BISMARCK, N.D. -- North Dakota's easily recoverable oil reserves have jumped 41 percent, which state regulators hope will strengthen the case for long-term industry investment in the state's oil patch.
A new analysis by the state Industrial Commission's oil and gas division estimated the state's proven reserves at 550 million barrels. Geologists say there is a 90 percent probability that amount of oil can be pumped from western North Dakota, given current economic conditions.
The division's director, Lynn Helms, said the agency continuing to work on other estimates of probable oil reserves that are less likely to be produced.
The U.S. Department of Energy, acting through its Energy Information Administration, had the amount of proven reserves in ND at 389 million barrels, so this is a significant increase over that. The Department of Energy number was for 2004, but a spokesmen for the group said that their estimate for reserves in North Dakota is likely to come up in their 2005 assessment as well.
Gary Long, a petroleum engineer in the Energy Information Administration's division office in Dallas, said the federal agency's numbers are updated annually. Its report on 2005 reserves is to be published this fall, and he expects its North Dakota estimate on proven reserves will rise.
State Democrats, always eager to find a way around the economic boom North Dakota has enjoyed under the leadership of Gov. John Hoeven and other Republicans, have said that high gas prices have propped up the state economy and that the boom will only last as long as the high prices do. They have used this as an excuse to avoid tax cuts in the face of high state tax receipts and massive budget surplus. Unfortunately for them (but good for North Dakota as a whole), it appears as though gas prices will have little impact on the exploitability of North Dakota oil reserves.
Helms said the reserve estimate was nudged upward by rising oil prices. But even if prices crash, he does not expect the 550-million-barrel proven reserve estimate to drop more than 5 to 10 percent, he said.
Going forward North Dakota should have a policy of being highly cooperative with the oil industry. Increased domestic production of oil in places like North Dakota will help make this country less reliant upon foreign oil, not to mention the economic benefits North Dakota communities will enjoy as a consequence.