Bakkenworkers Scarce

Last week, I had the good fortune to dine in Bismarck with 20 high level employees of a large oil company, a company that does considerable business in western North Dakota. My official role was to provide a little after-dinner lecturette about “our state North Dakota.” You know: 47th in population, 19th in area. Three distinct regions: Red River Valley, Prairie Pothole, western slope. Outmigration. Meadowlark, the telephone pole (state tree) and the chokecherry. Yadda go ta North Dakota, where there’s cattle and there’s wheat and there’s folks that can’t be beat.

As you can readily see, I had nothing much to contribute to our guests, who were mostly from a place called Houston, but I eagerly signed on for the dinner in the hope of learning something about the future of oil development in our region.

I started by delivering a rather extensive lecture reviewing everything I know about oil. I quote my lecture in its entirety: “It’s some kind of liquid carbon, isn’t it? I’ve heard that up from the ground comes a bubbling crude?” Having thus established my street cred, I had the good sense to shut up and listen. One of the most important rules of life, especially for those prone to hold forth, is that you never learn anything while you’re talking.

I peppered our petroleum industry guests with questions for more than an hour. Here’s what they taught me.

* One: The Bakken oil pools at a depth of about 10,000 feet. But you don’t just drill straight down those two miles and – voila. Once you reach 10,000 feet you begin horizontal drilling another 9,000 or so feet. (Fascinating explanation, here, of how the pipe turns the corner). Now we’ve sunk almost four miles of pipe and still no oil. At this point water at extremely high pressure is forced down the pipe. This requires a lot of water, a great deal of power, and just imagine the pumping rigs. These jets of water shatter the shale that straddles oil, thus pooling a larger concentration of oil in one subterranean spot. Now you can pump the oil to the surface.

It’s extremely expensive to get at Bakken oil, but once you reach crude, the flows can be amazing.

The Bakken field was first discovered in 1953, but there was then no profitable way to extract it. Now, thanks to the staggering world price of oil and dramatically better drilling technologies, it makes sense (and $) to develop the field.

* Two: there’s lots of oil out there, but not nearly as much as the hype suggests. If the Bakken formation is systematically developed, all the company reps agreed that it will be a gigantic event in the history of North Dakota, one that will change the economic and social face of the state, but it will not be a gigantic event in the history of world oil development. It will not change the world oil equation. It will not drive down the price of oil or the gasoline in your SUV. It will, however, buy a little time as the world seeks out viable alternatives to its oil-based energy habits.

How much oil is down there? Unbelievable amounts. Some estimates run to hundreds of billions of barrels. Ah, but as the company folks explained, the real question is how much of that oil can be recovered even at 2008 prices. Nobody knows for sure, but the best current estimates are between 2.5 billion and 4.3 billion barrels. American oil consumption is 20 million barrels per day.

* Three: The industry folks say that even extensive development of the Bakken field will leave what they call a light environmental footprint. Compared to classical Texas or California drilling, the wells will be widely dispersed. The fact that horizontal drilling is required to access the oil means that the wells can be positioned where they cause the least domestic and aesthetic disruption. The pneumatic shattering of the shale that envelops the oil represents no environmental danger to the surface, to underground aquifers, or to the geological stability of the region.

Getting the oil out of the Williston basin to refineries and tankers is a bigger challenge, but industry experts say that the large volume of oil involved and the projected long life of the field mean that a pipeline infrastructure will be created that will bring real (and unprecedented) efficiency to the process.

* Four: Assuming that oil prices do not collapse or drop below $100 per barrel, it is safe to assume that all the recoverable oil will be coming out of the ground over the next 30 years. The oil execs have 31/2 big concerns.

First, they are having a really hard time finding oil workers. Brace yourself for this. Given the amount of hectic oil development around the world and a shortage of oil field workers, the companies are finding that workers are less interested staffing the Williston Basin than many other isolated places.

Second (and this is related), the North Dakota transportation infrastructure is woefully inadequate. From Houston or Dubai, it’s hard to get to Williston and not particularly easy to get in and out of Bismarck and Minot. The visiting oil reps said the most important thing we could do to insure sensible economic development in the Williston Basin is create a much-improved air traffic infrastructure.

Third, there is a need for much greater training of oil field workers at all levels. The reps said the natural institution for such training would be Williston State College, but so far not much that is useful has been organized there. (In my view, Bismarck State would be a better choice, under the amazing new leadership of President Larry Skogen).

Finally, admittedly a bit wryly, the oil execs said that the sheer magnitude and cash flow of the Bakken development is going to create lots of restless millionaires in western North Dakota. “Your very new, very rich person is often a social nightmare,” one executive said.

The only important thing I said to our guests was this: “You’re in the oil business. Your job is to find and extract oil. Today Venezuela, tomorrow the Aral Sea. I’m not saying all places are equal to you, but from an industry point of view, in some sense an oil field is an oil field, and any given surface environment is regarded as a mere staging area for the extraction process. We have no terrorists here in North Dakota, and no political instability. In spite of our reputation, this is not an extreme environment like the North Sea or Prudhoe Bay.

But we do have a very strong sense of place. Lewis and Clark passed right through the Williston Basin. Theodore Roosevelt found his conservation voice here, beginning in 1883. This is the home of the Assiniboine and the Hidatsa and the Mandan and the Sioux.

If it is true that we do not regard the region west of the Missouri River as sacred ground, we certainly do regard it as a heritage landscape. It is really important to us that we don’t impede your important work, but it is even more important to us that you remember always that this is our place, our homeland and that our longterm future, unlike yours, is right here.”

(Clay Jenkinson is the director of the Dakota Institute. He is also the Theodore Roosevelt scholar-in-residence at Dickinson State University. He lives in Bismarck. Contact Clay at Jeffysage@aol.com.)

(c) 2008 Bismarck Tribune. Provided by ProQuest Information and Learning. All rights Reserved.