Bakken: The New “Gold Rush”, by Stanton Dodson, Chairman and CEO of Great Dakota Energy.
What used to be a wheat-and-cattle industry in the state of North Dakota is now turning into a giant oil industry that produces millions of barrels of oil annually. While big oil companies are dancing to the tune of billions of dollars, counties surrounding the Bakken Shale Formation are cashing in on the unprecedented economic and social development in the area.
Fracking and the Oil Rush
Oil was known to exist in North Dakota and Montana in a large area called the Bakken Shale Formation (or simply the Bakken Basin). But it wasn’t until the late 1990s did oil companies and the United States Geological Survey (USGS) took notice of the Bakken Basin. According to an August 2011 report from the Energy Policy Research Foundation, in 1995 the US Geological Survey made an initial estimate of 151 million technically recoverable barrels of oil in the Bakken Formation. But in 2008 that measurement was revised and increased to 4.3 billion barrels due to the successful start of drilling in North Dakota. This much larger prediction was due to a combination of the unprecedented technique of hydraulic fracturing (fracking), the influx of independent investments, and high initial production (IP) rates.
In the span of just two years, the amount of oil produced per day rose from 138,000 barrels per day to now more than 450,000 barrels per day. With such constant increases, it is easy to see that any estimate made subsequently is likely to be much higher than 4.3 billion barrels. As of January 2011, North Dakota state officials declared that in their state alone, there are 11 billion barrels of technically recoverable oil.
The oil under the Bakken Shale Formation was inaccessible to drillers in the past due to the hard shale bed that forms a layer of rocks above Bakken’s oil reserve. Thanks to the advancements made in fracking (hydraulic fracturing) and horizontal drilling, the USGS and many oil companies were able to assess Bakken’s recoverable oil and tap into the clean, pure oil found therein.
This massive oil reserve is what’s driving businesses and investors into what were traditionally wheat-and-cattle states of North Dakota and Montana – an economic event similar to that in California during the great gold rush of the 1800s.
A Gold Rush
“It literally is like a gold rush,” a Billings County, North Dakota businessman said of the burgeoning economic boom in North Dakota.
At an estimated 3 to 4.3 billion barrels of recoverable oil, Bakken is gaining ground on Alaska and Texas in oil production. Investors and businesses continue to flock into North Dakota and Montana to get a share of the prosperity that is now changing the fortune of thousands of people involved in the oil business.
Thousands of jobs have opened in the oil industry alone, from oil rig workers to truck drivers. That’s not counting the thousands of workers required by businesses that offer auxiliary and basic services to the oil workforce, such as housing and food service / catering.
Local county authorities are also trying to keep up with the population that has doubled (even tripled in some counties such as Billings) in number since the discovery of the Bakken. Taxes collected from the oil leases and businesses enabled counties such as Richland, to build a social services building, a justice center, and a health center for the residents.
The state of North Dakota now plays host to more than 350 oil companies in the area where they are operating more than 5,800 oil wells.. More businesses and investors are still expected to arrive to take part in what has become the newest drilling frenzy of the second millennium.
This article is brought to you by Stanton Dodson, Chairman of Great Dakota Energy.