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Bakken formation

Geological formation in North America

  • 20 min read
  • 4 chapters

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Through Break-even point

Besides the Bakken Formation being a widespread prolific source rock for oil when thermally mature, significant producible oil reserves exist within the rock unit itself. Oil was first discovered within the Bakken in 1951, but previous efforts to produce it faced technical difficulties that were cost prohibitive when cheaper energy sources were available elsewhere.

In April 2008, a USGS report estimated the amount of recoverable oil using technology readily available at the end of 2007 within the Bakken Formation at 3.0 to 4.3 billion barrels (680,000,000 m3), with a mean of 3.65 billion. Simultaneously the state of North Dakota released a report with a lower estimate of 2.1 billion barrels (330,000,000 m3) of technically recoverable oil in the Bakken. Various other estimates place the total reserves, recoverable and non-recoverable with today's technology, at up to 24 billion barrels. A recent estimate places the figure at 18 billion barrels. In April 2013, the U.S. Geological Survey released a new figure for expected ultimate recovery of 7.4 billion barrels of oil.

The application of hydraulic fracturing and directional drilling technologies has caused a boom in Bakken oil production since 2000. By the end of 2010, oil production rates had reached 458,000 barrels (72,800 m3) per day, thereby outstripping the pipeline capacity to ship oil out of the Bakken. There is some controversy over the safety of shipping this crude oil by rail due to its volatility.

This was illustrated by the 2013 Lac-Mégantic rail disaster, in which a unit train carrying 77 tank cars full of highly volatile Bakken oil through Quebec from North Dakota to the Irving Oil Refinery in New Brunswick derailed and exploded in the town centre of Lac-Mégantic. It destroyed 30 buildings (half the downtown core) and killed 47 people. The explosion was estimated to have a one-kilometre (0.62 mi) blast radius.

As of January 2015, estimates varied on the break-even oil price for drilling Bakken wells. The North Dakota Department of Natural Resources estimated overall break-even to be just below US$40 per barrel. An analyst for Wood Mackenzie said that the overall break-even price was US$62/barrel, but in high-productivity areas such as the Sanish Field and the Parshall Oil Field, the break-even price was US$38–US$40 per barrel.

Geology

The rock formation consists of three members: lower shale, middle dolomite, and upper shale. The shales were deposited in relatively deep anoxic marine conditions, and the dolomite was deposited as a coastal carbonate bank during a time of shallower, well-oxygenated water. The middle dolomite member is the principal oil reservoir, roughly two miles (3 km) below the surface. Both the upper and lower shale members are organic-rich marine shale.

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