Bakken Formation Archives - Shopfloor

Gov. Perry: $100 a Barrel Oil? Think about $200, $300

By | Energy | 2 Comments

The uncertain situation in the Middle East could send world oil prices to $200 or $300 a barrel even as the Obama Administration fails to promote domestic energy development, Gov. Rick Perry (R-TX) warned today.

Gov. Perry spoke to bloggers at a briefing in Washington, D.C., this morning. (Present were Rob Bluey of the Heritage Foundation, Jen Rubin of The Washington Post, and your Shopfloor.org correspondent.) The governor, who is chairman of the Republican Governors Association, is in town for the winter meeting of the National Governors Association.

In light of oil crossing the $100 a barrel price this week, we asked about the Obama Administration’s policies and attitudes toward development of domestic energy. The governor responded:

Gov. Rick Perry

Putting America’s future at jeopardy by basically hand-cuffing ourselves because of our lack of focus on domestic energy policy I think is devastating to the future.You said hundred-plus-dollar-a-barrel oil. Yes. That’s today. It certainly could go to $200 or even $300 a barrel if the situations in the Middle East – Libya, into Syria, Jordan, Iraq, Iran, Saudi Arabia, Yemen all of those countries – if we’re to see continued deterioration of peaceful conducting of business in the drilling and transportation of oil….

I don’t think it’s out of the reach of possibility to see oil even twice or three times what it is today –- devastating to the world economy.

America really needs to get on, and this Administration needs to respect that we can drill safely, cleanly, and get America independent.

Gov. Perry made those comments after citing the technological advances that have made U.S. oil and gas resources far more attainable than in the past. He named examples: the Bakken Formation in the Dakotas and Montana, the Barnett Shale natural gas formation in Texas, Marcellus Shale, and the Eagle Ford shale formation in South Texas.

I share those with you to say the United States has oil and gas reserves that can take us years and years and years into the future without being held hostage by these countries that in many cases don’t care for us all at all, at all. This Administration, with that knowledge, is making decisions that are limiting our ability to discover and produce more of those energy resources in the United States. Read More

Manufacturing in the State of the State Addresses: North Dakota

By | Economy, Energy, Technology | No Comments

January is the month for governors to deliver State of the State addresses, and again this year we’ll highlight the sections of their speeches that discuss manufacturing.

While new governors have already delivered their inaugural addresses, the first State of the State speech we find comes from North Dakota Gov. Jack Dalrymple, who was sworn in last month to the office as Gov. John Hoeven resigned to take a seat in the U.S. Senate.

Unlike other states, North Dakota faces no budget crisis — unless you count the potential of overspending as a crisis — thanks largely to the amazing oil and gas boom from development of the Bakken Formation (and high agricultural commodity prices). Economic growth and a 3.8 percent unemployment rate make for more positive rhetoric than we’re likely to see from, for example, in today’s speech from New York Gov. Andrew Cuomo.

Dalrymple acknowledged energy’s important contributions in his speech, delivered Tuesday to a joint session of the North Dakota Legislature in Bismarck.

The energy industry has long provided a major opportunity for job growth.  To foster that growth, we have promoted the development of all forms of energy, traditional and renewable. For instance, in the oil and gas industry we facilitated a dramatic expansion in transportation infrastructure.  By expanding our pipelines and rail transportation, we’ve doubled capacity from 230,000 barrels of oil per day in 2007 to nearly 460,000 barrels in 2010.  This obviously is a critical element in expanding the job opportunities in the energy industry.

Jim Arthaud saw opportunity in our growing oil and gas industry. He and other family members established Missouri Basin Well Service with one truck in 1979.  Today, the oilfield logistics company is the largest private employer in Stark County with 500 employees, 130 contract workers, 200 company trucks and 150 leased trucks. Their company transports oil, sand, water and other oilfield products throughout western North Dakota.  When we talk about developing the energy industry for North Dakota, we’re talking about entrepreneurs like Jim Arthaud and his family.  Jim, please stand so we can thank you for all those jobs.

Dalrymple, a Republican, also discussed the state’s emphasis on technology, tourism, and value-added agriculture as target industries. The other, advanced manufacturing, is sought because “here state-of-the-art equipment provides not only greater efficiency but also higher-paying jobs that require advanced skills learned in North Dakota.”

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Bakken Formation: If Only Government Doesn’t Mess It Up

By | Energy | One Comment

From PlainsDaily.com, “Oil CEO Says That Oil Development Will Continue For Decades,” reporting an interview with Harold Hamm, president and CEO of Continental Resources. There’s 25 years worth of potential in the Bakken Formation, he says.

Continental Resources has completed a study of the North Dakota oil patch and concluded that it is one of the largest if not the largest oil deposit in the country.  Hamm spoke with Scott Hennen and said that there is a major difference between today’s oil development and the past “we have a different driver.  The driver used to be the price of crude oil.  Now we have a new driver and that is the potential for development.” 

