 90 years”.

This basin has produced over 29 billion bbls of oil and is currently producing 280+ million bbls of oil per year and the POTUS and the Survey haven’t noticed. Or, to not misquote them, they may have noticed it but haven’t “evaluated” it yet. Someone should tell them about the Internet. Lots of useful info there just a few clicks away. LOL.

I also guess the Survey boys were out sick the day the class covered the Gulf Coast Basin, one of the largest oil basins on the planet. According to the AAPG (http://www.aapg.org/explorer/2003/09sep/gulf.cfm) the cumulative production from just the offshore portion of the GCB is over 13 billion barrels with NG production reaching almost 154 trillion cubic feet. And for those folks who would rather believe the fed govt over the industry: According to MMS’ 2000 resource assessment of conventionally recoverable hydrocarbons in the Gulf, 65 billion barrels of oil equivalent total reserves have been produced, but 71 billion barrels of oil equivalent remain. Of course, we have to be careful since they use that sneaky “oil equivalent” BS. But that doesn’t change the fact that the GCB has already produced almost twice as much oil as they SPECULATE might be recovered from the Williston basin.

[Plantagenet]

worst of all...the result would be to fry the planet and render life on it for humans nearly impossible in less than 100 years

Yes. Quite possibly so.

But thats involves a political question thats already been discussed many times here in other threads---. As I've pointed out previously, there is no hope of stopping global greenhouse warming without a binding global treaty to reduce global CO2 emissions, and as long as Obama is president there is no prospect of a new post-Kyoto climate change treaty being negotiated. Obama killed the UN post-Kyoto treaty that was slated to be signed at Copenhagen in 2009 when he Effed up at Copenhagen and patronized China and insulted the Chinese premiere. The mess in Copenhagen also seems to have derailed the whole UN climate treaty process as there has been no movement in the last four years towards restarting the UN treaty process that Obama screwed up in Copenhagen in 2009.

Lets try to stick to the giant new oil discoveries and just discuss the topic of this thread here. THANKS!

[Plantagenet]

P – “The USGS report just released by the Obama Administration ranks this area as the largest oil basin they have ever evaluated in the lower 48.” I guess the POTUS and the boys at the Survey don’t get out much. No, it isn’t the largest…not even a close second. According to THE authority of Texas oil&gas the Permian Basin of west Texas has produced over 29 billion bbls of oil and is estimated to contain an additional 30+ billion bbls of oil left to produce. So they’ve picked up on the 7.4 billion bo in N. Dakota but missed the 60+ billion bo in the Permian Basin.

Yup.

But the two USGS women in charge of the new study were interviewed for a official guvmint media report released to the press by the DOI and they say it clear as a bell----"the largest oil basin in the lower 48."

The only thing I can figure out is that maybe they are classifying the Williston basin as one giant deposit or oil field, since the Bakken is continuous across it, while oil in the Permian basin and off the Gulf Coast is produced from a myriad of small structures and traps, and isn't continuous across the basin, so maybe they compare each small oil field there with the whole of the Williston?

My main point in this thread is there are a lot of BIG new oil discoveries happening just now. In fact, the old "peak oil" factoid that there haven't been many giant oil fields found since the 1960s seems to be breaking down---there are actually a heck of a lot new giant oil basins that fracking and horizontal drilling has suddenly made attractive these days.


The Bakken can produce right across the Williston basin, while conventional oil fields in the Permian basin are are found only where there is a local structures or stratigraphic trap.

[Econ101]

Southern Illinois is now open to shale development as the courts clear the way against peak oil politics. Google Southerin Ill oil development.

[ralfy]

Even Saudi Arabia reported a few years back that we've used only 25 pct of oil and gas underneath. At the same time, in 2009 they stated that they would easily reach 15 Mb/d by 2011. Similarly, years earlier experts believed that we would reach more than 110 Mb/d by now and oil at less than $30 a barrel.

There's your "peak oil politics".

[Econ101]

It really doesnt matter what Saudi Arabia says, it matters what they produce. They have a lot more oil, so does North Dakota. Probably close to another million barrels pumped today in the Williston Basin.

The production graph for North Dakota is straight up! Thats powerful, straight Up!!

So much shale is coming on line, is it one discovery or is it regional? We have the Williston Basin, Utah, Southern Ill, California (if peak politics doesnt prevail this will triple known reserves).

There are developments going on world wide. These are the most exciting times in history for the oil business and the millions of Americans working and producing Americas energy!! Go Baby, Drill Those shales!!!

