"400 Billion Barrel" Bakken Formation an Internet Myth

No, really; this isn't just the Democrats talking down the amount of recoverable oil. It's the actual USGS estimate.

Conservative bloggers, of course, are guilty of pushing this vicious smear.

The "400 billion barrel" figure came from a draft report posted on the internet which 1) has since been debunked and 2) wasn't even talking about what people usually talk about when they talk about the oil capacity of a field (that is, barrels that can actually be recovered with existing technology and at a profit).

Reports circulating on the Internet tell of an oil field spanning parts of western North Dakota and eastern Montana where 400 billion barrels of oil supposedly are just waiting to be tapped. However, the U.S. Geological Survey (USGS) tells Cybercast News Service that those huge estimates are "a myth."

A USGS report issued in April estimates that there are between 3 billion to 4.3 billion barrels of oil in what is referred to as "the Bakken Formation" -- well below the 400 billion barrels discussed on the Web, but up from the previous estimate of 151 million barrels made in 1995.

Richard Pollastro, Bakken Formation task leader at the USGS, said the myth stems from a 1999 draft report -- never published -- by a now-deceased USGS employee, Leigh Price. Price estimated that the Bakken Formation holds up to 400 billion barrels of oil. To put that in perspective, Saudi Arabia, the world's largest oil producer, has about 260 billion barrels of known oil reserves.

Price, however, died in 2000, before his study could be peer-reviewed and published, and the Bakken Formation became the fool's gold of the oil industry.

"Unfortunately, in many instances, we are still trying to explain and defend our assessment versus the inappropriate and irresponsible posting of Dr. Price's 'draft report,'" Pollastro told Cybercast News Service.

According to Jonathon Kolak, a USGS scientist and information specialist, the discrepancy between Price's 1999 estimates and the agency's 2008 findings arises from the fact that Price was trying to assess the "oil generation potential" of the oil found in the pores of rocks and shale in the Bakken field, as well as the total content of how much oil might be pooling up - or "oil in place."

"What Dr. Price was looking at was 'oil generation potential,' and then, from that, trying to make an estimate of 'oil in place,'" said Kolak. "Those terms are very distinct from 'undiscovered technically recoverable resources.'"

Further, if you read on, you'll see the formation actually is already being drilled -- so while we could see more drilling and more oil, the idea that this is some untapped resource is also wrong.

We do have a lot of untapped oil. Not enough to be nearly self-sufficient, but certainly enough to reduce our dependency on foreign oil (and foreign blackmail) and reduce prices substantially. But there is unfortunately no silver bullet lurking under the Dakotas.

Of course we should drill more in Bakken -- the Democrats always claim that any individual site doesn't have enough oil to solve all of our energy problems. Which is a very strange criterion. Goalposts being moved to the next stadium over.

Via Hot Air.

Meanwhile, Dick Morris discusses the "speculation tax" on oil.

It's an informative read, but his conclusions are wrong. He suggests (without quite advocating) that if only speculators were restrained from speculating, oil prices would come down.

That's... sort of true, and that sort of bureaucratic response may be useful. (Increasing margins for speculation up from the piddling 5% currently demanded would reduce a lot of this.)

But the main reason future oil prices keep getting bid up to the heavens is that there is nothing, nothing but upward pressures on prices visible on the horizon. If there were a more equitable mix of upward and downward pressures (the latter coming from, say, expanding US production, or something patently insane like that), prices would be restrained.

You can lose a lot speculating. It's just that, at the moment, there's so little risk of prices actually falling that no one is much afraid of the downside.

posted by Ace at 01:50 PM

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