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.

When Daniel Yergin writes about historic development in energy production, one pays attention. In today’s Wall Street Journal, joined by his colleague Robert Ineson, Yergin examines the rise of natural gas production in the United States made possible by technological advances that open up vast shale deposits to exploitation. From “America’s Natural Gas Revolution“:

The biggest energy innovation of the decade is natural gas—more specifically what is called “unconventional” natural gas. Some call it a revolution.

Yet the natural gas revolution has unfolded with no great fanfare, no grand opening ceremony, no ribbon cutting. It just crept up. In 1990, unconventional gas—from shales, coal-bed methane and so-called “tight” formations—was about 10% of total U.S. production. Today it is around 40%, and growing fast, with shale gas by far the biggest part.

The potential of this “shale gale” only really became clear around 2007. In Washington, D.C., the discovery has come later—only in the last few months.

Making this development possible has been hydrofracturing, or fraccing, the technique of injecting pressurized liquids into the strata to fracture the shale and free the gas. (See Shopfloor.org’s previous posts on the topic.) The potential of this gas development is especially important economically to northeastern states — and industry — because the Marcellus Shale is close to markets in New York, Pennsylvania and other heavy energy consuming areas.

Earlier in the decade, natural gas prices soared as demand grew, spiking as Hurricane Katrina disrupted supplies. Price and price volatility were big factors in driving natural-gas consuming industries like fertilizer and chemical manufacturing overseas, but now…well, there’s reason for optimism.

Except, as the authors note:

[Industrial] users and the utilities with their long investment horizons—both of which have been whipsawed by recurrent cycles of shortage and surplus in natural gas over several decades—are inherently skeptical and will require further confirmation of a sustained shale gale before committing.

Skepticism also arises because of the growing environmentalist/NIMBY alliance dedicated to regulating hydrofraccing into submission, with the activist journalism outfit, ProPublica.org, serving as the movement’s house organ. States now regulate this aspect of drilling, and the regulators stand by the quality and safety of their oversight. (See the Interstate Oil and Gas Compact Commission for details.)

But federal regulation is always superior to state regulation, right? That at least is the theory of sponsors of bills – H.R. 2766 and S.1215 — to bring hydrofraccing under the Clean Water Act authority, even though as Yergin and Ineson note, shale strata lie much, much deeper than watersheds. Today, the predictable New York Times adds its support for the bills in an editorial, “The Halliburton Loophole.”

State regulation is not a “loophole,” and even invoking the bugaboo of Halliburton does not make it one.

History tells us the real goal, at least for the environmentalists, behind legislation to impose a Clean Water Act regime over hydrofracturing is project-halting litigation. So you can understand industry’s skepticism.

More…

• Houston Chronicle, “Louisiana shale could change fate of U.S. energy supply“
• Houston Chronicle, “Shale gas is producing jobs, stimulating the economy“
• Natural gas producers group, EnergyInDepth

From the Regina Leader-Post, a wonderful story and headline, “Striking it rich.”

REGINA — Saskatchewan pulled in $242.7 million from the August sale of Crown petroleum and natural gas rights, adding to the province’s already record-smashing 2008.

Monday’s sale was the second-best single land sale ever, bringing the year-to-date revenue from land sales to a record $848.1 million, according to figures released Thursday.

Nearly 90 percent of the August sales came from the Weyburn-Estevan area across the North Dakota border, site of the Bakken oil play.

Meanwhile, Saskatchewan is also starting development of the province’s oil sands.

More from the Globe and Mail:

VANCOUVER — British Columbia and Saskatchewan raked in a combined haul of $745-million in land rights yesterday, strengthening their claims as the hottest exploration zones in the country and edging Alberta into third place.

While Alberta, anchored by the oil sands, remains Canada’s energy king, the province is being left behind as companies race to open new oil and natural gas frontiers. For the first time, it looks like Alberta will not take in the most money this year for new exploration rights and may actually finish third behind Saskatchewan.

An ascendant Saskatchewan represents quite an economic, social and political change for Canada.