Fracking to Reduce Oil Imports by Half Over 5 Years: Saudi Oil Nearly Depleted?

As we hear that Saudia Arabia may have “overstated” their oil reserves by 40%, the news comes today of a fairly new and successful drilling technique that can reduce U.S. oil imports by half over a five year period. Unemployment in North Dakota has reached the lowest level in the U.S.  It’s a bit like the oil boom. Camps are erected to house workers, and the men are complaining of a lack of eligible women.

Liberals, right on target, are questioning the technique of drilling “down” and “over,”, with the proper name of hydraulic fracturing (“fracking) to extract natural gas trapped in shale. The process thought not to be viable for drilling oil, is being rethought today, and experts believe it may “transform” the oil drilling business in just a few years.

“They drill down and horizontally into the rock, then pump water, sand and chemicals into the hole to crack the shale and allow gas to flow up.”

This new drilling is expected to raise U.S. production by at least 20 percent over the next five years. And within 10 years, it could help reduce oil imports by more than half, advancing a goal that has long eluded policymakers.

“That’s a significant contribution to energy security,” says Ed Morse, head of commodities research at Credit Suisse….

Petroleum engineers first used the method in 2007 to unlock oil from a 25,000-square-mile formation under North Dakota and Montana known as the Bakken. Production there rose 50 percent in just the past year, to 458,000 barrels a day, according to Bentek Energy, an energy analysis firm.

It was first thought that the Bakken was unique. Then drillers tapped oil in a shale formation under South Texas called the Eagle Ford. Drilling permits in the region grew 11-fold last year.

Now newer fields are showing promise, including the Niobrara, which stretches under Wyoming, Colorado, Nebraska and Kansas; the Leonard, in New Mexico and Texas; and the Monterey, in California….

In the Bakken formation production is rising so fast there is no space in pipelines to bring the oil to market. Instead, it is being transported to refineries by rail and truck. Drilling companies ave had to erect camps to house workers.

Unemployment in North Dakota has fallen to the lowest level in the nation, 3.8 percent — less than half the national rate of 9 percent. The influx of mostly male workers to the region has left local men lamenting a lack of women. Convenience stores are struggling to keep shelves stocked with food.

The Bakken and the Eagle Ford are each expected to ultimately produce 4 billion barrels of oil. That would make them the fifth- and sixth-biggest oil fields ever discovered in the United States.

Two New York towns have watched their state ban “fracking,” and now the residents of Lumberland and Highland are thinking of trying to thwart the state’s desires to keep them drilling-free.

“Is it really true, as we’ve been told for years, that there’s nothing we can do?” asks Carol Roig, a grant writer in Barryville. “The DEC said that. Town attorneys said that. The New York State Association of Towns said that.”

“It was almost like a hypnotic mantra,” agrees former Times Herald-Record reporter Debbie Conway of Barryville, whose home sits on the banks of the river. “There’s nothing you can do, don’t even try.”

The folks in these river towns on top of the gas-rich Marcellus shale — with more deer on their roads than trucks — decided the stakes were too high not to do something.

“This is a large-scale industry about to come into our region,” says Peter Comstock, head of Lumberland’s Homestead School and chairman of the Lumberland Advisory Committee on Energy and the Environment. “We had to do something.”

So Highland and Lumberland looked for answers on how to control their drilling destiny. Rep. Steve Israel (R-NY-2nd) explains how these New York towns may gain some control over their destiny:

All of it very good news. Environmentalists fear fluids or wastewater can pollute drinking water, but previous tests have rendered the method safe.  The article is on fracking is comprehensive. Read it here.

The story about Saudia Arabia comes from WikiLeaks cables. Fears that the country is in short supply of crude oil, the cables showed alarm that the country may not be able to control prices – and may reach a peak in output as early as 2012.  The Oil Drum has dug deeper in the Saudi Arabia revelation.