As 2015 winds down and the Bakken gears up for 2016, many companies and employees are wondering what energy futures will hold. Many believe the best way to understand and predict the future is to look to the past. This week’s column looks at the top sound bytes that have shaped the Bakken into what it is today.
Loren Scott, president, Loren Scott and Associates:
“Here is what you find when looking at the price of oil. Typically it is the same everywhere in the world because there are about 3,700 very large crude carriers floating on the surface of the ocean taking oil where the get the highest price. And that has a tendency to keep the price of oil the same everyplace,” Scott said. “The breakeven points are very different within the shale plays across the United States. If you look at the Bakken breakeven average number, which is around $50, and the word average is important. They can change easily. Now compare it with Tuscaloosa Marine Shale down here in Louisiana where the breakeven number is $92.”
Former North Dakota Governor and Continental Resource Board Member:
“The reality is the oil companies are going to extract our minerals resources where they can the most efficiently for the least amount of cost. And we need to be aware of that in North Dakota.”
Tyson Olsen, rig manager of Houston-based Nabors Drilling:
“A good rig move, assuming all the trucks and everything moves in a perfect world, will take about four days. We contract out the trucks and crane, but our crews do pretty much everything else.”
Robert Bryce, senior fellow and economist, Manhattan Institute, Austin, TX:
“I think there are some rivers that are just dry right now. There are some consolidations on the midstream sector, but when it comes to the upstream companies it may be awhile before we start to see more M&A activity. I think a lot of companies have been reluctant to slow down their drilling and are hoping for an increase in oil prices. If oil and gas prices stay at these levels M&A activity will likely pick up in 2016.”
North Dakota State Tax Commissioner Rauschenberger:
“Even though we have oil trading in the mid-40’s, taxwise we are still collecting about $131 million dollars a month in oil at gas taxes. So in many respects we are still holding pretty strong. We’ve been pretty lucky on the production side of things, holding steady. But we have seen some weakening in our sales tax. We have not been meeting our mark in sales tax.”
North Dakota State University president Dean Bresciani:
“If you want to say right now the North Dakota, South Dakota, Montana play has a 60-80 year play potential. Pull a few more percentages out of that, unless transportation capacities improve dramatically, now we are starting to push out 90-100 years. And then another technology will come along. Using current technologies, which we brag out being able to extract more than ever before in history because of fracking, that’s still leaving over three-quarters of the asset still in the ground,” Bresciani said. “The next technology if it extracts just one to three percent, we’re talking millions of barrels more of oil.”
Matthew Burton-Kelly, research scientist, EERC, Grand Forks, ND:
“A residual oil zone is a place where you had a previous geological zone where there was oil in place and it has been swept. Down in Texas they call it ‘Mother Nature’s water flood’. So if you had a structural trap and had fluid flow or groundwater flow through that, you are essentially doing what we call a ‘water flood’ or ‘secondary recovery’. If you drill into it (oil saturation) you are going to get 20-40 percent more oil saturation which isn’t going to produce. But with potentially other methods you could produce the oil out of it.”
Jeff Voorhis, corporate engineer, HyBon Engineers, Houston, TX:
“In the Bakken there is sweet gas and not much sour gas. If the crude doesn’t have sulfur in it, it is a sweet crude. If it has sulfur it is going to be sour crude. And sour crude produces sour gas too.”
Jim Semerad, North Dakota Department of Public Health, Bismarck, ND:
“I’ve worked here since 1984 and in that time everything is significantly cleaner than it used to be,” Semerad said. “The cleaner standards are also tighter so it can be actually much more difficult to achieve and the regulations are much more stringent. So it can be much more difficult to receive a permit or achieve approval for a permit because everything is so much more stringent.”
Kelly Wilkins, Senior Vice President Business Development , Bridger, LLC, Houston, TX:
“The Bakken is a huge long term expansion opportunity for the company. The crude oil trucking company that truck stations connect to, interstate pipelines. They have rail cars they use and we have contracts with certain rail facilities. The Bakken projects integrate well with what Bridger has happening across the country,” Kelly Wilkins, senior vice president business development, Bridger, LLC.
David Goodin, president and CEO, MDU Resources, Bismarck, ND:
“MSU Resources along with Calumet Specialty Products, we a very pleased to have put this plant up,” Goodin said. “It wasn’t without help from many others. We’ve invested about 2.5 million man hour of labor into this project. And we’ve done that with zero loss time accidents.”
Tim Fischer, CEO, Bakken Energy Services, North Dakota:
“I am not as valuable in that area now as I used to be. The industry itself has a way of cleaning itself. Now I do more in depth consulting. Take G.E., they might say we are looking at doing a remote gas capture and is there are marketplace. So then I will go out and actually do work for them.”
Drury Phebus, 92-year-old Baker, MT resident, former postmaster (Baker) and World War II veteran:
“I see the Keystone Pipeline as a great project for Baker with the onramp. I am sure when the administration changes it the two party system will work and the project will go through. Obama won’t sign off and he is using it for political reasons. I do believe that. The president hasn’t been kind to Fallon County holding up the pipeline.”
Leave a Reply