Lenny Behm, Published June 06 2013
Letter: The long view of ND oilNorth Dakota’s boom is no longer a secret. From east to west, the state is filled with great opportunities to build careers and families. Amongst our flourishing economy, the energy industry has the clear lead in growth.
While many may speculate on the length of the boom, its continued growth was given greater confirmation recently by the U.S. Geological Survey. The agency’s report doubled its outlook for the Williston Basin, citing nearly
7 billion barrels of crude oil equivalent recoverable over the next three decades. Their findings support the expectations of many around the industry that the state is only at the cusp of developing our nation’s energy supply. As drilling and exploration continues, North Dakota will see well counts increase from 8,000 today to possibly 40,000 to 50,000 over the coming decades, with 1.5 to 3 people permanently employed per well.
In fact, estimates given by the USGS are among the most conservative of the industry. The USGS measured only the Bakken and Upper Three Forks, disregarding additional proven productive formations that exist both above and below the Bakken that continue to show promise. Computing the value of these geologic formations greatly expands our recoverable resources. North Dakota’s state regulatory agency estimates more than 11 billion barrels of recoverable crude oil equivalents. Continental Resources, the state’s largest oil producer, estimates the figure at an astounding 24 billion barrels. Furthermore, each estimate is based on current technology and extraction techniques, which recover only about 10 percent of the state’s underground reserves.
According to the Energy and Environmental Research Center at the University of North Dakota, if better industry technology boosts recovery by just 1 percent, additional oil production will total $150 billion, likely returning an additional $13.5 billion to the state in production and extraction taxes and $4.8 billion in wages. We must remember that the current technology utilized for drilling in the Bakken did not exist in practical form less than 10 years ago. By perfecting current techniques, as well as developing new ones, such as the EERC’s research to increase recoverable oil by injecting carbon dioxide from North Dakota’s coal plants into wells, the industry will almost assuredly improve its ability to recover reserves above the 10 percent it achieves today.
Whenever more resources are proved and recoverable, a cost/benefit analysis justifies additional investment into North Dakota’s energy industry for exploration and drilling activity, which in turn builds employment opportunities in and out of the industry. At the same time, investment in pipelines for gathering and transporting crude oil and gas are better supported over the long term. In coming years, the energy industry in our state will invest billions of dollars in pipeline infrastructure that will reduce flaring, safely transporting our crude to facilities from coast to coast and decrease the number of trucks from our roads, improving traffic safety along our busy highways.
The USGS study and the potential for greater recovery is not just important for the industry but for the growth in quality of life for our state’s existing and future residents. By again demonstrating the long-term play of the Williston Basin, investors and small businesses are reassured that the investment they make today will be effective for decades to come. Their dollars are not made to capture a short-term boom but instead for the long-term growth of North Dakota.
We are just beginning to build North Dakota with new families, healthy careers and vibrant communities. The USGS survey is confirmation of the bright future ahead.
Behm is president of Behm Energy, Minot, N.D.