6 ms·

New Boom Reshapes Oil World, Rocks North Dakota

79 points by cellis 15y ago

to3m 15y ago
"Two years ago, America was importing about two thirds of its oil. Today, according to the Energy Information Administration, it imports less than half." This theory does not appear to be borne out by the figures - the interested reader is invited to consult this week's EIA petroleum balance sheet: http://205.254.135.24/pub/oil_gas/petroleum/data_publications/weekly_petroleum_status_report/current/pdf/table1.pdf http://205.254.135.24/pub/oil_gas/petroleum/data_publication... Domestic production is about 10% higher than in 2007, but rows 14, 4 and 1 in the Petroleum Supply table nevertheless suggest that America continues to import roughly two thirds (or maybe it is more like ten twenty-sevenths?) of the oil used.
- WildUtah 15y ago
  You need to add in the Natural Gas Liquids (oil that is dissolved in hot natural gas and liquifies on cooling) and other fuels from lines 15-20. America is burning about 18 million barrels per day (mbpd), down from about 21 mbpd in 2005-2006, and producing about 9 mbpd with conventional oil production declining (even including North Dakota's Bakken) and off-shore and deep off-shore compensating. America is one of the world's largest producers with Russia and Saudi Arabia also in the 9 mbpd range. Together the top three account for almost a third of world capacity. The next largest producers are significantly smaller. Of course, Russia and Saudi Arabia are exporters. America's per capita usage and per dollar of income usage is absurdly high compared to the rest of the world. If America wants to invest in efficiency, it could be a net exporter again with current technology and a 10-20 year investment in more efficient machines and better quality infrastructure. Unfortunately, American government seems to have chosen to drive head-on at 100mph into a worldwide peak production crisis.
  - jey 15y ago
    > America is burning about 18 million barrels per day (mbpd), down from about 21 mbpd in 2005-2006 Interesting. What accounts for the decline?
    - InclinedPlane 15y ago
      Price increases and the economic downturn.
    - to3m 15y ago
      There was a recession. Unemployment is 9%. Outside the US, oil is >$100/bl (this will affect the import price). These things can dampen demand.
    - mgkimsal 15y ago
      Certainly as others have said the major economic downturn has contributed to this. I do wonder what effect energy savings programs from the past few years have helped as well. I'm thinking about things like CFLs, better energy saving appliances, etc. But... what effect do those have on barrels of oil? Perhaps none. I'm not enough of an energy geek to know. :/
      - fleitz 15y ago
        Most of the fossil fuel that's burned to produce electricity is natural gas or coal. Natural gas is generally for smaller production more variable production (peak load) and coal for larger base load demands.
    - chicagobob 15y ago
      cash for clunkers got a statistically signification number of poor milage cars off the road, that also helped with our nations oil consumption.
      - ars 15y ago
        But caused a significantly greater demand for energy to make new cars. If it was worth it to trade your guzzler for a new car people would do it on their own without incentives. But a new car uses more energy than it saves for many many years. It's only worth it when the old car dies.
        cellularmitosis 15y ago
  - to3m 15y ago
    Ah, yes, thank you. I'm not sure I'd personally count refinery processing gain as crude oil production, but perhaps that is how things are done.
protomyth 15y ago
It is a little unreal driving in western ND. The roads are full of trucks (worse traffic than the last time I was in Chicago). McDonalds is starting at $15/hr, Wal-Mart cannot hire enough people to stock the shelves, and rent on a one bedroom is around $2100 if you can get it. Counties are now trying to figure out what to do about sewage treatment, and the projects in Devils Lake ND (eastern ND) to mitigate the flooding are slowed by years because of lack of trucks to hire. The amount of oil being produced is expected to double on the conservative estimate and it looks like ND will go from #4 to #2 state in the next year.
LargeWu 15y ago
I'm concerned what will happen when they run out of wells to drill. The area has seen an oil boom before, but nothing like this. 5 years ago the town of Stanley had about 1,500 residents. Today it has over 10,000, many of those in temporary housing. Williston has put a moratorium on any further expansion because they simply can't handle any more people. There's a lot of jobs and money around, but it's a mixed blessing for sure. When the oil dries up, and it will someday, a lot of these towns are going to get hit really hard.
- protomyth 15y ago
  People will move on and hopefully the cities will bank the money. Farming will go back to its #1 position. If they conserve their cash, the towns will be fine. If they spend like a drunken sailor, or worse, borrow heavy, then there will be problems.
  - _delirium 15y ago
    I'm not sure the towns will be fine even if they conserve their cash. When the oil jobs decline, there will be no reason for that many people to live there, so the population will likely decline precipitously (as with any boom town), which tends to produce social problems and a general feeling of malaise (not to mention abandoned buildings).
    - protomyth 15y ago
      It's the second time around for most of these towns and there is another industry. A lot of the people will move on, but I think the folks in that area are pretty resilient. That all said, it will probably be a number of years before it goes away.
  - stinkytaco 15y ago
