Market Overview

Why Peak Oil is Peak Idiocy

I reported earlier today on the ongoing oil boom in North Dakota's Bakken region, which has set fresh oil production records in six out of the last seven months and now produces 6% of America's crude oil.  And all of this is taking place in an area that was never expected to produce so much oil, despite the 4.3 billion barrel estimate of reserves there, because the dense, nonporous rock in the Bakken region makes extraction extremely difficult and costly.  That all changed when advanced horizontal drilling and hydraulic fracturing techniques started successfully tapping Bakken oil two miles below the surface in 2006.  The original estimates were for peak Bakken production of only 220,000 to 280,000 barrels per day, but daily production went above 280,000 in April this year by September had reached 341,384 barrels.  Oil production is expected to hit 400,000 barrels per day by next year, and remain at that level or higher for the next 10-15 years.
Now the Bismark Tribune is reporting that:
"Know-how gained from North Dakota's once-perplexing Bakken shale formation is being used to exploit other onerous oil plays across the globe.  Oil companies and countries a world away have taken notice of North Dakota's success, said Lynn Helms, director of the state Department of Mineral Resources.
Companies say they are aiming to apply technology learned from the Bakken to geologically similar shales in China, France, Poland, Canada and in some U.S. states, including Wyoming, Utah and Colorado. Companies already have used Bakken technology to successfully tap the rich Three Forks-Sanish formation, directly below the Bakken."
MP: New, advanced drilling techniques for drilling oil have revolutionized the domestic oil industry in North Dakota, and will likely also open up new oil production in other parts of the world in the near future like the Alberta Bakken in Canada. That's one reason that "peak oil" is peak idiocy: it always underestimates the ultimate resource - human capital (i.e. human ingenuity and the resulting innovation, advances, new technology) - which is endless and boundless, and will never peak.


The following article is from one of our external contributors. It does not represent the opinion of Benzinga and has not been edited.

 

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