Bakken Produces Over One Billion barrels Of Crude Oil
Bakken surpasses one billion barrels of oil produced
Over one billion barrels of oil have now been produced from the Bakken Region, according to IHS Inc.
This is truly an incredible accomplishment for the oil and gas industry considering it was not too many years ago, oil and gas companies were struggling to keep pace with current rates of production and reliance on foreign sources of energy were increasing.
The Energy Information Administration (EIA) estimates there are approximately eight billion barrels of crude oil recoverable in the Bakken. Of course this is assuming today’s technology and makes no consideration for future technological advances. Recent numbers from the EIA have put the total estimated Bakken reserves closer to twenty four million barrels of crude oil.
Horizontal Drilling the Key
Who knew the impact horizontal drilling would have on our country even just a few years ago. Today though, the possibility of energy independence is closer and oil and gas companies, along with the thousands of North Dakota and Montana mineral and royalty owners are driving this change.
Lagging Infrastructure and Crude Oil by Rail concerns
However, despite the vast amount of proven reserves in the Bakken, the industry infrastructure is still lagging production. Without efficient ways to get Bakken crude oil out of North Dakota and Montana, oil production will continue to out-pace takeaway capacity, leading to depressed prices and shut in production.
Combine the lack of infrastructure with the Bakken’s significant reliance on crude oil transportation by rail car and the region is facing significant challenges. Lynn Helms, director of the Department of Mineral Resources, told the Legislature’s Government Finance Committee that he expects as much as 90 percent of the state’s crude will move by rail in 2014. Obviously with the recent rail car derailments, including the April 30th disaster in Lynchburg, Virginia, more attention on crude oil transportation by rail will only add to the industry’s challenges.
Despite these struggles, the Bakken still accounts for over 10% of the nations crude oil production and is not expected to peak until mid-2020. It certainly is a promising time for North Dakota and Montana mineral owners.
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