    Except as they add infrastructure and upgrade existing roads, utilities, etc, they also add long term upkeep costs. When the oil goes away and people leave you're left with roads and sewers to maintain, people to lay off at Wal-Mart and McDonalds and lots of empty housing to depress real estate prices. That's why boom cycles seem so often to be followed by serious bust, because boom creates long term costs.
hardik 15y ago
I am surprised there is no mention of environmental impact of fracking and that some countries are planning to ban it.
- josefresco 15y ago
  In the comments a user mentioned the documentary that covers this impact called Gasland: http://en.wikipedia.org/wiki/Gasland http://en.wikipedia.org/wiki/Gasland I recommend it higly to my fellow HNers.
justsee 15y ago
Is there any other energy-extraction process so mind-numbingly primitive and destructive? After doing a little research on fracking recently I honestly can't think of any. Pumping millions of gallons of chemical-laced water under high pressure to fracture geological formations and extract gas is akin to fishing with dynamite, but the long-term environmental implications are far, far worse. Because once the underground aquifers which form part of the groundwater table are disrupted / damaged they can't be fixed. The water table becomes contaminated with fracking chemicals and the gas the process is meant to extract. What does contamination of a region's water table look like over generations? Apart from the risk to fresh water, there's also (unsurprisingly) concern over geological instability from the process. A few months ago a fracking company operating in the UK (Cuadrilla Resources) was forced to stop after two mini-earthquakes were linked to their activities: http://www.guardian.co.uk/uk/2011/jun/01/blackpool-earthquake-tremors-gas-drilling http://www.guardian.co.uk/uk/2011/jun/01/blackpool-earthquak... In France the practice is banned, and in Australia a national coalition of farmers, scientists, environmental and community groups ( http://lockthegate.org.au/ http://lockthegate.org.au/ ) has formed to oppose the spread of gas wells through prime agricultural land. The big story with fracking is the long-term economic downside. So it's disappointing that the NPR article almost solely focuses on the short-term economic upside.
- josefresco 15y ago
  For a nice summary of the issues in the US, watch Gasland; http://en.wikipedia.org/wiki/Gasland http://en.wikipedia.org/wiki/Gasland My wife and I enjoyed it immensely, or as much as you can enjoy a documentary about how we're destroying our own water.
  - anamax 15y ago
    From http://en.wikipedia.org/wiki/Gasland http://en.wikipedia.org/wiki/Gasland "Dave Neslin, Director of the Colorado Oil & Gas Conservation Commission, offered to speak on camera with Gasland director Josh Fox during filming. Neslin requested that he be allowed to review any material that would be used in the film because "the issues are technical and complex and arouse concerns in many people." The statement concludes that "Such a discussion might have prevented the inaccuracies [in COGSS's opinion] noted above." Director Fox refused those terms, which would have given editorial control to COGCC for this segment of the documentary.[9] Letting someone know what you're going to talk with him about is not giving editorial control, it's just letting someone prepare.
baltcode 15y ago
Does anybody know of jobs for computational scientists, programmers, and techies in these industries for people over here who wouldn't mind moving to ND for a few years?
- brianbreslin 15y ago
  2 second google showed this http://www.ndoiljobs.com/ http://www.ndoiljobs.com/ but I bet there are analyst jobs to be had writing software to manage operations.
  - rdouble 15y ago
    Those types of jobs are done at the company HQs which are mostly in Houston.
- rdouble 15y ago
  No. I live near Grand Forks and ND is definitely not a hot spot for programmers. Fargo always has jobs for people skilled with Microsoft tech as Great Plains was started there and turned into a Microsoft campus. There are scattered embedded systems and IT style jobs throughout the state. I've never seen anything advertised out by Williston. Outside of Fargo, the pay for programming jobs is very low, even by North Dakotan standards.
  - baltcode 15y ago
    I guess they would use some embedded systems/instrumentation stuff to run the equipment.
ojbyrne 15y ago
Enjoyed the article, I couldn't help be reminded that the same thing (but at 10x scale) has been going on in Canada (the tar sands) for at least a decade.
Joakal 15y ago
Huge list of resources by 4 Corners on Fracking related to Australia. http://www.abc.net.au/4corners/content/2011/s3144681.htm http://www.abc.net.au/4corners/content/2011/s3144681.htm
tryitnow 15y ago
Remember the choice isn't between dirty oil/gas and a wonderful future of clean/green fuel and no damage to the environment. Transitioning to alternative energy sources is incredibly expensive - it will be a major drain on the economy to do so because alt fuels are still struggling to hit grid parity and we still don't have a serious way to reduce oil consumption for gasoline. So the choice is really between 1) Oil and gas extraction using new technologies with all the attendant risks (and there many) 2) Forget the new technologies and continue to rely more and more on unstable oppressive regimes (Middle East, Russia, etc) 3) Take a major hit to economic growth and aggressively push alternative fuels. I would recommend (1). Option (2) leads to greater geopolitical instability and very significant long-term risks. Option (3) will undermine economic growth at a time when there is consensus that growth is a priority. Obviously, this is grossly simplified, but my general point is that we have a limited option set and in truth, none are very attractive. Three rotten apples, we're starving and we must eat one, let's pick the least rotten one.

