Unlike an automobile, it is not easy to know how much oil is in the Bakken formation, much less any other oil field. They do not come with dipsticks or fuel gauges that tell us how much petroleum is in the tank. Every estimate is actually a guess that is dependent on a number of factors. Technology plays a big part in those estimates.
What is counted as recoverable oil using today’s technology is a significantly different figure from estimates that were calculated on the same field even a few years ago. No doubt, future estimates will also rise as more efficient methods of extraction move off the drawing board and into the field of operations. For example, the 1997 USGS estimate of recoverable oil in the Bakken Formation was pegged at a lowly 151 million barrels. The 2008 report shows a leap to 3-4 billion barrels even after 105 million barrels had already been pumped out. Yet these estimates all depend on technology in place.
The actual amount of oil in the vast Bakken Formation, which stretches across much of North Dakota as well as part of Montana, South Dakota and the Canadian province of Saskatchewan, was originally estimated in 1974 at 10 billion barrels. This figure then rose to 132 billion barrels in 1983 and peaked with the incomplete Leigh Price studies of 1999 that ranged from 267 to about 500 billion barrels of oil. The current North Dakota Geological Survey puts that state’s portion at approximately 167 billion barrels. This vast number matches the figures of the high end estimates of the Price survey, which was once considered by some skeptics to be almost preposterous in its rosy assumptions.
What hampers any hard and fast assessment of the amount of oil in the Bakken formation is not the large amount of oil now believed to be there, but in how feasible extraction is. The USGS rather conservatively estimated a 1% recovery rate that led to its 3-4 billion barrel figure. Most private industry operators now believe this figure to be grossly understated due to increased discoveries and advances in recovery technology.
The figure of 24 billion barrels is increasingly used as a baseline assumption but has not yet been adopted by any official government organization. By way of comparison, the Ghawar Field in Saudi Arabia is the world’s largest and contains an estimated 70 billion barrels in remaining reserves. New discoveries off the coast of Brazil contain an estimated 30 billion barrels of recoverable oil.
With so much riding on development of the Bakken Field and so little agreement on what is actually contained in its underground shale formations, a new USGS survey began with the 2012 fiscal year in October of 2011. This effort will take approximately two years to complete, which means that a lot of development will go forward using unofficial figures and leave the US Geological Survey playing catch-up.
What makes these calculations so important is the potential effect on world petroleum markets. Saudi Arabia and Venezuela each currently claim the largest amount of recoverable petroleum reserves in the neighborhood of about 280-290 billion barrels. Assuming the Bakken Formation deposits can be extracted at the 50 percent rate once claimed by the now deceased Doctor Price, that will amount to another 200-250 billion barrels. If it comes in at the 3 to 10 percent ratio currently assumed by the state of North Dakota, then the Bakken becomes a large, but hardly world altering, event.
But the real question may not be how much oil is in the Bakken Formation? Instead, the Bakken may be of even more value as a research and development laboratory that will set free the trillions of barrels of oil equivalents in areas such as the vast Overthrust belt of Colorado, Wyoming and Utah. There are almost certainly several trillion dollars’ worth of oil hiding underneath the Peace Garden State, but the technological race to break these resources free from their reluctant rock formations will generate the knowledge necessary to tackle even larger and more challenging projects elsewhere in North America. The future is only beginning.