On January 17th of this year, I published an article in these very pages titled "The Government Said I Lied About the Bakken."
You see, back in 2008, I was doing research on the quietly emerging oil boom in Montana and North Dakota, when I came across an obscure paper published in 2006 by the U.S. Energy Information Administration.
What I read knocked my socks off.
I reported the finding to my readers and it quickly went viral. I got a call from an official from the EIA that what I reported was a lie... that they never said what I wrote in the report. I forwarded him the link to the EIA report I used and I never heard back from him again.
In case you're wondering, here's a caption of the paragraph in the report that caused such a stir:
Of course the part of the paragraph that caused the stir was the "271 to 503 billion barrels of potential resource in place."
Literally a month after my report was published in 2008, the EIA released its own report on the Bakken, stating they estimate around 3.4 billion barrels of recoverable oil in place.
That's a huge difference: 3.4 billion barrels vs. 503 billion barrels.
But we stuck by our own analysis, arguing that there's a lot more oil to be produced, given the technology enhancements by companies using innovative techniques like multi-well pad drilling.
And ever since our original report on the Bakken was released in 2008, production in North Dakota has gone exponential.
In fact, oil production in North Dakota has increased more than 600% in the past several years, from 35.7 million barrels in 2005 to 237 million barrels in 2012.
But dear reader, the day is mine!
The EIA just released another assessment on recoverable reserves in the Bakken.
The new report estimates the amount of recoverable oil in the Bakken to be at 7.4 billion barrels. If you're doing the math at home, that is more than twice the previous estimate of 3.4 to 3.6 billion barrels from its 2008 report.
They were only off by 100%.
According to the EIA report published 2 days ago:
The United States Geological Survey (USGS) today released an updated oil and gas resource assessment for the Bakken Formation and a new assessment for the Three Forks Formation in North Dakota, South Dakota and Montana. The assessments found that the formations contain an estimated mean of 7.4 billion barrels (BBO) of undiscovered, technically recoverable oil. The updated assessment for the Bakken and Three Forks represents a twofold increase over what has previously been thought.
The USGS assessment found that the Bakken Formation has an estimated mean oil resource of 3.65 BBO and the Three Forks Formation has an estimated mean resource of 3.73 BBO, for a total of 7.38 BBO, with a range of 4.42 (95 percent chance) to 11.43 BBO (5 percent chance). This assessment of both formations represents a significant increase over the estimated mean resource of 3.65 billion barrels of undiscovered oil in the Bakken Formation that was estimated in the 2008 assessment.
"These world-class formations contain even more energy resource potential than previously understood, which is important information as we continue to reduce our nation's dependence on foreign sources of oil," said Secretary of the Interior Sally Jewell. "We must develop our domestic energy resources armed with the best available science, and this unbiased, objective information will help private, nonprofit and government decision makers at all levels make informed decisions about the responsible development of these resources."
Since the 2008 USGS assessment, more than 4,000 wells have been drilled in the Williston Basin, providing updated subsurface geologic data. Previously, very little data existed on the Three Forks Formation and it was generally thought to be unproductive. However, new drilling resulted in a new understanding of the reservoir and its resource potential.
You can find the complete EIA press release on the Bakken here: http://www.doi.gov/news/pressreleases/usgs-releases-new-oil-and-gas-assessment-for-bakken-and-three-forks-formations.cfm
But here's what's going on: Technological innovation in the oilpatch is moving faster than government analysts can keep up with it. And that's usually the case in any inudstry. So think about this.
If oil production in America's shale formations is increasing exponentially and reserve estimates are being increased by 100%, makes you wonder if we truly can become energy independent.