79 points by cellis 15y ago

to3m 15y ago

"Two years ago, America was importing about two thirds of its oil. Today, according to the Energy Information Administration, it imports less than half." This theory does not appear to be borne out by the figures - the interested reader is invited to consult this week's EIA petroleum balance sheet: http://205.254.135.24/pub/oil_gas/petroleum/data_publications/weekly_petroleum_status_report/current/pdf/table1.pdf http://205.254.135.24/pub/oil_gas/petroleum/data_publication... Domestic production is about 10% higher than in 2007, but rows 14, 4 and 1 in the Petroleum Supply table nevertheless suggest that America continues to import roughly two thirds (or maybe it is more like ten twenty-sevenths?) of the oil used.

WildUtah 15y ago
You need to add in the Natural Gas Liquids (oil that is dissolved in hot natural gas and liquifies on cooling) and other fuels from lines 15-20. America is burning about 18 million barrels per day (mbpd), down from about 21 mbpd in 2005-2006, and producing about 9 mbpd with conventional oil production declining (even including North Dakota's Bakken) and off-shore and deep off-shore compensating. America is one of the world's largest producers with Russia and Saudi Arabia also in the 9 mbpd range. Together the top three account for almost a third of world capacity. The next largest producers are significantly smaller. Of course, Russia and Saudi Arabia are exporters. America's per capita usage and per dollar of income usage is absurdly high compared to the rest of the world. If America wants to invest in efficiency, it could be a net exporter again with current technology and a 10-20 year investment in more efficient machines and better quality infrastructure. Unfortunately, American government seems to have chosen to drive head-on at 100mph into a worldwide peak production crisis.
- jey 15y ago
  > America is burning about 18 million barrels per day (mbpd), down from about 21 mbpd in 2005-2006 Interesting. What accounts for the decline?
  - InclinedPlane 15y ago
    Price increases and the economic downturn.
  - to3m 15y ago
    There was a recession. Unemployment is 9%. Outside the US, oil is >$100/bl (this will affect the import price). These things can dampen demand.
  - mgkimsal 15y ago
    Certainly as others have said the major economic downturn has contributed to this. I do wonder what effect energy savings programs from the past few years have helped as well. I'm thinking about things like CFLs, better energy saving appliances, etc. But... what effect do those have on barrels of oil? Perhaps none. I'm not enough of an energy geek to know. :/
    - fleitz 15y ago
      Most of the fossil fuel that's burned to produce electricity is natural gas or coal. Natural gas is generally for smaller production more variable production (peak load) and coal for larger base load demands.
  - chicagobob 15y ago
    cash for clunkers got a statistically signification number of poor milage cars off the road, that also helped with our nations oil consumption.
    - ars 15y ago
      But caused a significantly greater demand for energy to make new cars. If it was worth it to trade your guzzler for a new car people would do it on their own without incentives. But a new car uses more energy than it saves for many many years. It's only worth it when the old car dies.
      - cellularmitosis 15y ago
- to3m 15y ago
  Ah, yes, thank you. I'm not sure I'd personally count refinery processing gain as crude oil production, but perhaps that is how things are done.

protomyth 15y ago

It is a little unreal driving in western ND. The roads are full of trucks (worse traffic than the last time I was in Chicago). McDonalds is starting at $15/hr, Wal-Mart cannot hire enough people to stock the shelves, and rent on a one bedroom is around $2100 if you can get it. Counties are now trying to figure out what to do about sewage treatment, and the projects in Devils Lake ND (eastern ND) to mitigate the flooding are slowed by years because of lack of trucks to hire. The amount of oil being produced is expected to double on the conservative estimate and it looks like ND will go from #4 to #2 state in the next year.

LargeWu 15y ago

I'm concerned what will happen when they run out of wells to drill. The area has seen an oil boom before, but nothing like this. 5 years ago the town of Stanley had about 1,500 residents. Today it has over 10,000, many of those in temporary housing. Williston has put a moratorium on any further expansion because they simply can't handle any more people. There's a lot of jobs and money around, but it's a mixed blessing for sure. When the oil dries up, and it will someday, a lot of these towns are going to get hit really hard.

protomyth 15y ago
People will move on and hopefully the cities will bank the money. Farming will go back to its #1 position. If they conserve their cash, the towns will be fine. If they spend like a drunken sailor, or worse, borrow heavy, then there will be problems.
- _delirium 15y ago
  I'm not sure the towns will be fine even if they conserve their cash. When the oil jobs decline, there will be no reason for that many people to live there, so the population will likely decline precipitously (as with any boom town), which tends to produce social problems and a general feeling of malaise (not to mention abandoned buildings).
  - protomyth 15y ago
    It's the second time around for most of these towns and there is another industry. A lot of the people will move on, but I think the folks in that area are pretty resilient. That all said, it will probably be a number of years before it goes away.
- stinkytaco 15y ago
  Except as they add infrastructure and upgrade existing roads, utilities, etc, they also add long term upkeep costs. When the oil goes away and people leave you're left with roads and sewers to maintain, people to lay off at Wal-Mart and McDonalds and lots of empty housing to depress real estate prices. That's why boom cycles seem so often to be followed by serious bust, because boom creates long term costs.

hardik 15y ago

I am surprised there is no mention of environmental impact of fracking and that some countries are planning to ban it.

josefresco 15y ago
In the comments a user mentioned the documentary that covers this impact called Gasland: http://en.wikipedia.org/wiki/Gasland http://en.wikipedia.org/wiki/Gasland I recommend it higly to my fellow HNers.

