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Tight Oil Resources in North America –
An Emerging and Evolving Opportunity
Center for Strategic and International Studies (CSIS)
Tight Oil Panel Discussion
December 7, 2011
Washington, D.C.
James A. Sorensen
Energy & Environmental Research Center
Grand Forks, North Dakota
© 2011 University of North Dakota Energy & Environmental Research Center.
Pre-Bakken North Dakota Traffic Jam
Bakken Boom Traffic
What Is Tight Oil?
• “Tight” refers to the extremely low permeability of the reservoir rock, which impedes the ability of the oil in the formation to flow freely.
• Tight oil is found in rock formations associated with organically rich shale at unminable depths.
• Some produce directly from shales, but much tight oil production is from low-permeability siltstones, sandstones, and carbonates that are closely associated with oil-rich shale.
Core from Bakken Middle Member
Tight Oil – Production Technologies
• Recent advancements in technology have spurred tight oil production.
– Horizontal drilling and completion
• 5000- to 10,000-ft laterals in the Bakken
– Hydraulic fracturing
• “Fracking” with a mixture of fluids and proppants
EERC . . . The International Center for Applied Energy Technology
Hydraulic Fracturing
(a.k.a. “Fracking”)
• A mixture of water, chemicals (typically
polymers), and proppants is pumped at high
pressure into the reservoir rock formation,
forcing fractures to open along the wellbore.
• Fracking water requirements range from 1 to 5
million gallons of freshwater per well.
• A percentage of the frack water returns to the
surface, in a controlled manner, through the
casing and is recovered and disposed of or
recycled.
• Proppants in the frack fluid become stuck in
the fractures that were created in the reservoir
formation, “propping” them open.
• The reservoir rock is now more permeable,
and oil can flow more freely into the wellbore.
Where Is the Bakken?
The Bakken Formation
is a rock unit occurring
deep in the Williston
Basin.
Discovered in the
1950s in North Dakota.
Prolific, sustained
production began in the
2000s.
Oil is currently
produced from the
Bakken Formation in:
• North Dakota
• Montana
• Saskatchewan
• Manitoba
“How Many Bakkens Are There?”
Magnitude of Recoverable
Tight Oil Resources
4000 MMbo
Data on
recoverable tight
oil resources are
not yet available
for many states.
Tight Oil – Projections
EERC . . . The International Center for Applied Energy Technology
2012 Williston Basin
tight oil production
will be over 500,000
bpd.
Eagle Ford will be over
100,000 bpd.
2020 North American
tight oil production
could be over
2,000,000 bpd.
2050 North American
tight oil production
could still be over
2,000,000 bpd.
How Much Bigger Can Bakken Get?
Currently only 1%–2%
recovery factor.
Enhanced oil recovery
technologies may improve
ultimate recovery.
Can CO2 be a game
changer in the Bakken?
Tight Oil – Challenges
– Multiple-stage fracking can
require millions of gallons
of water.
– The frack fluids may
contain chemicals that
have become the subject
of public concern.
– Flaring has been a source
of environmental criticism.
Environmental Issues
Tight Oil – Solutions
– Development and application
of frack fluid recycling.
– Reformulation of frack fluids
to be more environmentally
friendly.
– Utilization of flare gas.
• Infrastructure is catching
up.
• On-site and off-site uses
for gas are developing.
Environmental Issues
Tight Oil – Challenges
Public Perception Issues
• The construction of thousands
of well pads and truck traffic for
the drilling and fracking of
thousands of wells:
– Wear and tear on roads and
highways
– Traffic jams in rural communities
– Increased airborne dust
– Adversely affect the “viewshed”
Tight Oil – Solutions
• Increased use of technologies
to drill multiple wells from a
single pad:
– Reduces the overall footprint of
drilling operations.
• Construction of truck routes
around communities.
• Development and application of
environmentally friendly dust
control materials.
Tight Oil – Economic Projections
By 2012
1450 to 2940 wells/year, with 2140 being
expected.
• 100 to 165 rigs
• This equates to 12,000 to 19,800 jobs
10- to 20-year life span for the Bakken play
• 21,250 new wells
• This equates to 3000 to 3500 long-term
jobs
Source: Mr. Lynn Helms, Director of the North Dakota Department of
Mineral Resources, from a public presentation given in Williston, ND,
on 8/3/2010.
www.dmr.nd.gov/oilgas/presentations/ActivityandProjectionsWilliston2010-08-
03.pdf
North Dakota Example
Tight Oil – Economic Impact
A single well over its lifetime is projected to:
Produce more than 575,000 barrels of oil.
Generate over $20 million net profit.
Pay approximately $4,250,000 in taxes.
Pay royalties of $6,900,000 to mineral owners.
Pay salaries and wages of $1,550,000.
Pay operating expenses of $1,900,000.
Source: Mr. Lynn Helms, Director of the North Dakota Department of Mineral Resources,
from a public presentation given in Minot, ND, on 9/1/2011.
www.dmr.nd.gov/oilgas/presentations/MinotCOC2011-09-01.pdf
North Dakota Bakken Example
National Petroleum Council Report
Prudent Development –
Realizing the Potential of North America's Abundant
Natural Gas and Oil Resources
Final Report Approved September 15, 2011
Web site where report can be downloaded:
www.npc.org
Contact Information
Energy & Environmental Research Center
University of North Dakota
15 North 23rd Street, Stop 9018
Grand Forks, North Dakota 58202-9018
World Wide Web: www.undeerc.org
Telephone No. (701) 777-5287
Fax No. (701) 777-5181
James A. Sorensen, Senior Research Manager