Largest Oil Reserve May Lie Under Northern Plains
NY Times
Published: April 11, 2008

An area of shale and other rock in North Dakota and Montana is estimated to hold the largest potential oil resources in the 48 contiguous states, according to an assessment released Thursday by the United States Geological Survey.

The area, known as the Bakken Formation, might contain 3 billion to 4.3 billion barrels of oil that could be extracted using current technology, the survey said.

The United States had an estimated 21 billion barrels of proven oil reserves in 2006, according to the Energy Department. The new assessment by the Geological Survey could raise these reserves once drilling starts.

The survey reinforces what oil companies who have flocked to the region already knew: a boom is afoot. But geologists and industry officials alike cautioned that the number was simply an estimate, easily skewed higher or lower by technological advances or economic changes. If the price of oil drops, companies will not be willing to spend as much to extract it, and the Bakken Formation, which also extends into Canada, requires an expensive technique called horizontal drilling.

"Just because a study says this amount is potentially recoverable doesn't mean that this is what we're going to recover," said Ron Ness, president of the North Dakota Petroleum Council. "The technology might change, and we recover twice as much. The economics might change, and we recover a third as much."

The new estimate covers undiscovered, technically recoverable oil resources, which it defines as those "producible using currently available technology and industry practices." That definition is one notch below the "proven" oil reserve category.

Senator Byron L. Dorgan, Democrat of North Dakota and the person who requested the survey, said the oil resources should attract more investment to his state and make the United States "marginally" less dependent on foreign oil.

"The technology always improves and advances," Mr. Dorgan said, "so there's probably much more recoverable in the future."

The United States uses about seven billion barrels of oil a year.

The survey reveals a 25-fold increase from the last United States Geological Survey assessment of the Bakken Formation in 1995, which estimated that 151 million barrels could be extracted. Richard M. Pollastro, a research geologist with the agency who led the assessment, attributed the change to advances in drilling technology and an improved understanding of the formation's geology.

With oil prices rising above $110 a barrel on the New York Mercantile Exchange this week, unconventional resources like shale rock are becoming more profitable to develop.

The Bakken Formation is the largest oil resource ever assessed by the agency in which the oil is dispersed throughout the rock instead of sitting in separate places. Known as "continuous" oil accumulation, this type of distribution makes the oil harder and more expensive to extract.

Mr. Pollastro estimates that it would take tens of thousands of wells to extract the oil.

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