|The Oil Drum (TOD) had a didicated post of the Bakken last year. It was written by a petroleum engineer in the industry.
The article uses an empirical approach. There are lots of graphs and number crunching at the following TOD article:
The Bakken Formation: How Much Will It Help?
The authors concusions:
1. The Bakken shale has produced about 111 million barrels of oil during the last 50+ years in Montana and North Dakota.
2. Total Bakken production is still rising, and producing at the rate of 75,000 BOPD in October 2007.
3. Because of the highly variable nature of shale reservoirs, the
characteristics of the historical Bakken production, and the fact that
per-well rates seem to have peaked, it seems unlikely that total Bakken
production will exceed 2x to 3x current rate of 75,000 BOPD.
4. The latest boom in Bakken production is driven by the application
of horizontal wells and hydraulic fracturing technology, which has
added about 70 million barrels of production in 7 years. Ultimate
recovery of the already-drilled wells should be at least double this
5. The USGS estimates the mean volume of technically recoverable
hydrocarbons to be 3,649 million barrels of oil. This is roughly 7 to
12 times the size of already known resources.
6. Based on current production and areas likely to be drilled, the
USGS estimate of technically recovery resources seems optimistic.
7. The Bakken potential resource, while large by US onshore field
standards, will have only a minor effect on US production or imports.
Using 2006 US imports and consumption for comparison, the Bakken
undiscovered resource of 3,649 million barrels of oil, if subsequently
discovered and fully developed, would provide us with the equivalent of
six months of oil consumption or 10 months of imports, spread over 20
or more years. In reality, the reserves developed are likely to be many
times smaller than this value.
8. The October 2007 production rate of 75,000 BOPD amounts only 0.4% of US oil consumption, or 0.6% of imports.
9. Per-well Bakken production peaked in August 2005 at 116 barrels a
day, and was down to 79 barrels a day in October 2007. If the Bakken
production history in the 1990s can be used as a guide, the peaking of
per-well production may portend a peak in total Bakken production.***
My take is, the Bakken is much ado about nothing in regarding to supply issues.
Re: It's a Madoff world -
The correction of that will not be played out in some oil field, but in Washington/Wall Street or Mainstreet.
Time will tell.