[ROCKMAN]

Sorry P…it doesn’t come close. They used “basin”. Every petroleum geologist understands the difference between a field, a basin, a trend, etc. These are very precise and well defined designations. And the Williston Basin is a basin that contains oil in other formations besides the Bakken. And many of those billions of bbls of oil in the Permian Basin are also in resource formations. Second, there hasn’t been a new resource play or oil basin discovered in the onshore US in over 50 years. The very first NG play developed in the US (ovef 100 years ago) was the New Abany Shale...another Devonian resource play like the Marcellus Shale. The closest anyone can come is the Deep Water play in the Gulf of Mexico. But to be correct that isn’t a new basin but a new trend in the very old and established Gulf Coast Basin. As I pointed out above they were producing the Eagle Ford in the 1940’s. And the Bakken in the early 1950’…with reported production of those early vertical wells in the 300,000 to over 800,000 bbls range.

And I have no doubt that every geologist in the Survey understands the error in that statement. It really is Geology 101. But I also don’t think it’s some conspiracy. I suspect the administration just wanted to put the biggest positive spin they could on the situation. With the economy still not showing a strong recovery I’m sure they are desperate to put out as much positive verbiage as they can muster.

Every "new" discovery, be it Bakken, Eagle Ford, Monterey Shale, etc has been producing oil for decades. The increased production from the resource plays has provided a nice bump up in domestic production. But it has been driven primarily by higher oil prices. As I’ve pointed out before the industry could have been horizontally drilling and frac’ng thousands of Bakken and EFS wells in the 90’s if prices had been adequate for those plays. But in the 90’s oil prices were higher enough for a horizontal drilling and frac’ng boom in the Austin Chalk trend in Texas…a boom that matched every aspect of the current resource plays.

I think it critical for folks to understand the dynamics behind the current boom and increased oil production. The danger is their believing that there is a potential to find more “new” resources to develop. Every oil resource in the US has been identified long ago. Those economic to develop at current prices are being developed. And there are those resource plays that aren’t economic to develop at today’s prices. One day they may also boom…when prices are higher.

[Tanada]

The funny thing about 101 is they are arguing both sides of the issue.

It really doesnt matter what Saudi Arabia says, it matters what they produce. They have a lot more oil, so does North Dakota. Probably close to another million barrels pumped today in the Williston Basin.

It really doesn't matter much what anybody says, what matters is how much they can extract and how fast they can deliver it to market. If there are 2 Trillion or 5 Trillion bbl of Kerogen in the Green River Shale but you can only extract 1 Million bbl/d until it is all gone it won't even be a speed bump on the down slope. Current oil prices are keeping the economy relatively stagnant in the USA so if we are unable to meet demand at this price and the extraction costs have to rise to meet demand then demand will be further destroyed. We have already destroyed 2 Million bbl/d of USA demand, how much more can be removed from the economy before we go back into serious decline? The traveling carnivals that provide small town summer entertainment are on the verge of bankruptcy because they spend a lot on fuel and have to charge the customers to pay for it. The customers are also paying a lot more for fuel and are spending less total on entertainment. Back in the 1970's and 1980's when the oil shocks from OPEC came along a lot of carnivals and traveling circuses went out of business. The same process is squeezing the entertainment out of many aspects of American life. If it takes a long time people will adapt to doing something else, but if we fall off the plateau and unconventional oil can't fill the gap at current prices the damage will be much worse.

In our instant gratification society a lot of people think supply and demand respond instantly to their desires. That is only true when supply is both abundant and cheap. Those 3 or 5 trillion bbl of Kerogen are certainly abundant, but they are also expensive and time consuming to extract. It is like the story of the trial on the patent for the first rotary oil drill bit. When the competitors claimed that the patent made it impossible for them to extract oil the patent holders pointed out that mineral extraction was a form of mining and they could tunnel down to the oil bearing rock just like the coal companies did to extract coal. The logic was good enough for the judge and the patent was upheld.

Sure, we could mine our way down to the old shallow oil fields source rock and extract more oil from it by physically processing the rock like the Bitumen (tar) sands do in Alberta, but how much would it cost? Even worse, how much could we ultimately recover?

[ralfy]

It really doesnt matter what Saudi Arabia says, it matters what they produce. They have a lot more oil, so does North Dakota. Probably close to another million barrels pumped today in the Williston Basin.

The production graph for North Dakota is straight up! Thats powerful, straight Up!!

So much shale is coming on line, is it one discovery or is it regional? We have the Williston Basin, Utah, Southern Ill, California (if peak politics doesnt prevail this will triple known reserves).

There are developments going on world wide. These are the most exciting times in history for the oil business and the millions of Americans working and producing Americas energy!! Go Baby, Drill Those shales!!!

Actually, it's not "what they produce" but how much. And "what they produce" is not the same as "a lot of oil."

In which case, it's not just "straight up" that you should look at but whether or not it will meet demand.

And don't forget decline curves. For example,

http://www.slate.com/articles/health_an ... dance.html

[Plantagenet]

Any oil discovery involving more than 500 million barrels of oil is considered a "giant" oil field.

Clearly there are many "new" giant oil fields being discovered right now, given the billions and billions of bbls of oil now available through fracking.