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Technology, problem-solving keys to attracting more drillers to the Bakken, experts say

Lynn Helms, director of the North Dakota Department of Mineral Resources, talks about advancements in technology that are in the Bakken oil patch during the North Dakota Petroleum Council's annual meeting in Grand Forks. Joshua Komer / Forum News Service

GRAND FORKS — North Dakota's governor wants the state to produce 2 million barrels a day, but lower taxes on oil and better access to markets in the South mean the competition for drillers is tight, industry experts and state regulators said Tuesday, Sept. 26.

"We need, as problem-solvers, to figure out how we are going to convince capital back to the Bakken," Lynn Helms, director of the North Dakota Department of Mineral Resources, said Tuesday in Grand Forks. "There are still somewhere in the neighborhood of 50,000 wells to drill (in North Dakota), and we need to attract capital back into the Bakken to improve the recovery.

"A lot of that is going to be selling how we do technology in North Dakota."

Helms and others spoke at the Alerus Center during the Bakken Backers' portion of the North Dakota Petroleum Council's annual meeting. An advocacy coalition for the oil industry, Bakken Backers hosted Bakken 2.0, an education session on technological trends and economic investments from the oil industry.

That coincides with the NDPC's annual meeting, which will run through Thursday. The conference will host 20 panelists and speakers, including Helms, Gov. Doug Burgum and advisers to President Donald Trump.

North Dakota is home to the country's first oil shale play, with an estimated 600 billion barrels of oil in the Bakken. Only about 8 to 10 percent of that is recoverable with today's technology, said Kathy Neset, a geologist and president of oil field firm Neset Consulting Service.

But the move by producers in the Middle East to flood the market with oil caused commodity prices and drilling activity in the U.S. to plummet.

Since then, other shales have been tapped in southern states, including the Permian Basin in West Texas. By producing more than 2 million barrels a day, the Permian has been dubbed by the U.S. Energy Information Administration the most prolific oil production area in the country.

The Permian also is in a state with lower oil extraction taxes and is closer to refiners, meaning it is in competition with North Dakota and others with oil shales for drillers, NDPC President Ron Ness said during a meeting with the Herald Editorial Board.

Still, North Dakota is making advances in technology that will make oil companies take another look at the Bakken, Ness said.

"It's a technology play," he said.

In July during the Bakken Conference and Expo in Bismarck, Burgum challenged the industry to produce 2 million barrels a day in North Dakota. The all-time high for the state was roughly 1.2 million in December 2014, and the state has been averaging a little more than a million in the last several months, according to the DMR.

Ness said he was not consulted by Burgum before the governor made his challenge and he is unaware of Burgum's plans to make that a reality.

"We'll see what he has to say tomorrow morning," Ness said. "My sense is that it is an open challenge."

But it's not impossible, Ness said, pointing to graphics from the North Dakota Pipeline Authority that highlight the state's potential to hit that benchmark in the 2030s. He also noted research by the Energy and Environmental Research Center has advanced efforts to extract oil more efficiently and at a lower cost.

"A governor who puts out a goal of doubling oil production, a president who wants you to produce oil, I think that means a lot to (oil company) boardrooms," Ness said. "I think that is a big step."

April Baumgarten

April Baumgarten joined the Grand Forks Herald May 19, 2015, and covers business and political stories. She grew up on a ranch 10 miles southeast of Belfield, where her family continues to raise registered Hereford cattle. She double majored in communications and history/political science at Jamestown (N.D.) College, now known as University of Jamestown. During her time at the college, she worked as a reporter and editor-in-chief for the university's newspaper, The Collegian. Baumgarten previously worked for The Dickinson Press as the Dickinson city government and energy reporter in 2011 before becoming the editor of the Hazen Star and Center Republican. She then returned to The Press as a news editor, where she helped lead an award-winning newsroom in recording the historical oil boom.

Have a story idea? Contact Baumgarten at 701-780-1248.

(701) 780-1248
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