Billions of gallons of oil in North Dakota, Montana- Geological Survey calls find largest reserves outside Alaska

Let's get it ! There is no substitute for American oil !

By Jerome R. Corsi
© 2008 WorldNetDaily

A shale formation stretching North Dakota and Montana may have an estimated 3 to 4.3 billion barrels of technically recoverable oil, according to a U.S. Geological Survey assessment.

Known as the Bakken Formation, the find would make the recoverable oil in North Dakota and Montana the largest U.S. oil reserves outside Alaska.

Map of Bakken Formation in northern United States, courtesy Grand Forks Herald

The recently released assessment shows a 2,800 percent, or 28-times increase in the amount of oil recoverable from the Bakken Formation, compared to the agency's 1995 estimate of 151 million barrels of oil.

According to the USGS, the dramatically increased estimate of recoverable oil in the Bakken Formation results from new geological models, advances in drilling and production technologies, and recent oil discoveries.

By the end of 2007, approximately 105 million barrels of oil had been produced from the Bakken Formation.

"The Bakken Formation estimate is larger than all other current USGS oil assessments of the lower 48 states and is the largest 'continuous' oil accumulation ever assessed by the USGS," said a news release making the announcement.
The Bakken Formation lies in "Williston Basin," a geological formation in the north central U.S., underlying much of North Dakota, eastern Montana, northwestern South Dakota, and southern Saskatchewan and Manitoba, Canada, according to the Energy Information Administration of the U.S. Department of Energy.

The EIA says the success of horizontal drilling and fracturing efforts in Montana is the reason a decision was made to re-evaluate the 1995 USGS Assessment of Resources that had estimated only 151 million barrels were technically recoverable from the Bakken Formation.

Lynn Helms, director of the oil and gas division of North Dakota's Industrial Commission told the Grand Forks Herald the USGS announcement had prompted new interest from investment bankers and the oil in

"We have had contacts from Scotland and Australia today," Helms told the newspaper. "And of course, lots of Canadian interest, and contacts from across the United States, both from the media and the oil industry. And banks. I think they are looking for a place to invest venture capital."

The USGS announcement should give "a significant boost to North Dakota's already-booming oil industry," according to a news release from the office of North Dakota's Democratic Sen. Byron Dorgan.

"The oil industry in North Dakota has already seen substantial growth," Dorgan said, "but this report is important, because it gives oil companies another set of eyes."

"The Bakken Shale should attract significant new investment to this region," he continued. "This is an exciting time for North Dakota's oil industry. We're going to see new growth that will boost our economy and help our country shed its dependence on foreign oil."

The USGS report increasing the estimate of oil recoverable from the Bakken Formation supports the arguments of Shell Oil's president of U.S. operations, John Hofmeister, who has recently questioned the validity of the assumptions behind "peak oil."

As WND reported last month, Hofmeister told CNBC's national Squawk Box morning show audience that peak oil theorists, such as Matt Simmons, have dramatically underestimated the amount of non-conventional oil economically recoverable with oil prices hovering at $100 a barrel.

WND also reported that Simmons, a Houston-based oil industry investment banker, also appeared on CNBC's Squawk Box show to defend his peak oil position, arguing that diminishing oil flow is an irreversible worldwide "grim reality," regardless what new oil resources are discovered.

Peak oil theorists maintain that oil is a finite resource and analysis of depleting oil fields demonstrates the world has either already reached or is nearing maximum oil flow.

Non-conventional oil reserves include a variety of oil reserves, including the oil tars in Alberta, Canada, which present technology allows to be converted economically into oil through well understood synthetic chemical processes.

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... creates opportunity to exploit expensive deposits. That's the sum and substance of this report. The extended truth is that the price of oil has reached a permanent band. It will never be lower than our current price range. $2 is probably the new floor.

What will happen is that the oil companies will gear up to exploit expensive deposits. Short-term gluts will drive the price down, but overall the price will continue to rise since Peak Oil for the world is certainly here. Some wells with lessening pressure will probably be capped as future reserves, which will provide the oil companies better control on price (i.e. keep it higher when demand falls). More wells will be summarily capped once some executive with a spreadsheet figures out that cheap producer wells can be reserved for times of lesser oil price. While the oil price is high, you may as well work out your expensive deposits.

Does it not make sense to keep our oil supply on 'reserve' for the day we may really, really need it? Rather than using it up now? I would think it'd make sense to not drill in Alaska & Montana - makes more sense to me to hang onto it as long as we can. I don't know much about it, but I can't imagine there's as much oil to be had in our country as there is in the Middle East.

Reserve? Who needs a stinking reserve?

I’m almost for letting Big Oil/Republicans drill anywhere they want, so they can stop bitching about that being a reason that oil is so high.

Of coarse then they’ll keep bitching about how environmentalists are keeping Big Oil from building refineries in such liberal bastions as Texas, Oklahoma and Wyoming.

Oil prices are what they are because we have a President who has weekend us, our currency and gone to bed with dictators and despots.

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