Residents of North Dakota are cheering, "We're #2!" Official government statistics released this week showed North Dakota has now exceeded California as the second largest oil producing state in the nation.
The best kept secret in America is that the country is filled with vast amounts of energy resources. Some estimates place the Bakkan Formations which run across the Dakota's, through Montana, and into Canada as reserves which are potentially double of what was discovered in Alaska’s Peugeot Bay, an area which accounts for 25% of America's domestic oil production.
In 2009, America imported roughly two-thirds of her oil needs. Per the energy Information Administration, today America imports less than half. But by 2017, investment bank Goldman Sachs predicts the US could overtake Saudi Arabia and Russia as the world’s largest oil producer.
There is great irony in the possibility America could become among the world’s largest oil producer. Expanding our nation’s energy resources have for many years been largely ignored by the government, as it sought to explore instead alternative renewable energy solutions.
Yet the economic boom which followed the discovery of oil wells like the Spindletop Fields in Texas could again be repeated. Over the past decade, new drilling techniques in the gas and oil industries have produced viable performing wells with unexpected reserves, representing in kind hundreds of thousands of new job opportunities in the U.S.
Natural gas production in the Marcellus Shale region — if developed — could create 280,000 new American jobs and add $6 billion in new tax revenues to local, state and federal governments over the next decade, one study finds.. The Marcellus region is a layer of shale rock underneath much of western Appalachia, from southern West Virginia into southwestern, central, and northeastern Pennsylvania, and the southern tier of upstate New York.
“One of the biggest opportunities to create jobs and increase America’s energy security lies within the Marcellus Shale region,” said Jack Gerard, president and CEO of the American Petroleum Institute. “Pennsylvania, New York, and West Virginia have enough natural gas to create hundreds of thousands of well-paying jobs and provide Americans with a stable, domestic energy source for generations to come.”
As the supply of natural gas has increased, America has benefitted from both the new employment opportunities created as well as the decrease in cost of gas itself. Today, natural gas fired electric plants produce the cleanest of the fossil fuel generation facilities at the lowest cost per kilowatt of energy.
Yet the drilling techniques which transformed the nation’s long-term reserve position on natural gas from one of near-term scarcity to one with 100+ years of proven reserves is the result of the ability to recover oil previously locked away in rock formations.
Fracking – short for hydraulic fracturing – and directional drilling have made available a conservative estimate reserve of 11 billion barrels of oil in the Bakkan Formation.
While oil was discovered in North Dakota over 60 years ago, the current oil revolution occurring within the state is often commemorated with the successful production well drilled in March of 2004. Harold Hamm, founder of Continental, noted, “We have a national treasure in our energy resources. America can free itself of Middle Eastern Oil dependency if we take up that challenge.”
Amy Myers Jaffe of Rice University said, “In the next decade new oil found in the U.S., Canada, and South America could change the centre of gravity for energy production. Already Europe is benefitting from America’s surplus of natural gas. If America weans herself off Middle Eastern Oil, the entire global economy would benefit.”
Another major oil find is the newly developed Eagle Ford formation in Texas which holds 10-20 years of proven reserves. Eagle Ford production combined with the Bakkan drilling could increase domestic output of 25%.
As our nation continues to develop renewable alternative energy solutions for the long-term, a new economic boom in oil and gas production offers us a bridge to that future. Developing our oil and gas reserves responsibly while technology advances to produce the necessary energy production and storage capacity to make renewable alternatives such as wind and solar more cost-effective and reliable presents many benefits.
From creating jobs to lowering our trade deficit to decreasing our cost for energy, our energy resources can truly be thought of as America’s National Treasure.