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The Bakken Boom
By EK Hornbeck
Cynics may even be tempted to call it much-needed scenery: rows upon rows of pumpjacks and derricks lining the desolate prairie pastureland in southeastern Saskatchewan.
But if the odd, misguided joke is as bad as the ridicule gets, most residents will be more than happy too oblige. Saskatchewan, after all, is now a have province, and driving between the city of Weyburn and the booming community of Carlyle, it's not difficult to see why.
This is oil country, and home to one of the largest North American deposits discovered in the past 50 years.
The formation is simply referred to by locals as the Bakken — an expansive basin spanning 520,000 square kilometres along the borders of Saskatchewan, North Dakota and Montana. Geologists estimate there is up to 24 billion barrels (bbl) of recoverable oil in the region using technology available today, while the reserve itself is speculated to be as vast as 200–300 bbl — rivaling some of the largest proven reserves on the planet, including the energy-rich nations of Saudi Arabia (267 bbl) and Venezuela (297 bbl).
By comparison, Alberta's oil sands boast proven reserves of 169 bbl.
A sign of the times, you'll rarely pass a car on the highway anymore; instead, three-quarter-ton flatbeds, fleet trucks and tankers dominate traffic — and, yes, Saskatchewan does have traffic. Unfortunately, the latter of those vehicles may still be in too short of supply.
By the end of 2010, production throughout the Bakken had climbed to 458,000 barrels per day — 70,000 on the Saskatchewan side of the 49th parallel alone — far outstripping transportation capacity. For many companies and their workers (and, consequently, for the province), that infrastructure gap continues to mean lost time and lost revenue.
"New rock fracturing technology introduced around 2008 has significantly increased how productive some of these wells can be," explains Derek Lothian, a native of southern Saskatchewan and current national communications manager with Canadian Manufacturers & Exporters (CME). "Initially, wells are producing, on average, 250 barrels each day. That's a lot of oil that needs to be stored and then shipped out on a continual, real-time basis."
But not all wells are that profitable. Many of the units that were drilled in the 1950s and restarted at the return of $100 per barrel oil produce as little as 3–5 barrels per day. On the other hand, some of the more lucrative horizontal wells — which can feature laterals up to 9,000 feet long — can generate averages up to 1,250 barrels per day.
The challenge is, and always has been, controlled growth; but in a way that encourages long-term planning without scaring off much-needed investment.
In 2011, 2,500 new wells were completed in Saskatchewan's Bakken region, and 4,650 more are expected to be drilled throughout the province in 2012 — one-third of all those drilled in Western Canada.
The Provincial Crown, meanwhile, owns more than three-quarters of all petroleum and natural gas rights in the Land of the Living Skies, followed by private landholders at 18.5 per cent and Aboriginal reserves at two per cent.
That means jobs, tax revenue and a whole lot of oil.
"Some of the major players are anticipating they will be able to recover upwards of 170,000 barrels per well over the span of their lifetime," says Lothian, whose family has been involved in Saskatchewan's oil industry for the past 65 years. "When you factor in the rising cost of crude and the service sectors supporting the growth of the Bakken, you can see how this industry is fast becoming the proverbial fuel for the province's economy — one, by the way, that is poised to lead economic growth in all of Canada."
