From the Fiscal Times:
The Next North Dakota: 5 States About to Go Oil Boom
The black-gold rush in North Dakota—a technological revolution in oil production—is creating a new class of rugged millionaires.HT: Carpe Diem
North Dakota might be grabbing headlines, but horizontal drilling and “fracking” to tap into newly accessible oil reserves is by no means limited to that state. The shale revolution is still in its “early innings,” as a recent report by Credit Suisse put it. OPEC’s 2013 World Oil Outlook, published last month, said that new oil supply from the U.S. and Canada would hit nearly 5 million barrels a day within five years, up from last year’s forecast of 1.7 million barrels a day by 2018. As that boom plays out, tens of billions of dollars in new infrastructure and development will likely be invested in the coming years.
Where will the new investment be concentrated? Though oil and gas companies across the U.S. are busy buying up acres of mineral rights in oil shale hot spots in an effort to be early players in the next booms, most are staying quiet about early production numbers.
If they let on that they’ve uncovered another Bakken or Eagle Ford Shale, land and production costs could skyrocket. In Texas’s Eagle Ford, for example, companies were paying $250 to $450 an acre in 2009 when the area’s potential was unknown, but by 2011, an acre was going for $21,000 to $22,000.
The U.S. Geological Survey (USGS) and the Energy Information Administration (EIA) have only recently started to assess reserve areas, and the EIA estimates 482 trillion cubic feet of natural gas and 33 billion barrels are recoverable, revised from a mere 4 billion barrels in 2007. That estimate could still be conservative, however. The amount of recoverable oil in an area only becomes evident after companies begin to drill. “Early on, we didn’t have much experience on how these wells would be producing,” says Doug Duncan, associate coordinator of the energy resources program at the USGS. “We typically need about three years of production data from a large number of wells before we can start to reduce the uncertainty in our assessments.”
In North Dakota, the USGS estimated there were 3 to 4.3 billion barrels in 2008, but this year, it revised its number to 7.4 billion barrels. The USGS is now working on an assessment of the Monterey Shale in Southern California....MORE
