The US government said Thursday that as much as 4.3 billion barrels of oil can be taken from the Bakken shale formation in North Dakota and Montana using current technology. The US Geological Survey called it the largest continuous oil accumulation it has ever assessed. The Bakken Formation encompasses some 25,000 square miles in North Dakota and Montana in the United States, and Saskatchewan and Manitoba provinces in Canada. About two-thirds of the acreage is in western North Dakota, where the oil is trapped in a thin layer of dense rock nearly two miles beneath the surface. Companies use pressurized fluid and sand to break pores in the rock and prop them open to recover the oil. The report released Thursday by USGS was done at the request of Sen. Byron Dorgan, D-N.D., over the past 18 months. A 1995 study by the USGS found 151 million barrels of oil could be recovered from the Bakken using technology at that time. “This is great news,” Dorgan said of the new report. “This is 25 times the amount of the previous assessment. This report comes at a time when we are desperately trying to be less dependent on Saudi Arabia and other Middle Eastern countries.” The assessment comes as US crude production has fallen steadily over the past three decades, with rate of decline slowed - or offset - only slightly by production from the deepwater Gulf of Mexico. That has led to increased imports. But as oil prices surged over the past few months, calls are mounting for a reduction in import dependence. Oil companies began sharing technology about two years ago on how to recover the oil. The technology involves drilling vertically to about 10,000 feet, then “kicking out” for as many feet horizontally, while fracturing the rock to release the oil trapped in microscopic pores in the area known as the “middle” Bakken. Oilmen have known for more than 50 years that the Bakken holds vast oil reserves, said Donald Kessel, vice president of Murex Petroleum Corp. But the price has never pushed demand high enough to develop technology to capture the oil, he said. According to Jim Ehrets, a Denver-based geologist with Headington Oil Co., it costs about 5 million US dollars to drill a well tapping the middle Bakken, and companies need crude prices of at least $50 a barrel to make it economical. Meanwhile, new exploration and oil production projects will require prices to remain above $70 a barrel, leaving little room for a substantial decline in energy costs, said the head of Total SA, Europe's third-largest oil company. "There is a new floor linked to costs'' of developing new oil fields which require a minimum of $70 or $80 a barrel, as drilling and other exploration costs rise, Total Chief Executive Officer Christophe de Margerie said at an energy conference in Paris. Total, along with Exxon Mobil Corp. and Royal Dutch Shell Plc, the world's two biggest publicly traded oil companies, need to find new oil and gas reserves amid demand. __