Hamm says that as long as his company can stay above $60 per barrel Continental Resources will continue to develop the play in western North Dakota.  The one thing that could slow that investment is “government.”  Hamm says that taxes and regulation that is currently been considered by various parts of the government such as the EPA or DOE and Congress could repress the investment in oil development.

In August, the newspapers of Forum Communications ran a multipart series on oil development in North Dakota, which has soared since seismic exploration, directional drilling and hydrofracturing made it profitable to access the Bakken Formation deposits. The series is “Running with Oil.”

(Hat tip: Rob Port.)

In North Dakota, a New Senator, John Hoeven, Who Supports Energy

By | Energy, Miscellaneous | 2 Comments

Gov. John Hoeven (R-ND) has already been declared the winner in the U.S. Senate race to succeed Sen. Byron Dorgan (D-ND). His victory represents a monumental shift in the North Dakota political landscape, as he becomes the first Republican to serve in the U.S. Senate from the state since Sen. Mark Andrews lost election in 1986.

Your blogger worked as press secretary on Hoeven’s first campaign for governor in 2000, and he’s the most focused candidate and elected official we’ve ever encountered. Good thing for North Dakota and now the U.S. Senate, he’s focused on jobs, business and economic growth.

As governor, Hoeven has fostered a regulatory and business climate that embraced comprehensive energy development, including wind and biofuels, but especially the incredible oil boom that industry has created by  accessing the Bakken Formation. As The New York Times put it, “Hoeven’s win would also give the state’s booming oil and gas industry an adamant advocate in Washington.”

That’s the kind of advocate the entire nation needs.

Wind is Good, Oil is Good

By | Energy | No Comments

President Obama traveled to the Midwest this week, highlighting non-fossil fuel energy projects along the way. He stopped Tuesday at the Siemens Wind Turbine Blade Manufacturing Plant in Fort Madison, Iowa. On Wednesday, he visited the POET Biorefining plant in Macon, Mo.

Great. The more energy and the more varied energy sources, the better.

In the President’s effort to highlight hotbeds of energy innovation and expansion, we hope the next place he heads to is the Williston Basin in North Dakota. The advances in seismic exploration, hydrofracturing and directional drilling have added billions of barrels of oil to America’s energy resources.

From AP, “New oil reservoir rivals rich Bakken formation; ND recoverable oil reserves nearly double“:

BISMARCK, N.D. (AP) – An oil reservoir in western North Dakota holds nearly as much recoverable crude as the rich Bakken shale formation above it, a new state study shows.

The study released Thursday by North Dakota’s Industrial Commission said current technology could lead to the recovery of about 1.9 billion barrels in the Three Forks-Sanish formation.

Interest is running high. From The Bismarck Tribune, “Oil conference blows doors off previous numbers“:

Ron Ness, director of the North Dakota Petroleum Council, estimates there’ll be 2,500 people at the 18th annual Williston Basin Petroleum Conference and Expo, nearly twice as many as attended in 2008, the last year it was held in North Dakota.

The buzz is all about the Bakken formation — blowing the door off production records for North Dakota — and Ness said the conference has morphed into a business development opportunity for everything from gravel hauling companies from eastern North Dakota, to investment and banking representatives..

“People are looking for ways to enter into the Bakken and become part of the economic opportunity,” Ness said. “The conference is shaping up to be the biggest oil event north of Houston.”

The conference website is here. Good agenda, too. Bismarck can be beautiful the first week in May.

Northwestern North Dakota is the center of the Bakken formation work, the Williston Basin spreads far and wide. Speakers are also coming from Montana, Saskatchewan, Manitoba, and South Dakota.

Public Increasingly Favors Energy Development

By | Energy | No Comments

From Gallup, the polling outfit, “Americans Prioritize Energy Over Environment for First Time“:

PRINCETON, NJ — Americans are more likely to say the U.S. should prioritize development of energy supplies than to say it should prioritize protecting the environment, the first time more have favored energy production over environmental protection in this question’s 10-year history.

One reason for the trend, or so we would speculate, is that claims about a “green economy” creating millions of new “green jobs” have failed to live up to the promises. When unemployment is still stuck above 9 percent …


The current data represent a continuing shift in opinion toward energy production. Since 2007, when Americans’ preferences for environmental protection were the greatest (58% to 34%), Americans’ opinions have shown significant movement each year in the direction of prioritizing energy production. This change has been evident among nearly every major demographic subgroup, although self-identified liberals have remained relatively steadfast in saying the environment should be a higher priority

And just to make the point from the real world of the North Dakota Oil Patch, the Oil & Gas Journal reports, “Bakken well yields oil, gas at record rate“:

HOUSTON, Apr. 5 — A long horizontal well completed in the Bakken formation has produced oil and gas at an early 24-hr peak flow back rate, said Brigham Exploration Co., Austin.

