Last week, the 26th annual Williston Basin Petroleum Conference was held in Bismarck. I have attended this conference over the years, but this time it was different. Listening to the presentations and speaking with mineral owners, company leaders and production employees, there was a level of optimism that I had not seen before. But, even more than optimism, the feeling I got from the oil industry was confidence.
The last couple of years have been difficult for Bakken oil companies, mineral owners and the state, but the oil companies did not spend those years in a pity party. They got stronger, leaner and more efficient at pulling that tight oil from the ground. Sure, oil prices over $60 a barrel helps with the optimism, but the confidence that comes from surviving oil prices below $30 a barrel will pay dividends (and royalties) for generations. As Harold Hamm, CEO of Continental Resources, stated at the conference. "We would never have gained the efficiencies that we have today without going through that."
In March of 2017, Forbes ran a story, "The Beginning Of The End For The Bakken Shale Play," but, in May 2018 it looks like it may have just been the end of the beginning for the Bakken. The optimism, confidence and capital investment by Hamm and his competitors shows that the Bakken is here to stay. The Bakken is a multi-generational story that promises to positively impact our state, our country and the world far into the future. Consider this, currently there are just over 12,500 producing Bakken/Three Forks wells. To fully develop the resources, an additional 48,000 wells will be drilled. We are about 20 percent into the drilling phase and at a current average of 1,000 new wells per year. We will see drilling activity in western North Dakota for another 50 years! That helps put the Bakken into perspective. According to the North Dakota Department of Mineral Resources, the investment just in North Dakota for drilling costs, pipelines, rail and transportation facilities and natural gas processing to date is $127 billion and an additional $350 billion will be needed to fully develop the resources.
As impressive as these numbers are, oil industry leaders think they might be too low. An increased level of cooperation and information-sharing among oil producers is leading to significant increases in the percentage of oil that is being recovered by each well. Oil producers and the supporting industry continues to experiment with enhanced oil recovery techniques to reach more and more of the oil trapped in the shale. Each 1 percent increase in oil recovered means millions of dollars for mineral owners, oil developers and the state of North Dakota.
Many underestimated the Bakken and the independent oil companies that cracked the code on tight oil development from the beginning. The oil industry in North Dakota was being eulogized as recently as last year. But what I saw in Bismarck last week was a lean, efficient and confident oil industry reaping the economic benefits of the Dakota Access Pipeline and the new markets created by lifting the crude oil export ban. The Bakken will play an important role in US energy dominance for generations.
Grande represented the 41st District in the N.D. Legislature from 1996 to 2014. She is a wife, mom, grandma, research fellow with the Heartland Institute, lover of life and Jesus. Opinions are solely her own.