Oil Boom In 2011

The oil industry activity in the MonDak region increased in 2011 more than anyone ever imagined. The recent activity being called a boom had everyone skeptical, but the refinement of horizontal drilling combined with hydraulic fracturing, called fracking, has made this boom possible.

During the current boom the workers have come ahead of the infrastructure and the region is scrambling to accommodate but sometimes with hesitancy. Many remember the region’s last boom 30 years ago. When crude prices dropped, oil companies fled, sticking the locals with the taxes for all the improvements and many empty buildings.

Oil companies have been able to drill for previously inaccessible reserves trapped inside shale formations with the new technology called hydraulic fracturing. Though controversial, experts estimate the fracking method will provide access to an astounding two billion barrels of oil in the Bakken field.

According to North Dakota Dept. of Natural Resources, the Bakken Formation is estimating now about 18,000 square miles of western North Dakota, another 6,000 square miles in Montana, Saskatchewan and Manitoba that is mature oil-source rock. In the last 1½ years, there was not a single dry hole that was drilled.

Currently, North Dakota is at 200 rigs, producing almost 500,000 barrels a day at this time and each one can drill a well a month at an average cost of $7 million per well with about 2,000 wells coming in the near future.

2011 started shaping up to be a strong year for Montana. Montana Board of Oil and Gas was flooded with drilling permit applications. According to officials, oil and gas permits were predicted to be more than 300 permits this year with a substantial increase in leasing activity in Richland and Roosevelt counties.

Montana has nine rigs, with more coming. With fewer counts in Montana, Montana’s Bakken is producing roughly $1.2 billion worth of oil per year.

Oil companies are investing billions to build oil loading rail facilities near Bainville, MT, Trenton and Dore, N D, with a natural gas loading plant near Trenton. These types of facilities help with the transport of oil products. such as crude oil and natural gas.

Construction is now being done to complete three natural gas processing facilities and gathering pipelines in western North Dakota. In July, Oneok Partners, a Tulsa, Okla. based company, announced plans to build a multi-million dollar natural gas liquids pipeline through the region.

The increased activity in the Bakken has created challenges for everyone. Housing shortages, lack of local labor workforce, increased traffic and destruction of roadways are among the first to be listed. Even homelessness is an issue as there are no official homeless shelters.

While North Dakota seems onboard to help counties with communities in the hub of the oil boom, Montana’s oil and gas revenue is allocated differently. The state gets half, schools 20% and the county 19%. Seemly unfair, the city, which has to pay for almost all the growth, receives just one-tenth of 1%.

Communities are profiting economically but face shortages of manpower, workers, and housing. They are approaching the challenges hoping for a more orderly sustainable growth.