BISMARCK – North Dakota is launching an aggressive, multi-million dollar initiative aimed at significantly boosting oil extraction from the Bakken Shale, an effort officials believe will be a “game-changer” for the state’s economy and future energy dominance.
The North Dakota Industrial Commission recently approved $45 million in funding to advance enhanced oil recovery (EOR) projects. This funding, combined with a $25 million allocation from the legislature and an estimated $70 million investment from industry companies, creates a massive pool of money to tackle what is considered one of the world’s most difficult energy challenges.
The Challenge and the Goal
Currently, the Bakken, which is recognized as a top 10 oil field globally, only yields about 15 percent of the oil from every 100 barrels in the ground.
This means approximately 85 percent is left behind.
Ron Ness, President and CEO of the North Dakota Petroleum Council, told The Flag’s Scott Hennen that “Nobody in the world has figured out how to crack the code on oil recovery out of a tight shale resource on the second go around”.
The goal of the new research and investment is to figure out how to recover the next 15 percent and the 15 percent after that.
Ness said the total potential investment for these initial six projects is around $160 million, pending additional revenue from the Department of Energy and Senator John Hoeven’s efforts. The success of this initiative has the potential to change the trajectory of North Dakota for the next three to four decades.
Economic and Regulatory Context
The initiative comes at a time when investment has slowed in the Bakken. Ness noted that the “sweet spot” for Bakken well costs and investment is generally in the $73 to $85 per barrel range, but prices have been below that window, causing investment to slide.
The state currently has a $13 billion Legacy Fund and collects about $8 million a day in oil and gas tax revenues.
The successful EOR projects are seen as essential for future opportunities, enabling the state to build schools, provide tax relief, and fund vital projects like the Fargo diversion and water projects.
The urgency of the moment was stressed, with Ness emphasizing the need for the US to “crack the code on shale in America for oil dominance”. The enhanced oil recovery efforts are also expected to save the coal industry and utilize CO2 and rich natural gas in the process.
