Monday 13 January 2014

THE BAKKEN SHALE FORMATION

The Bakken shale formation is a 200,000 square mile geological area around Williston, North Dakota. Most of the population there have Scandinavian roots, and the formation is named after a local man called Henry Bakken, who was descended from a Norwegian immigrant. Bakken discovered oil in the formation in the 1950's, but nothing happened at the time, since the technological barriers to extracting it were too great. Basically, the oil and gas is enclosed in solid rock rather than being in liquid form; and getting rid of the rock element was simply too difficult.

That all changed with the arrival of hydraulic fracturing (or "fracking") technology. After drilling down, often several kilometers, the rock is bombarded at high-pressure with a mixture of water and chemicals, which causes it to fracture, thereby releasing the oil and gas. Since this started in 2000, production from the Bakken went up from virtually zero to 450,000 barrels a day by 2000. In April 2013 the US Geological Survey estimated that around 7.4 billion barrels of oil would eventually be recovered from the the formation. That is a lot of oil.

A lot of oil requires a lot of men to extract it. North Dakota was America's least populated state to start with, and it was particularly unpopulated around Williston. Already the population has tripled, and in a particularly skewed way; 90% or more of the arrivals are hard-working, hard.living males with a lot of cash in their pockets. That has put pressure on local services, such as health and law and order.

Fracking from the Bakken and other places has transformed the U.S. energy sector, indeed the whole U.S. economy. 10 years ago, it was an axiom of economic and foreign policy that the U.S. would become increasingly reliant on foreign oil, imported from worrying places such as Saudi Arabia and Angola. Now, domestic oil and gas production is rising fast, and it is expected that the U.S. will overtake Saudi Arabia as the world's largest hydrocarbon producer before too long. Pipelines and terminals built for imports are being reversed/converted, so that they can handle exports.

A Norwegian farmer's curiosity out on the prairie may not have made him rich; but it might just be one of the things that has most influence on the world during the 21st century.

Walter Blotscher

1 comment: