The Midwest/Plains Oil Boom Thread

[chuck_nbc]

First gambling and now oil..Ohio is "booming"..

[desertpunk]

Oil Boom In North Dakota!

Thick, black, swirling dirty crude. Who's got it? Why North Dakota has it...and in HUGE quantities:

WSJ

ECONOMY

Oil Industry Booms -- in North Dakota

State Is Riding High as Firms Develop Better Ways to Tap Huge Bakken Shale Deposit, Raising Hopes for U.S. Production

By BEN CASSELMAN
KILLDEER, N.D.—A massive oil reserve buried two miles underground has put North Dakota at the center of a revolution in the U.S. oil industry, a shift that has radically altered the fortunes of this remote area.

The Bakken Shale deposit has been known and even tapped on occasion for decades. But technological improvements in the past two years have taken what was once a small, marginally profitable field and turned it into one of the fastest-growing oil-producing areas in the U.S.

The Bakken Shale had helped North Dakota oil production double in the past three years, surging to 80 million barrels in 2009—tiny relative to the more than seven billion barrels consumed by the U.S. every year, but enough to vault the state past Oklahoma and Louisiana to become the country's fourth-biggest oil producer, after Texas, Alaska and California. If current projections hold, North Dakota's oil production could pass Alaska's by the end of the decade.

"Most people felt like they could kind of write off the oil industry in the U.S., and that's just a long way from the truth," said Harold Hamm, chairman and chief executive of Continental Resources Inc., one of the biggest Bakken producers. "The fact of the matter is that a lot of people quit looking for oil." Continental reported Thursday that its North Dakota oil production doubled in 2009 and would continue to grow rapidly this year.

The Bakken Shale could contain up to 4.3 billion barrels of recoverable oil, according to the U.S. Geological Survey. That would make it the biggest oil field discovered in the contiguous U.S. in more than 40 years—and many in the industry believe the amount of recoverable oil could be even greater as new technology allows companies to tap more of it. [some project as much as 50 bln barrels of shale oil]

U.S. oil production has fallen by nearly 50% since its peak in the 1970s. Even with the Bakken Shale, U.S. oil production isn't expected to ever return to 1970s levels, and even the most optimistic projections of production from the North Dakota field don't account for more than a small fraction of total U.S. oil demand. But new production from the Bakken Shale, combined with other big oil discoveries in California and the Gulf of Mexico, helped U.S. oil production rise last year for the first time since 1991, according to U.S. government figures.

Production has grown so rapidly here, 100 miles south of the Canadian border, that companies had to build a rail line to transport their oil to market, since there wasn't a big enough pipeline in the state to handle the oil. Companies have scrambled to find labor in a state with fewer than a million people, and to keep drilling rigs running when the wind chill pushes temperatures to 50 degrees below zero. Booming Bakken oil production has helped North Dakota escape the worst of the economic downturn. The state's unemployment rate was 4.3% in December—more than five percentage points below the national level—and the state government projects a surplus for the current budget cycle.

[...]

Oil booms: horrifying liberals since 1859!

[desertpunk]

Williston ND in the far western end of the state, and a once slowly-dying rural agricultural community, is the epicenter of the oil boom in North Dakota.

image hosted on flickr

Approaching Williston, ND by mwahlsten, on Flickr

image hosted on flickr

Approaching Williston, ND Late by mwahlsten, on Flickr


http://www.businessinsider.com/youve...om-2012-3?op=1

image hosted on flickr

Williston, oil rig 09 by [IQ], on Flickr

image hosted on flickr

Williston, oil rig 07 by [IQ], on Flickr

image hosted on flickr

Rig by lindsey gee, on Flickr

image hosted on flickr

Stairs Up To Rig by lindsey gee, on Flickr

image hosted on flickr

Pipes by lindsey gee, on Flickr

[desertpunk]

The Bakken Shale Oil Formation

[desertpunk]

Over 33,000 new wells and 50,000 jobs may be needed to fully develop the Bakken in Western North Dakota. Spinoff economic activity could employ tens of thousands more. Williston is currently experiencing both housing shoratges and a construction boom for housing, schools, hotels and infrastructure.

[desertpunk]

SynergyStation

North Dakota Housing Needed for Bakken Workers

Aug. 14 2011

The population of Williston, ND is expected to rise from current levels of 13,000 in 2010 to over 65,000 by the year 2020. This puts a tremendous strain on the housing needs for the community as well as the long term community planning that is needed to develop viable, healthy neighborhoods for the residents of Williston.

---

[Pilliod Njaim]

So I guess North Dakota is going to end up with the nation's hottest job market.

[diablo234]

Originally Posted by Pilliod Njaim

So I guess North Dakota is going to end up with the nation's hottest job market.

Pretty much

I have heard the unemployment rate there is in the ballpark of around 3% thanks to the oil and gas industry.

[Bond James Bond]

Check out this chart of North Dakota oil production:
https://www.dmr.nd.gov/oilgas/stats/stateoilchart.pdf

Check out this video - jobs at McDonalds in Williston are going for $15/hour.
http://www.msnbc.msn.com/id/3032619/...93017#44393017

[Bond James Bond]

Damn - this is almost as pricey as Seattle:
http://www.realtor.com/realestateand...ource=hp#/pg-1

[usbmfa]

Yet they still have to deal with this crap.


BISMARCK, ND – The large increase in EPA and other industrial regulations enacted under President Obama’s administration are keeping the economy – and job creation – from growing, according to North Dakota Public Service Commissioner Kevin Cramer.

http://plainsdaily.com/entry/psc-kev...-job-creation/

[diablo234]

Originally Posted by Bond James Bond

Damn - this is almost as pricey as Seattle:
http://www.realtor.com/realestateand...ource=hp#/pg-1

Due to the (lack of) housing availability in the area there have been reports of people commuting in from places as far away as Minot which is 125 miles away.

[desertpunk]

Originally Posted by Bond James Bond

Check out this chart of North Dakota oil production:
https://www.dmr.nd.gov/oilgas/stats/stateoilchart.pdf

Check out this video - jobs at McDonalds in Williston are going for $15/hour.
http://www.msnbc.msn.com/id/3032619/...93017#44393017

They have no place to put all the oil! Pipelines are strained to capacity and new tank farms are going in but with a potential 50 bln barrels in the Bakken, there's going to be bottlenecks for quite some time. And housing is gone crazy due to the shortage. Guys are making $90k a year driving trucks and managing rigs. They can afford it...if they can find it.

[Paddington]

North Dakota deserves a boom, I guess. It's population has been mostly flat for 100 years. And it's a huge expanse of space, twice the size of Ohio, with only 672,000 people. Someone needs to live there and make some productive use of it.

[Bond James Bond]

The more I read about this, the bigger it's starting to sound.

200,000 new jobs!

LINK

Oil industry: Shale could generate 200,000 jobs
CantonRep.com staff report
Posted Sep 20, 2011 @ 11:33 PM

Expansion of Ohio’s oil and natural-gas business could generate 200,000 new jobs during the next three years.

The figure was tossed out Tuesday morning by oil industry associations during a press conference in the Statehouse. The five industry groups were joined by JobsOhio, a private nonprofit economic development agency created earlier this year by the Kasich administration.

The job growth projection is based on a study commissioned by the Ohio Oil & Gas Energy Education Program. Kleinhenz & Associates, a Cleveland-based economic research firm, did the study with help from Marietta College, Ohio State University, Central Ohio Technical College and Zane State College.

[...]

The 200,000 projected jobs could come from leasing, exploration, drilling, production and pipeline production associated with Utica shale development. The jobs could lead to a wage and personal income boost of $12 billion.

Meanwhile the report indicates that royalty payments could increase to as much as $1.6 billion by 2015, which is more than have been paid by the industry in Ohio over the past decade.

[...]

And some of the Big Boys are starting to acquire acreage here. First, Hess:

LINK

Hess In Back-to-Back Utica Deals
By Zacks Investment Research on September 12, 2011

Hess Corporation in on track to strengthen its traction in one of the emerging shale plays in the U.S. –– the Utica Shale –– by entering into a second transaction in a week. The company shelled out $750 million for the purchase of the 85,000 acre Marquette Exploration LLC and other leases in the same play.

The deal comes a day after the company agreed to jointly explore and develop 200,000 acres of CONSOL Energy Inc. in Utica Shale play in eastern Ohio. The joint venture agreement with CONSOL entitles Hess to acquire 50% interest of the former in Utica Shale for an aggregate consideration of $593 million. Upon closure, Hess will pay $59 million, while the balance $534 million will be expended in the form of a 50% drilling interest obligation over a five-year span. The transaction is expected to be completed next month, pending customary closing conditions.

Overall, the purchases give Hess an 185,000 net acreage position in Utica. The latest contract calls for Hess to operate in Jefferson, Harrison and Belmont counties with a 100% working interest. The company intends to commence the appraisal drilling operation in the fourth quarter.

[...]

Then Exxon (through its XTO subsidiary), and Chevron:

LINK

Chevron Takes Over Leases
Third major energy company to buy into area shale operations
September 20, 2011
By CASEY JUNKINS Staff Writer , The Intelligencer / Wheeling News-Register

WHEELING - The Marcellus and Utica shale formations continue drawing attention from giant oil companies, as Chevron Corp. now controls about 4,400 acres in Ohio County.

Chevron joins Hess Corp. and Exxon Mobil as global oil companies investing in the Ohio Valley, as Hess has spent $1.34 billion during the past few weeks to acquire acreage in eastern Ohio. Exxon subsidiary, XTO Energy, is now leasing Belmont County acreage at $4,950 per acre with 19 percent on production royalties.

"Having companies like Chevron and Exxon here gives credence to the shale plays," said Tim Greene, owner of Land and Mineral Management of Appalachia. "You assume they have the financial support to stand behind their deals."

According to records in the Ohio County Clerk's Office, California-based Chevron - a company that produced 2.76 million barrels of oil per day in 2010 - took over about 170 individual leases from AB Resources, the largest of which is a 713-acre parcel in the West Liberty area. Most of the acreage is in the northern and central portions of the county, primarily in the areas near West Liberty and Triadelphia.

[...]

Boom times are a-comin!

[Bond James Bond]

Originally Posted by desertpunk

Maybe someone could build a refinery or two in Ohio to help boost distillate supplies and employ some more people.

That might be coming soon. Would share resources with the Marcellus shale. Contenders are PA, OH and WV.

Shell Oil Co. is nearing a decision on where in the Appalachians to build a huge new petrochemical refinery -- a project that could bring thousands of construction and production jobs and change the face of the region for decades.

The plans are driven by the vast natural gas reserves discovered in the Marcellus Shale, a deep formation that lies beneath New York, Pennsylvania, Ohio, West Virginia and parts of other states.

The scale of the multibillion-dollar project is unlike anything seen for decades in the region, said David Hounshell, a professor of technology and social change at Carnegie Mellon University.

[...]

The industrial complex would likely attract many smaller, specialized chemical plants, since the main product, ethylene, is then used to produce chemicals that go into everything from plastics to tires to antifreeze, according to the American Chemistry Council.

The council, in a recent report, estimated the new petrochemical complex could attract up to $16 billion in private investment and create more than 17,000 jobs and billions in tax revenue. Shell's investment alone could be "several billion," op de Weegh said.

Other U.S. and overseas companies are also considering similar projects in the region, so there could be more than one complex.

[diablo234]

A video showing new construction taking place in Williston.

[diablo234]

In addition Eastern Montana is expected to benefit as well from the Bakken Formation.

Oil Boom Could Be Headed To Eastern Montana
By Christian Hauser
chauser@keci.com
POSTED: 7:11 pm MDT May 4, 2011
http://www.nbcmontana.com/news/27781025/detail.html

MISSOULA, MT -- Oil is making a resurgence in Montana. The number of applications for drilling permits is on the rise for 2011. That rise could mean jobs and money coming into the Montana for decades to come. In the first of a three-part series, NBC Montana went to eastern Montana to find out the future of oil production for the Treasure State.
On the plains of western North Dakota there is no recession. Jobs are plentiful and housing is in short supply. It's due to the Bakken oil play. By most accounts the largest reserve of oil in the country. Reserves that extend from western North Dakota, through northeastern Montana and into southern Canada.
Harold Hamm, head of one of the biggest oil companies developing the area, Continental Resources, says Montana's time has come.
Hamm says, "It's taken a lot of time to, number one, break the code and prove the commerciality of these formations. So it's happened a little slower than most fields would come into existence."
Originally, geologists estimated the Bakken to hold about 150 million barrels of oil. That all changed in 1999 when Billings geologist Dick Findley devised a way to make a 90-degree turn two miles below the earth's surface and fracture shale rock. The oil came pouring out.
David Galt heads up Montana's Petroleum Association. Galt says, "This whole idea of shale oil and shale gas has been a game changer for domestic oil production."
Montana saw a boom from those first wells, but then the bottom fell out. Galt adds, "Oil was at $140 a barrel in the national or global market and nobody thought that could fall and it fell. You know we were getting $27 a barrel out of the Williston Basin and nobody was investing."
But then there was good news from the U.S. Geological Survey. Geologists took another look and upped their Bakken estimates from the previous 150 million to more than four billion barrels of oil. At today's prices, $110 a barrel, that would be over $440 billion worth of oil.

click here to continue

[Xusein]

Too bad for those jobs, you have to live in a place that is a windswept tundra for half the year that is like a day away from any real cities.

So lame that the "booming" parts of the country are often the most isolated.

[araman0]

Having a town base so much of its economy on a single industry can be very scary stuff. What happens if after 20 years the oil dries up there?

Also the new construction appears to all be sprawl, with very little if anything occurring closer to downtown. The center of the city looked abandoned in that video.