The Motherlode Under the Prairie

     The north center core of the United States has for several hundred years been seen as the desolate outback of the country. Sparsely inhabited at one time by nomads, it was seen initially as an endless ocean of grass to be navigated and surmounted to reach the desired bounty of the more inviting western and Pacific states. A residual back water for wheat farmers and isolationists, the prairie states of the Dakotas with their vast spaces and brutal winters were suggested to be economically inviable and best left to be returned to the condition of a laboratory for unhindered and uninhabited nature.

     No one is suggesting that now.

     It is not that the massive distances, snowstorms and winter temperatures in the 40 below range have suddenly disappeared or that large numbers of people have irrationally determined they actually like to live in arctic cold.   What has changed everybody’s mind lies some ten thousand feet under the gentle undulating prairie, formed from ten of millions of years of  accumulation of the detritus of living organisms.  It turns out that the state once voted most likely to uninhabit itself out of existence, North Dakota, is sitting on potentially the largest oil field in the continental United States, and may yet be positioned to become the Saudi Arabia of North American oil production.

     Like so often in America’s past, it is the combination of technological advance and entrepreneurial know-how that has converted North Dakota into a dramatic economic powerhouse and a magnet for job growth.  The Bakken formation, a geological formation of shale and sandstone, has been known about since the 1950’s as a potential bountiful repository for oil.  The first well was drilled in 1951.  The formation required a set of conditions however to make it profitable to drill that has not existed until recently.  For decades the easy access of the wells in OPEC countries and the transportation highway provided for by the world’s oceans left the difficult to access, expensive oil drilling process of the prairie oil fields unattractive to large oil producers.  It also left the world hostage to the manipulations of the OPEC collaborators both to price and the enormous political power of the world’s energy supply.  North Dakota drilling required two essential ingredients to be profitable, a stable oil price and the invention of two techniques, horizontal drilling and frakking, to unleash the oil from the shale rock and start the oil really flowing.  The process of horizontal drilling allows a single well access to a massive amount of teritory of oil, and frakking, the process of fracturing rock under high pressure to release capture deposits of oil, have proved ideal to the conditions present in the geology of North Dakota and Eastern Montana.   Both conditions are present today and North Dakota is rocketing up the oil production charts, soon to pass California as the largest continental oil producer with the sky , according to the US Geological Survey, the limit.  The recognition of the huge economic potential is drawing thousands of people anxious for work and economic stability to the once desolate climes of the northern prairie.

     It would seem that a process that may provide the United States with stable and bountiful energy supplies, free it from the blackmail politics of OPEC, provide hundreds of thousands of high paying jobs, and achieve energy independence in a safe onshore, environmentally controllable way would be extremely attractive to the US government.  The current administration, however, bound to the storyline that carbon is an evil energy source and that only “green” sources are worth exploring and investing in, continues to place a mountain of regulation in front of the numerous small growing energy companies that took the leap to invest in the Bakken when the larger companies felt it not worth their attention.  In a Wall Street Journal interview with Harold Hamm, the entrepreneur who unlocked the Bakken formation, Hamm quotes President Obama in a meeting he had that shows the President’s tone deaf aversion to success in North Dakota, seeing it as a direct threat to “green” investment.  Hamm recalls the conversation:

“I told him of the revolution in the oil and gas industry and how we have the capacity to produce enough oil to enable America to replace OPEC. I wanted to make sure he knew about this.” The president’s reaction? “He turned to me and said, ‘Oil and gas will be important for the next few years. But we need to go on to green and alternative energy. [Energy] Secretary [Steven] Chu has assured me that within five years, we can have a battery developed that will make a car with the equivalent of 130 miles per gallon.'”

Mr. Hamm is owner and developer of one many small companies that took the leap in North Dakota and Eastern Montana that now own the greater portion of the Bakken formation and are likely through their success to be major contributors to an economic resurgence in the United States. The impediments put forward by the current administration are bound to be a political issue that will resound in next year’s election. The aversion to real science in the climate change debate has shackled this administration to the myths of the evil nature of carbon energy and left it throwing money away on green ventures too earlier in their scientific development to be of any rational help to this country’s and the world’s developing energy needs. It required fifty years for the economic conditions to be right for Mr Hamm and others to exploit the new technologies of  horizontal drilling and frakking that have made the North Dakota motherlode accessible and economically viable.  Noteably, it was not governmental oversite that identified the potential of the fields and developed the technologies.  As usual, it was the intrepid pioneer, with indomitable will, creativity, good ideas, and some really hard work that may yet allow all of us to reap the benefits.  If you are finally listening, Mr. President, THAT is the American story….

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