Advances in fracking technology are helping to sustain production in the giant shale formation in North Daktoa and surrounding territories, even at today's low prices.
February 9, 2015
By Robert Stowe England
Saudi Arabia has scored some early successes in its battle for global oil market share, which has sent prices crashing and taken the wind out of the sails of the North American shale oil boom. New exploration and rigs counts are down across U.S. shale territories. (See also “ Lack of OPEC Control Means a Wild Ride for Oil Prices.”)
Yet the Bakken shale oil formation, located under North Dakota, Montana, Manitoba and Saskatchewan, has been rather resilient to the global price wars. Is the Bakken oil boom over? Absolutely not, according to economist Philip Verleger, owner and president of PKVerleger, an energy markets consultancy firm in Carbondale, Colorado. “The Bakken’s vast boom is going to slow down, but it’s not going stop,” he says. In the Bakken’s favor is an economically sound combination of fracking’s disruptive technology and the highly favorable geology of the formation itself. Continuous improvements in fracking technology — rivaling, as Verleger points out, the personal computer’s 40 percent average annual gain in productivity from technological developments during its existence — are on track to expand the recoverable oil reserves and to lower costs.
“My take on this is, there’s a lot of oil down there,” says Verleger. “They’re going to find it. Once they’ve figured out how to get it out the first time, the recovery rates will just keep rising.”
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