Tuesday, August 9, 2011

The Bakken Formation

There was a letter to the editor to The Sun on Saturday that essentially reproduced a chain letter that has been going around for a few years, discussing how the US Government is working to leave us dependent on foreign oil when we are just sitting on trillions of barrels of oil. This isn't exactly true so I couldn't let it lay. However, since they really want letters to be under 250 words and mine hit 500, I'll post it here as well:

An August 6th letter to the editor asked why, on the basis of an article in Forbes, the US is not exploiting oil in the Bakken Formation for $16 a barrel. Unfortunately, no such Forbes article exists – its origin is a chain letter (http://www.snopes.com/politics/gasoline/bakken.asp). Like many email chains, this one is only partially true.
The Bakken and the Green River formations are real, and they hold an incredible amount of fossil fuel. The first factual error is that what we actually have in these places is not what you’d call oil, but oil shale. This is rock that will generate less than a barrel of oil per ton of rock. Like the Canadian Oil Sands, it is very difficult to extract and refine, and it is located in a remote area. It takes an incredible amount of water, infrastructure, and heat to produce. This heat must come from other non-renewables like natural gas. Furthermore, the 500 billion barrels cited is oil shale in place. This is different from technically recoverable oil (oil we can get at any cost) and oil that can be recovered at a reasonable price.  According to a 2008 USGS report (http://www.usgs.gov/newsroom/article.asp?ID=1911), fewer than 4 billion barrels of that oil is even technically recoverable.
Since the US uses 20 million barrels of oil each day, we would use all the oil in the Bakken in under a year, if we could produce it that fast. While the Green River formation is in fact orders of magnitude larger (800 billion barrels of recoverable oil, or 100 years’ worth), not even the most optimistic reports (http://www.rand.org/pubs/monographs/2005/RAND_MG414.pdf) suggest that we could be covering even a quarter of our today’s energy demands from this source within 30 years, and not for less than $30/barrel, and likely more. Unlike the Bakken, no commercial exploration of these fields has taken place, so there are quite a few unknowns.
Essentially, shale oil is not a magic bullet. We have known about these oil formations for decades, and they weren’t considered economically worth looking at until now. The fact remains that oil is getting harder to find and refine every year as more of the “easy” oil runs dry. Yet, world oil demand, especially in China and India, keeps growing. Eventually, the cost of oil will become prohibitive and demand will reverse and begin to fall. This is Peak Oil, and it will take the world economy down with it as modern life depends on huge quantities of energy.
The real question should be not why aren’t we developing our domestic oil sources – because we should be and are – but what can we do as a nation to reduce our demand while still maintaining a high standard of living? In Europe, where gas prices are much higher than here, people are much more reliant on mass transit. Perhaps instead of driving a private electric car from Chelmsford to Cambridge for work, one should be able to take transit from Chelmsford to new commercial developments in Lowell, or mixed-use village centers in Chelmsford.

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