Rate was 4,335 b/d of oil and 4.79 MMcfd of gas at the Sorenson 29-32 1H, for a combined rate of 5,133 boe/d. That rate represents an apparent record production level for the more than 2,700 horizontal wells in the Williston basin based on publicly reported date, the company said.

Rockin’ the Bakken: The Grand Success of Domestic Energy

By | Economy, Energy | One Comment

Shopfloor.org has posted often on the development of the Bakken Formation’s oil in North Dakota, Montana and the Prairie Provinces because it’s such a huge economic success story. The profitable development despite the depth (2 miles) of the shale formation testifies to the importance of new technology — advanced seismic exploration, hydrofracturing and directional drilling — and reaffirms the economic impact of domestic oil development.

The Wall Street Journal today reiterates these points with a well-done piece, “Oil Industry Booms — in North Dakota.” Excerpt:

The Bakken Shale deposit has been known and even tapped on occasion for decades. But technological improvements in the past two years have taken what was once a small, marginally profitable field and turned it into one of the fastest-growing oil-producing areas in the U.S.

The Bakken Shale had helped North Dakota oil production double in the past three years, surging to 80 million barrels in 2009—tiny relative to the more than seven billion barrels consumed by the U.S. every year, but enough to vault the state past Oklahoma and Louisiana to become the country’s fourth-biggest oil producer, after Texas, Alaska and California. If current projections hold, North Dakota’s oil production could pass Alaska’s by the end of the decade.

The Journal reports that the oil now pays off when prices hit $50 a barrel, down from $80.

Thanks largely to the oil boom, North Dakota’s economy has fought off the recession. The state’s unemployment rate in December was 4.3 percent.

Labor shortages are the inevitable downside. The Williston Area Development Foundation in northwestern North Dakota has a website set up to attract potential employees, RockintheBakken.com. There’s a jobs fair in Williston Thursday for people who hold commercial drivers licenses.

It’s trouble other states would love to have. The first step to get there: Regard domestic energy development as a boon, not a bane.

Schedule Next Jobs Forum Where They’re Drilling for Natural Gas

By | Economy, Energy | No Comments

NBC Nightly News on Sunday ran a segment on the thousands available jobs in Bismarck and the rest of North Dakota, attracting out-of-state residents for jobs in health care, IT, energy, manufacturing and construction.

Energy has driven economic growth in the state, thanks to coal and, since earlier this decade, oil and gas development from the Bakken formation. An e-mailer — not me — expounded on NBC’s misdirected coverage today at National Review’s The Corner blog:

I think it would be important to point out to everyone, that ND’s job growth is fueled by the oil boom in that state from the Bakken shale formation. The video ignores that fact because it doesn’t fit the MSM’s sense of justice to grow our economy by doing something evil like developing our natural resources.

A hundred-year supply of natural gas has just been discovered in the last couple of years in the Marcellus Shale which underlies much of PA, NY and to a lesser extent other eastern states. If these states are open to the development of the natural gas like ND has been to the oil, they could enjoy the same economic situation. Unfortunately for the laid-off blue collar workers from those industrial states, the elitist environmental-minded politicians and ngo’s will likely block the potential economic boom.

To drill and produce the natural gas you need, drill rig hands, welders, electricians, road builders, general construction crews, engineers, petroleum geologists, environmental scientists (to do it cleanly), regulators (to make sure it is done cleanly), truck drivers, accountants, bankers and more. In addition to all those directly employed by an oil and gas boom, add all the support services those new people to an area need. Oil or gas booms can literally be like gold rushes of Western lore.

We don’t think the anti-energy forces will win in the end, but they’re definitely trying with the usual fear and falsehoods.

The Pittsburgh Post-Gazette covered the Marcellus Shale’s potential in a major Sunday business piece, “Natural gas locked in the Marcellus Shale has companies rushing to cash in on possibilities“:

According to a report released in July by Penn State’s College of Earth and Mineral Sciences, the Marcellus Shale helped create more than 29,000 new jobs in Pennsylvania in 2008. Of those, about 14,000 were directly related to Marcellus development. The remainder were created by what the study calls “indirect and induced impacts,” such as a restaurant near a drilling site hiring more staff because it is serving a larger lunchtime crowd.

The study predicts more than a decade of dramatic growth, with more than 48,000 new jobs this year, then another 98,000 in 2010.

By 2020, the study says, Marcellus development could add $13.5 billion to the state’s economy and create more than 176,000 new jobs in a single year.

NAM President John Engler is expected to talk about new natural gas developments in remarks tomorrow at the State Chamber of Oklahoma’s public affairs conference. Oklahoma is home to the Woodford Shale deposit.

The natural gas industry group, Energy in Depth, has lots more information on shale gas at its website, www.energyindepth.org.

UPDATE (2:45 p.m.): Now that you’re considering a move to Bismarck, take a look at Bismarck Tribune’s excellent website. Most popular stories:

  • Stray cow shot after disrupting bridge traffic
  • Wishek homeowner told to remove wind turbine says he’ll fight city hall
  • Mountain lion shot in Bismarck
  • It’s about 0 degrees there at the moment, but the big Midwestern storm passed it by.

    From Bismarck, Words of Praise and Potential for Fossil Fuels

    By | Energy, Global Warming, Health Care | No Comments

    Speaking at the Great Plains Energy Expo and Showcase in Bismarck, N.D., on Monday, Secretary of Interior Ken Salazar:

    I don’t want you to be scared, those of you here who are supportive of coal and oil and natural gas…The fact remains that oil, gas and coal are a very important part of our energy portfolio and will remain a part of the energy portfolio in the future.

    That’s from The Bismarck Tribune’s story, “Salazar says N.D. coal is part of U.S. energy future.” The quote doesn’t appear in the Secretary’s prepared text.

    The keynote speaker at the expo sponsored by Sen. Byron Dorgan (D-ND) was Harold Hamm, chairman and CEO of Continental Resources, an independent oil company heavily invested in North Dakota. From AP:

    BISMARCK, N.D. (AP) — Billionaire Enid oilman Harold Hamm said Monday North Dakota’s oil reserves could be double the federal government’s estimates….Hamm said U.S. Geological Survey’s estimate of 4.2 billion barrels of oil in the Bakken shale formation could be “100 percent off.”

    “I think we’re going to be twice that,” said Hamm, chairman and chief executive officer of Continental Resources, an independent oil and gas company based in Enid. His company was one of the first to tap the Bakken formation in North Dakota’s oil patch 20 years ago. Hamm also said the underlying Three Forks-Sanish formation could hold as much oil as the Bakken.

    The Bakken Formation is a shale formation, the crude oil of which has become available through advances in seismic exploration, directional drilling and hydrofracturing. Its development has pushed North Dakota into a new status as the fourth most productive oil state in the country, surpassing Louisiana.

    See also Forbes, “Billionaire Harold Hamm’s New Play“: “Oklahoma billionaire Harold Hamm is rushing back into the North Dakota Bakken with an ambitious new drilling program after pulling back from the oil shale just a year ago.”

    Where There Are Jobs for the Taking…And Where There Are Not

    By | Economy, Energy, Taxation | No Comments

    From Marketplace, the public radio business show, a report, “Need a job? North Dakota is calling“:

    DAN BOBKOFF: Here in Ohio, the recession has only added to the woes of foreclosures and plant closings. It can be a little depressing.

    So when I called up Shane Goettle, who heads the North Dakota Department of Commerce, it was a bit like stepping into bizarro world.

    SHANE GOETTLE: Overall our unemployment rate is 4.2 for June. We’ve had real good strength in energy, agriculture. Tourism has actually been good for us.

    And then, there’s this:

    GOETTLE: We have thousands of jobs available in the state. As of July 1, there are about 9,000 openings.

    Good story in that it doesn’t engage in the usual belittling of the state, albeit mentioning the cold winters. (And in that it quotes our friend, Shane.)

    The report also correctly attributes much of North Dakota’s good fortune to the high prices of energy and agriculture commodities, which topped out in 2008. (The wheat market is bearish.) But North Dakota — and the rest of the country — would not have been in position to take advantage of the soaring oil prices if it hadn’t been for technological advances in the area of seismic exploration, horizontal drilling and hydrofracturing — making the Bakken Formation — profitable to develop. So thanks oil industry!

    Speaking of Bizzaro worlds, here’s Michael Barone’s column in The Washington Examiner, “Michigan Madness.”

    Ordinarily a pretty savvy political operator, [Democratic Party Chairman Mark Brewer] is now suggesting five ballot propositions for the 2010 ballot. Their aim apparently is to improve the lot of Michigan citizens. But the result, as anyone with an iota of sense can see, would be to inflict horrifying damage on an already staggering state economy. They include:

    • Mandating all employers to provide affordable health care for all their employees and dependents or pay a penalty.
    • Raising the minimum wage from $7.40 per hour to $10 per hour and covering all workers with no exceptions.
    • Increasing unemployment benefits by $100 a week, making all workers eligible and adding six months to the time one can receive benefits.
    • Cutting utility rates by 20%.
    • Imposing a one-year moratorium on home foreclosures.

    Why not raise the minimum wage to $100 an hour, Barone asks?

    (Hat tip, Instapundit, who also links to The Hill’s story on the NAM/ACCF study about Waxman-Markey.)