Best of the Week
Most Popular
1.Stock Market in DANGER of Strangling the Bears to Death - Nadeem_Walayat
2. Germany Pivoting East, Exit US Dollar, Enter Gold Standard - Jim_Willie_CB
3.Flight MH17 – Kiev Flash Mob's Last False Flag? - Andrew_McKillop
4.Stock Market Crash Nightmare! - Nadeem_Walayat
5.Gold - The Million DOLLAR Question... - Rambus_Chartology
6.Gold And Silver – BRICS And Germany Will Pave The Way - Michael_Noonan
7.The Jewish Selfish Gene, People Chosen by God, Everyone Else is Goyim to Kill - Nadeem_Walayat
8.The Israeli Promised Land Dream - The Criminal Roadmap Towards “Greater Israel”? - Felicity Arbuthnot
9.Which Way is Inflation Blowing? Watch Commodities - Gary_Dorsch
10.U.S. Economy Quarterly Review and Implications for 2014-2015 - Lacy Hunt
Last 5 days
Why the Stock Market Is Heading For A Fall - This Time Is Not Different - 25th July 14
An Economic “Nuclear Strike” on Moscow, A “War of Degrees” - 25th July 14
BBC, Western Media Working for Israeli Agenda of Perpetual War to Steal Arab Land - 25th July 14
Ukraine: What To Do When Economic Growth Is Gone - 24th July 14
Stock Market Clear and Present Danger Zone - 24th July 14
The Five Elements to Creating a Something-for-Nothing Society - 24th July 14
Instability is the New Normal? - 24th July 14
Israel's Suicide Bombers Over Gaza - 24th July 14
EUR-AUD Heads Into The Danger Zone - 24th July 14
Tesco Supermarket Death Spiral Accelerates as Customers HATE the Mega Brand - 24th July 14
Ukraine MH17 Crisis - Best Remember Who Your Friends Are - 24th July 14
Three Reasons Why Gold Price and Gold Stocks Will Rise - 24th July 14
HUI Gold Bugs Fighting To Break Downtrend - 23rd July 14
What Putin Knows About Flight MH17 - 23rd July 14
Why Microsoft Will Continue to Rebound, Huge Upside Potential - 23rd July 14
Will Putin Survive? - 23rd July 14
MH17 Crash Next Phase Economic Warfare - 22nd July 14
The TRUTH about China’s Massive Gold Hoard - 22nd July 14
Forex Multi-week Consolidation in EUR/USD Ended - 22nd July 14
Bitcoin Price Medium-term Trend Being Tested - 22nd July 14
Beware Of The Flash Mob - 22nd July 14
Can Putin Survive? - 22nd July 14
Israel Assault on Gaza: A Historic Crime, Nazi Like Final Solution - 22nd July 14
Zionist Israel an International Pariah - 22nd July 14
Reflections on the Global Misery Index - 22nd July 14
GDP Economic Statistic : A Brief But Affectionate History - 22nd July 14
TransTech Digest: Super Battery Bio-Power vs. Dirty CleanTech - 21st July 14
How to Find Trading Opportunities in the Currency Markets - 21st July 14
Stock Market One More Pull Back - 21st July 14
The Conquest Of Real - Degenerate Philosophies of the Book - 21st July 14
A Clear Way to Profit from a Graying Population - 21st July 14
Last Chance Critical Financial Market Forecasts Special Total Access - 21st July 14
Stock Market Crash Nightmare! - 21st July 14
Why the Stock Market Is STILL Cheap - 21st July 14
From Gore-Bore To Gore-War - 21st July 14
Gold Price Looking Drab - 21st July 14
An In-Depth Look at Gold Chartology - 21st July 14
The Jewish Selfish Gene, People Chosen by God, Everyone Else is Goyim to Kill - 20th July 14
AUD NZD Taking The Forex Bull By The Horns - 20th July 14
US-backed Israeli Invasion of Gaza Unleashes Death and Destruction - 20th July 14
The Israeli Promised Land Dream - The Criminal Roadmap Towards “Greater Israel”? - 20th July 14
Stock Market in DANGER of Strangling the Bears to Death - 20th July 14

Free Instant Analysis

Free Instant Technical Analysis


Market Oracle FREE Newsletter

How to Profit from the Bakken Crude Oil Shale Boom

Commodities / Crude Oil Apr 20, 2012 - 06:57 AM GMT

By: Money_Morning

Commodities

Best Financial Markets Analysis ArticleDavid Zeiler writes: Did you ever wish you'd been around for the California gold rush of 1849? Or the Texas oil boom of the early 1900s?

Maybe you can't go back in time, but you don't have to.

The Bakken oil shale boom going on in North Dakota right now is just as big-if not bigger.


Just take a look at what's been happening in Williston, ND, the epicenter of the Bakken oil shale boom.

In Williston, it's like the recession never happened.

Unemployment is under 0.8% -- that's right, less than 1%, far below the national average of 8.2%. And the new oil jobs pay well, too. The average oil worker is making more than $90,000 a year.

The flood of jobs has made Williston the fastest-growing small city in the United States.

Consequently, there was no collapse in home prices in Williston. The inrush of new employees to work the Bakken oil shale boom has actually created a housing shortage.

