"Unfortunately, in many instances, we are still trying to explain and defend our assessment versus the inappropriate and irresponsible posting of Dr. Price's 'draft report,'" Pollastro told Cybercast News Service.
Full story from Cybercast
I guess I'm really not surprised that this story didn't get any play in the big time media, but what Richard Pollastro, the USGS Bakken Formation task leader, had to say makes sense. I've never seen so much credibility given to an unpublished and non-peer reviewed scientific report in my life. "[I]nappropriate and irresponsible" pretty much sums it up.
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11 comments:
Dr. Price, like many others, was ahead of his time. May he rest in peace.
"Ahead of his time." Just like Al Gore?
I have never doubted Price nor any of those who claim that ultimately the Bakken contains oil reserves equal to that of Saudi Arabia or in the several hundred billion bbl range.
BUT the big question is what technology and at what price can these reserves be extracted. If your direct recovery cost runs upwards of $1000 a bbl and oil sells for $135, whatever oil that costs that much to extract will not get recovered any time soon. However, if you pop in with a new technology that can recover even a share of the oil for significantly less per bbl than the oil sells for, that technology will quickly be adopted and spread like wildfire through the fields. We are seeing that right now with the lateral and fracing technology.
Incremental recovery of oil tends to cost more and more per bbl, but technological breakthroughs have the opposite impact. No doubt lateral drilling and fracing will be looked upon 10 years from now as early "1st gen" technology for the recovery of oil from the Bakken and the drillers will have moved on to second, third and fourth generation technologies as state of the art.
Prior to 2006, it seems to me that drillers in the Bakken hadn't really changed their entire approach in significant ways from the approach they used to drill the Iverson well in the early 50s. Every once and awhile tho, someone comes up with an idea that basically says lets not keep doing the same thing we have done for 50 years and get the same marginally productive wells at best..lets try something that hasn't been tried before.Even better if this happens in an area where few if any thought there was oil that could be economically recovered.
There are always risks with being the first to try something new or different. But with these risks come huge rewards. Ask EOG about risks and rewards in the Bakken.
It just seems to me that at this point, advancing the drilling and recovery technologies in the Baklken has the potential for a much higher payoff for everyone than most of the other schemes being tossed about for making the US more nearly energy self-sufficient. That includes of course the gang focused on making corn into ethanol, the wind power advocates, the offshore drilling advocates etc etc etc.
We have in front of us one terrific opportunity for western North Dakota. Lets not blow it this time.
David
I still remember the 1% Factor being raised here.
Inappropriate and Irresponsible is not mentioning it.
I tend to agree with David that technology will someday vastly improve the recovery of oil from the Bakken or other formations.
I could envision 5 inch robots with miner's hats being sent down the hole to clear the natural fractures allowing oil to flow.
Dr. Price has become the "Nostradamus of the Bakken", who made all these forecasts that seemed wild and crazy at the time, but since his death everyone is grasping at whatever they see that could either support or countradict the estimates. To the "Bakken believers" he has become something of a cult hero who basically appeared to know more than the others trying to estimate the ultimate productivity of the Bakken. But others are saying that Price's numbers could not have possibly considered recovery technologies not in being used when he made is estimates, technologies like fracing and lateral drilling.
Since I am a resource economist by profession, I tend to think of the whole problem primarily in economic terms, and tend to belive that it is silly to try to estimate the reserves in the Bakken without some understanding of the state of the recovery technology in place as well as the price of oil. At $1000 a bbl, the Bakken contains substantially more recoverable oil than at $50 a bbl. I can also understand why some geologists would not necessarily tend to think so much in those terms.
But a basic truth of resource economics is that with any renewable resource, the amount that is available is not some specific number but varies directly with the assumption about the price being used.
Other forms of energy (wind, solar, biofuels) compete but only if they can be produced at prices lower than the recovery cost for the renewable source (crude oil).
David
oops
I said renewable when I meant NON-renewable
see edit below
But a basic truth of resource economics is that with any non-renewable resource, the amount that is available is not some specific number but varies directly with the assumption about the price being used.
Other forms of energy (wind, solar, biofuels) compete but only if they can be produced at prices lower than the recovery cost for the non-renewable source (crude oil).
a lot of hand waving. the reality is that the bakken has a long way to go to reach 1 billion barrels. wake me up when we reach that milestone.
SEC Proposes Rule Changes to Modernize Oil and Gas Reporting Requirements, Jan 26 2008:
http://www.sec.gov/news/press/2008/2008-122.htm
This proposal for reporting of probable and possible reserves should enhance overall valuations and investment in the developing Williston Basin.
FYI, in reading this link, it does not seem that LeFeve and Helms of the NDGS think that the Price report should not be released (posted) so long as the circumstances surrounding it are disclosed.
In my view, lack of peer review does not make the conclusions incorrect. It just means that the paper has not been reviewed.
https://www.dmr.nd.gov/ndgs/bakken/newpostings/07272006_BakkenReserveEstimates.pdf
Also, peer review will not stop people from misstating the conclusions (i.e oil generation and original oil in place vs technically recoverable amount)
http://www.newsvine.com/_news/2008/06/30/1624649-oil-is-making-millionaires-in-north-dakota
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