Quote:
Originally Posted by Mr_Draco
Actually this is a misleading statement.
This oil reserve is not in liquid form (it's really called Shale Oil if you want to look it up) and requires a special extraction method that currently is not economical which is the real reason why it hasn't been extracted yet. If you think $150 a barrel was high in 2008, the special extraction and extra processing just to turn it into liquid form would raise prices to almost double that amount.
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There are many issues with the Bakken reserve. First these huge numbers for the size are from estimates of undiscovered oil. This means that nobody has proven the oil exists, basically from seismic reading they estimate what they think might be there then reduce that amount by the risk that a formation like this has no actual oil or less than the seismic data suggests. Acutally I think they have gotten pretty goos at this and adjusting this risk adjustment. We have proven some oil so the risk less.
Second this is a continuous deposit as opposed to a discrete deposit which means that it is held in many small pockets which each need to be discovered (exactly where each is and how deep) and developed separately. Then infrastructure build to extract each individual deposit. Most oil that gets drilled is in discrete deposits meaning all one pocket. Imagine a gas tank that has one big 19 gallon space for gas, insert one fuel line and one fuel pump and you suck out the gas. What if your tank was 38 half gallon spaces, now you need 38 fuel lines, and 38 fuel pumps to get the gas out. Taking the gas out of the tank may be just as easy but you needed 38 times as much equipment and 38x the equipment expense.