justsee 15y ago

Is there any other energy-extraction process so mind-numbingly primitive and destructive? After doing a little research on fracking recently I honestly can't think of any. Pumping millions of gallons of chemical-laced water under high pressure to fracture geological formations and extract gas is akin to fishing with dynamite, but the long-term environmental implications are far, far worse. Because once the underground aquifers which form part of the groundwater table are disrupted / damaged they can't be fixed. The water table becomes contaminated with fracking chemicals and the gas the process is meant to extract. What does contamination of a region's water table look like over generations? Apart from the risk to fresh water, there's also (unsurprisingly) concern over geological instability from the process. A few months ago a fracking company operating in the UK (Cuadrilla Resources) was forced to stop after two mini-earthquakes were linked to their activities: http://www.guardian.co.uk/uk/2011/jun/01/blackpool-earthquake-tremors-gas-drilling http://www.guardian.co.uk/uk/2011/jun/01/blackpool-earthquak... In France the practice is banned, and in Australia a national coalition of farmers, scientists, environmental and community groups ( http://lockthegate.org.au/ http://lockthegate.org.au/ ) has formed to oppose the spread of gas wells through prime agricultural land. The big story with fracking is the long-term economic downside. So it's disappointing that the NPR article almost solely focuses on the short-term economic upside.

josefresco 15y ago
For a nice summary of the issues in the US, watch Gasland; http://en.wikipedia.org/wiki/Gasland http://en.wikipedia.org/wiki/Gasland My wife and I enjoyed it immensely, or as much as you can enjoy a documentary about how we're destroying our own water.
- anamax 15y ago
  From http://en.wikipedia.org/wiki/Gasland http://en.wikipedia.org/wiki/Gasland "Dave Neslin, Director of the Colorado Oil & Gas Conservation Commission, offered to speak on camera with Gasland director Josh Fox during filming. Neslin requested that he be allowed to review any material that would be used in the film because "the issues are technical and complex and arouse concerns in many people." The statement concludes that "Such a discussion might have prevented the inaccuracies [in COGSS's opinion] noted above." Director Fox refused those terms, which would have given editorial control to COGCC for this segment of the documentary.[9] Letting someone know what you're going to talk with him about is not giving editorial control, it's just letting someone prepare.

baltcode 15y ago

Does anybody know of jobs for computational scientists, programmers, and techies in these industries for people over here who wouldn't mind moving to ND for a few years?

brianbreslin 15y ago
2 second google showed this http://www.ndoiljobs.com/ http://www.ndoiljobs.com/ but I bet there are analyst jobs to be had writing software to manage operations.
- rdouble 15y ago
  Those types of jobs are done at the company HQs which are mostly in Houston.
rdouble 15y ago
No. I live near Grand Forks and ND is definitely not a hot spot for programmers. Fargo always has jobs for people skilled with Microsoft tech as Great Plains was started there and turned into a Microsoft campus. There are scattered embedded systems and IT style jobs throughout the state. I've never seen anything advertised out by Williston. Outside of Fargo, the pay for programming jobs is very low, even by North Dakotan standards.
- baltcode 15y ago
  I guess they would use some embedded systems/instrumentation stuff to run the equipment.

ojbyrne 15y ago

Enjoyed the article, I couldn't help be reminded that the same thing (but at 10x scale) has been going on in Canada (the tar sands) for at least a decade.

Joakal 15y ago

Huge list of resources by 4 Corners on Fracking related to Australia. http://www.abc.net.au/4corners/content/2011/s3144681.htm http://www.abc.net.au/4corners/content/2011/s3144681.htm

tryitnow 15y ago

Remember the choice isn't between dirty oil/gas and a wonderful future of clean/green fuel and no damage to the environment. Transitioning to alternative energy sources is incredibly expensive - it will be a major drain on the economy to do so because alt fuels are still struggling to hit grid parity and we still don't have a serious way to reduce oil consumption for gasoline. So the choice is really between 1) Oil and gas extraction using new technologies with all the attendant risks (and there many) 2) Forget the new technologies and continue to rely more and more on unstable oppressive regimes (Middle East, Russia, etc) 3) Take a major hit to economic growth and aggressively push alternative fuels. I would recommend (1). Option (2) leads to greater geopolitical instability and very significant long-term risks. Option (3) will undermine economic growth at a time when there is consensus that growth is a priority. Obviously, this is grossly simplified, but my general point is that we have a limited option set and in truth, none are very attractive. Three rotten apples, we're starving and we must eat one, let's pick the least rotten one.