A one-bedroom apartment that went for $500 in 2005 costs at least $2,000 now. Builders literally cannot build homes fast enough.

The rapid population growth from the Bakken oil shale boom has left many people sleeping in cars and tents. Williston just this week was forced to pass an ordinance that makes it illegal to live in a camper within city limits.

And while other states have been cutting services, shedding jobs and raising taxes, North Dakota is building up the state trust fund and reducing property taxes. All that, and still it projects a $1 billion surplus for its two-year budget.

"This boom is just wild and crazy," Williston Mayor Ward Koeser told Governing magazine last year. "It's more than you can fathom."

Bakken Oil Shale Among the Largest Ever
The Bakken oil shale formation was discovered in 1951, but recovering the oil only became economically feasible with the development of "fracking" technology and rising oil prices.

Extracting oil from shale rock formations becomes profitable when global oil prices are above $60 a barrel. Oil has been over $100 a barrel for months, and many experts believe it will only go higher in the months and years ahead.

And while oil shale deposits have been discovered in many parts of the United States, the Bakken oil shale formation is among the largest ever found.

Harold Hamm, CEO of Continental Resources Inc. (NYSE: CLR), a major player in the Bakken oil shale boom, told The Wall Street Journal last October that his company believes the formation holds 24 billion barrels of oil.

That figure doubles the proven oil reserves in the United States.

"Bakken is almost twice as big as the oil reserve in Prudhoe Bay, Alaska," Hamm said."We expect our reserves and production to triple over the next five years."

But unlike the mature fields of Prudhoe Bay, production in the Bakken oil shale region is still ramping up.

In the years leading up to 2005, production in the Bakken region was about 100,000 barrels a day. By February of this year, production had jumped to 494,000 barrels a day, a five-fold increase.

According to a recent study by Advanced Resources International, Bakken oil shale production will surpass 1 million barrels a day in 2015, eventually peaking at about 1.45 million barrels a day in 2020.

Bakken Oil Shale Boom Could Be Even Bigger
Despite all the amazing numbers surrounding the Bakken oil shale boom, they could be even bigger if not for several constraints.

The major thing holding the oil companies back is the inadequate infrastructure - not just the shortage of housing for workers, but roads not designed for heavy industrial use.

"Some roads are literally crumbling," Frontier Energy Group CEO Dan Eberhart told the Associated Press. "You've got potholes that could eat a truck."

Frontier has also had to cope with the housing problem.

"We've had to basically buy apartment complexes to put our people in," Eberhart said. "We've got campers around buildings. Housing is a giant, giant issue for us."

Frontier has gone so far as to saw down the size of the desks so more people can squeeze into an office.

However, as the infrastructure issues get resolved, the Bakken oil shale boom will accelerate at an even faster pace.

Another possible brake on growth could be environmental concerns over fracking, which the government has shown an increasing interest in regulating. That would add to the cost of working the Bakken oil shale, though not so much as to make it unprofitable.

The oil companies, however, are ready to deal with whatever the government throws at them.

"The industry is doing whatever they can to mitigate the [environmental] risk [of fracking fluids]," Brian Shactman, a CNBC News reporter who did a story on Williston last summer, said on the Scott Hennen Show. "I can guarantee you that every single company out here that has enough money is also researching what ways they can do it in a more organic way. They want to be able to continue working out here...There's just too much oil here and too much in profits."

Make no mistake, the amount of oil and profits from the Bakken oil shale boom will be as historic as the size of the reserve itself.

Money Morning has identified the five best prospects for investors that want to participate in the Bakken oil shale boom.

And you can read all about them in Monday's edition of Money Morning.

Source :http://moneymorning.com/2012/04/20/how-to-profit-from-the-bakken-oil-shale-boom/

Money Morning/The Money Map Report

©2011 Monument Street Publishing. All Rights Reserved. Protected by copyright laws of the United States and international treaties. Any reproduction, copying, or redistribution (electronic or otherwise, including on the world wide web), of content from this website, in whole or in part, is strictly prohibited without the express written permission of Monument Street Publishing. 105 West Monument Street, Baltimore MD 21201, Email: customerservice@moneymorning.com

Disclaimer: Nothing published by Money Morning should be considered personalized investment advice. Although our employees may answer your general customer service questions, they are not licensed under securities laws to address your particular investment situation. No communication by our employees to you should be deemed as personalized investent advice. We expressly forbid our writers from having a financial interest in any security recommended to our readers. All of our employees and agents must wait 24 hours after on-line publication, or after the mailing of printed-only publication prior to following an initial recommendation. Any investments recommended by Money Morning should be made only after consulting with your investment advisor and only after reviewing the prospectus or financial statements of the company.

Money Morning Archive

© 2005-2014 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.


Comments

Ernie Messerschmidt
20 Apr 12, 22:17
ND state bank helps too

North Dakota's super economic statistics are greatly helped by its state-owned bank that profits the state just as much as the oil industry. It keeps the TBTF predator banks at bay and helps local banks and economic projects. It works out much better for the state than parking its funds at scum-bag BoA or some such. Other states that do the same will come out way ahead. If it weren't so dang cold there, I'd be a movin'.


Post Comment

Only logged in users are allowed to post comments. Register/ Log in

Free Report - Financial Markets 2014