Regarding the Bakken formation

Being an energy geek I've been forwarded an e-mail about the Bakken formation on several occasions, which basically says it will make everything better. Some of the e-mails had vague claims that environmentalists wouldn't... something or other.

Anyway, here is the short version and you can read the following for details. I really hope there is more the the roughly 5 billion barrels of recoverable oil that is currently reported by the oil geologists as it's their opinion that counts. Actually I hope there is considerably more then 100 billion barrels because it makes our job a hell of a lot easier AND... it doesn't change the long term policy decisions.   Please keep in mind that that in the context of 80 million barrels a day of worldwide oil consumption, the trajectory doesn't really change if Bakken had 500 billion barrels of recoverable oil with fairly high daily flow rates. 

How I came to the above conclusion:

Starting at the top, it is not that the world is running out of oil, there is at least 1 trillion barrels of recoverable, conventional oil. The problem is what is left takes considerably more energy to extract/refine/... AND the most important part is the amount that can be extracted in a given day appears to have flattened out. Unconventional oil (ultra deep water, tar sands, natural gas condensates (not LNG)), were taking up the slack before the economy tanked and destroyed a fair bit of demand. Sadly the disaster in the Gulf of Mexico also demonstrated that deep water oil is extremely complicated, expensive, and when things go wrong...

While there might be crazy amounts of shale/tar/... that can be converted into oil from the Bakken formation, Colorado shale, or Alberta tar sands, it is the amount that could be extracted and refined in a given day/week is the number that really counts. It is also important to note how much fresh water is necessary to use in processing. Last I heard it took somewhere between three and five barrels of water to produce one barrel of oil from oil tar or shale.

Given the expanding economies (now more slowly) in oil exporting countries, and the skyrocketing demand for oil in India and China, combined with the aging super-giant oil fields (who's production is flat or declining [note #1]) it wouldn't really change the long term trend if Bakken was 100 billion barrels. This is because even if world wide consumption of oil was increasing at only 3% per year, oil demand would double in 23 years [note #2].

I really hope there more then 100 billion barrels of available oil in Bakken, AND it doesn't really change the long term policy choices we need to make. The following blurb is from the US Department of Energy from 2005 titled: "PEAKING OF WORLD OIL PRODUCTION: IMPACTS, MITIGATION, & RISK MANAGEMENT" [note #3]

"The peaking of world oil production presents the U.S. and the world with an unprecedented risk management problem. As peaking is approached, liquid fuel prices and price volatility will increase dramatically, and, without timely mitigation, the economic, social, and political costs will be unprecedented. Viable mitigation options exist on both the supply and demand sides, but to have substantial impact, they must be initiated more than a decade in advance of peaking."

The US Army Corp of Engineers came to a nearly identical conclusion [note #4]

Petroleum Trends
The oil market will remain fairly stable in the very near term, but with steadily increasing prices as world production approaches its peak. The doubling of oil prices from 2003-2005 is not an anomaly, but a picture of the future. Oil production is approaching its peak; low growth in availability can be expected for the next 5 to 10 years. As worldwide petroleum production peaks, geopolitics and market economics will cause even more significant price increases and security risks. One can only speculate at the outcome from this scenario as world petroleum production declines. The disruption of world oil markets may also affect world natural gas markets since
most of the natural gas reserves are collocated with the oil reserves.

#1 http://www.simmonsco-intl.com/files/giantoilfields.pdf
#2 http://en.wikipedia.org/wiki/Doubling_time
#3 http://www.netl.doe.gov/publications/others/pdf/Oil_Peaking_NETL.pdf
#4 http://stinet.dtic.mil/cgi-bin/GetTRDoc?AD=A440265&Location=U2&doc=GetTR...