Sunday, February 28, 2010


The prize: Bakken crude in a clear dish.

How we get that prize: Night drilling in February--bring your sweater.

You're not a real American if stories like this don't make you happy, and excited. As you read this fascinating WSJ piece on the North Dakota oil boom, notice how:

**Aggressive oil exploration has brought prosperity to a lagging state--where unemployment is now 4.3%. "Booming Bakken oil production has helped North Dakota escape the worst of the economic downturn. The state's unemployment rate was 4.3% in December—more than five percentage points below the national level—and the state government projects a surplus for the current budget cycle."

**The REAL oil experts--those whose livelihood depends on PRODUCING OIL AT COMMERCIALLY VIABLE PRICES--sure as hell haven't given up on finding oil here on the good old North American landmass. "'It's a true game-changer,' said Jim Volker, chairman and CEO of Whiting Petroleum Corp. a Bakken oil producer. 'We still think there's a significant amount of oil reserves in the United States left to be discovered.'" And I LOVE this quote from Harold Hamm, chairman of Continental Resources: "Most people felt like they could kind of write off the oil industry in the U.S., and that's just a long way from the truth. The fact of the matter is that a lot of people quit looking for oil."

**Those bad old greedy oil companies have taken the time to build their own rail-line to transport the shale oil. Isn't this what we call the "multiplier effect" of private industry growth?

**Those bad old greedy oil companies have within a few short years developed new production techniques that have converted essentially worthless rocks to valuable engines of petro-industry growth...even as oil prices have slumped from $80/barrel to $50/barrel.

**At $78/barrel, North Dakota's oil production will be worth $6.24 billion, with a B, per year. Not bad for a state with less than 1 million people.

**Mark Papa, the chairman of EOG Resources, almost casually describes why his company decided to risk "$20 to $40 million" after a string of early failures: "The first three or four wells, it was not clear that there would be a viable economic solution. But we just felt like, well, it's worth investing $20 to $40 million in this because if it works there's a huge upside." IOW: the promise of POTENTIAL huge profits DOES encourage expensive investment, including LABOR.

**The sheer technological advances spun off from this aggressive oil exploration have made it profitable to extract Bakken oil when prices are above $50/barrel, when just a couple of years ago it required $80/barrel, and shortened the time to drill a well from 56 days to 24. Plus these same advances promise to increase production in other parts of the world. "Marathon Oil Corp. hopes to use what they learn in North Dakota to produce oil and gas overseas. 'It's been a great laboratory for us," said Dave Roberts, who heads exploration and production for Marathon.'"

So we can all agree that no real American wouldn't be thrilled by a story like this, especially in hard times when unemployment is bumping the 10% mark, right? Good news, right?

But can you imagine even one member of the Obama Cabinet being happy with this story? Just imagine how they would spin it against the bad old greedy oil companies, capitalists, exploiters, save the shales, Cheney, Haliburton, Bush, Blahblahblaaahhhhh...

Whatta gang of phonies they are. Claim to be focused on jobsjobsjobs, yet they do everything they can to crush energy production of oil (and coal) right here, huge and strategic industries that could expand by millions of high-paying jobs.

Well, they will ultimately, and epically, FAIL miserably. Because one Harold Hamm is worth a thousand Barack Haman Obamas.

FEBRUARY 26, 2010
Oil Industry Booms -- in North Dakota
State Is Riding High as Firms Develop Better Ways to Tap Huge Bakken Shale Deposit, Raising Hopes for U.S. Production

KILLDEER, N.D.—A massive oil reserve buried two miles underground has put North Dakota at the center of a revolution in the U.S. oil industry, a shift that has radically altered the fortunes of this remote area.
The Bakken Shale deposit has been known and even tapped on occasion for decades. But technological improvements in the past two years have taken what was once a small, marginally profitable field and turned it into one of the fastest-growing oil-producing areas in the U.S.
The Bakken Shale had helped North Dakota oil production double in the past three years, surging to 80 million barrels in 2009—tiny relative to the more than seven billion barrels consumed by the U.S. every year, but enough to vault the state past Oklahoma and Louisiana to become the country's fourth-biggest oil producer, after Texas, Alaska and California. If current projections hold, North Dakota's oil production could pass Alaska's by the end of the decade.
"Most people felt like they could kind of write off the oil industry in the U.S., and that's just a long way from the truth," said Harold Hamm, chairman and chief executive of Continental Resources Inc., one of the biggest Bakken producers. "The fact of the matter is that a lot of people quit looking for oil." Continental reported Thursday that its North Dakota oil production doubled in 2009 and would continue to grow rapidly this year.
The Bakken Shale could contain up to 4.3 billion barrels of recoverable oil, according to the U.S. Geological Survey. That would make it the biggest oil field discovered in the contiguous U.S. in more than 40 years—and many in the industry believe the amount of recoverable oil could be even greater as new technology allows companies to tap more of it.

And a lot of hilarious comments there, 71 so far.

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