UPDATE 3-US doubles oil reserve estimates at Bakken, Three Forks shale
By Patrick Rucker and Valerie Volcovici
WASHINGTON, April 30 (Reuters) - An oil-rich region of the north-central United States holds more than twice the recoverable crude supplies estimated just five years ago, according to a government study that highlights the nation's march toward energy self-sufficiency.
The Bakken Formation and Three Forks Formation, which spans parts of Montana, North Dakota and South Dakota together hold an estimated 7.4 billion barrels of undiscovered, technically recoverable oil, the U.S. Geological Survey study said, although energy experts said those estimates likely understate the region's full potential.
That total is more than double the previous estimate, from 2008, and officials said it is a building block towards energy independence.
"These world-class formations contain even more energy resource potential than previously understood, which is important information as we continue to reduce our nation's dependence on foreign sources of oil," Interior Secretary Sally Jewell said in prepared remarks.
Besides the crude reserves, the two formations hold a mean estimate of 6.7 trillion cubic feet of as-yet undiscovered natural gas and 530 million barrels of natural gas liquids that are within reach. In both cases those represent a nearly three-fold increase from the previous tally.
Officials said the overall jump in reserves was chiefly due to production now thought to be accessible in the Three Forks Formation, in the southern edge of North Dakota, which had not been tallied in the last study.
"Three Forks is up and coming," said Brenda Pierce, coordinator for the Energy Resources Program at the U.S. Geological Survey (USGS).
Rapid development in the Three Forks region means that recoverable reserves are higher than the USGS estimate, energy experts said.
"We agree with the range of numbers and think the high estimate of 11 billion barrels is a reasonable target as technology and exploration of the Three Forks continues," said Lynn Helms, director of the North Dakota Department of Mineral Resources, referring to the upper end of the USGS estimate.
Dr. Don Van Nieuwenhuise, head of the geosciences program at University of Houston, said the USGS numbers are conservative as they are based on looking at "sweet spots" within the formation.
"There are chances there are sweet spots they don't know about. The prospects of finding additional sweet spots in an area this size is relatively high," he said. "I'm pretty sure every drop they say you're going to find, you'll find."
New drilling technologies like hydraulic fracturing, or fracking, have turned the Bakken Formation and Three Forks into one of the nation's most important sources of domestic crude.
4,000 WELLS IN THE BASIN
Since the 2008 USGS assessment more than 4,000 wells have been drilled in the Williston Basin, the area that contains the formations.
Seven companies now producing oil in the region provided data to the USGS about the latest technologies and recovery rates in the region, including Marathon Oil and Sinclair Oil Corp.
The USGS considers the Bakken and Three Forks to be the largest continuous oil formation in the continental United States.
The expanded estimates came hours after Saudi Arabia's energy minister gave a speech in Washington in which he said oil supplies are "coming from everywhere." Saudi Arabia thus "has no plans" to dramatically boost oil production capacity, said the kingdom's Ali al-Naimi.
During a conference call with reporters, Jewell said that the Interior Department's Bureau of Land Management would soon present long-anticipated draft rules to govern fracking on federal land.
"Certainly in a matter of weeks, not months," Jewell said, noting that Interior received over 100,000 comment letters when an unfinished draft of the rules was presented.
"There has been sufficient change to warrant another public comment period," said Jewell, just weeks into her job as the nation's chief steward for public lands.
The oil and gas industry, which already has extensive drilling on federal land, worries that new fracking rules could curtail development. Environmentalists warn that existing fracking rules are not stringent enough to curb pollution.
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