State wants oil study finished

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State officials want the U.S. Geological Survey to complete a study on the expansive Bakken shale formation where estimates of oil reserves range from as low as 10 billion barrels to as high as 500 billion.

The Bakken encompasses some 25,000 square miles in North Dakota, Montana, Saskatchewan and Manitoba. About two-thirds of the acreage is in western North Dakota.

The amount of oil that actually is recoverable has yet to be determined, but several studies have been done through the years on the total amount of oil held in the Bakken. "They've ranged from 10 billion (barrels) to 92 billion to 132 billion to 500 billion," Lynn Helms, director of the state Department of Mineral Resources, told the North Dakota Industrial Commission on Tuesday.

The latter estimate was made by Leigh Price, a Denver-based USGS geologist who died in 2000 before his study was published.

The Industrial Commission, which consists of Gov. John Hoeven, Attorney General Wayne Stenehjem and Agriculture Commissioner Roger Johnson, voted Tuesday to send a letter to the USGS requesting that the study be published for review by the scientific community.

Sen. Byron Dorgan, D-N.D., earlier this year made a similar request, saying that although oil development already is under way in the Bakken, Price's study has the potential to spur even more activity.

Hoeven said Tuesday that the more oil available in the state, the more resources the industry will bring.

"The official information out there now from the U.S. Geological Survey on a nationwide basis, for North Dakota there's about 400 to 500 million barrels of recoverable oil," Hoeven said. "This is very important in that Price is saying, 'No, the Bakken formation could have 400 billion barrels' - not million, billion - that's why I think it's important."

Brenda Pierce, a program coordinator for the USGS energy resources program, said the agency would consider the Industrial Commission's request but would not comment on it until it was actually received.

She said the USGS plans to study the oil and gas resources in western North Dakota's Williston Basin in late 2007 and early 2008.

"This new USGS assessment of the Williston Basin will build upon raw data from the work of Dr. Price, but also incorporate data from other research studies that have been conducted since his passing," she said.

Hoeven said Price's study should be published now.

"I think the whole idea of getting both the geological community looking at it and industry looking at it and analyzing it, that's all good," Hoeven said.

Pierce said that an agency peer review of Price's study has not been completed.

Helms said state officials believe a more accurate estimate of the oil in the Bakken is between 200 billion barrels and 300 billion barrels - an estimate by Canadian researchers this year with help from the North Dakota Geological Survey and Oil and Gas Division.

"That's a followup to Dr. Price's paper," Helms said.

He said some of Price's methods have been questioned, which is why state officials want the study reviewed by the scientific community.

"We really don't have the expertise on staff to look at (Price's) geochemistry methods," he said. "That's something that the geochemistry community should look at, and that's why we think his paper should be published."

Helms said estimates of how much oil could actually be recovered from the Bakken formation also vary widely, from 3 percent to 50 percent. But even at 3 percent, he said, the oil resource would be "absolutely huge" even at 200 billion barrels.

Helms said advances in technology have helped companies better retrieve oil from what is known as the "middle Bakken," a thin layer of dense rock nearly two miles below the surface.

About two-thirds of the 36 oil rigs operating in North Dakota are in the Bakken. Helms said about 20 operators have leased about 500,000 acres of land in the Bakken over the past two years, and that the number could keep rising.

However, he acknowledged in an interview that a lack of oil pipeline capacity in North Dakota could hamper future development, no matter how much oil is in the Bakken. He said state officials continue exploring possible solutions to the transmission problem.

"The total (daily) takeaway for North Dakota crude is 110,000 barrels, and it's maxed out," Helms said.

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