Estimates of U.S. Oil and Gas Multiply

Amy Harder
National Journal

The United States has double the amount of oil and three times the amount of natural gas than previously thought, stored deep under the states of North Dakota, South Dakota, and Montana, according to new data the Obama administration released Tuesday.

In announcing the new data in a conference call, Interior Secretary Sally Jewell also said the administration will release within weeks draft rules to regulate hydraulic fracturing, technology that has come under scrutiny for its environmental impact but that is essential to developing all of this energy.

“These world-class formations contain even more energy-resource potential than previously understood, which is important information as we continue to reduce our nation’s dependence on foreign sources of oil,” Jewell said in a statement.

The formations, called Bakken and Three Forks, span much of western North Dakota, the northern tip of South Dakota and the northeastern tip of Montana. The last time the United States Geological Survey assessed this area for its oil and gas reserves was in 2008. But that assessment did not include the Three Forks formation, which explains the substantial increase in the estimates. USGS estimates that these two formations together hold 7.4 billion barrels of undiscovered—but technically recoverable—oil and 6.7 trillion cubic feet of natural gas.

The estimates were requested by Sen. John Hoeven, R-N.D., in early 2011. “This is clearly great news for North Dakota and great news for the nation,” Hoeven said in a statement. “It will further serve to enhance our state’s role as an energy powerhouse for the nation.”

The energy boom’s impact on North Dakota’s economy is undeniable. The state has the lowest unemployment in the country, at 3.3 percent.

These estimates don’t necessarily represent oil and gas resources that could be immediately developed or are even recoverable right now. Many factors must align to compel companies to access energy resources, including prices and environmental regulations.

Nonetheless, the data add more hard evidence of America’s energy boom, which was largely unimaginable just seven years ago. The estimates also underline the opportunities, including economic benefits and energy security, and the challenges, especially President Obama’s commitment to tackle climate change, that come with a major fossil-fuel boom.

“Combined with recent declines in oil consumption, foreign-oil imports are less than 40 percent of oil consumed in America,” Jewell said. “That’s the lowest level since 1988.”

Jewell also announced the department will release “within weeks” reworked, draft rules requiring stricter regulations on hydraulic-fracturing operations. She said the earlier version of the draft rules generated enough comments—roughly 100,000—to prompt the administration to allow for a second round of public input.

The symbolic importance of these rules could have a greater impact than their substantive effect. The regulations apply to oil and gas production only on federal lands, a small portion of the total amount of oil and gas produced in the U.S. According to the Interior Department, 11 percent of the natural gas produced in the country is on public lands, as is 5 percent of the oil.

The rules will provide a marker for states to implement individual regulations and for Congress to debate legislation that could create a federal standard.

“We must develop our domestic energy resources armed with the best available science,” Jewell said. “This unbiased, objective information will help private, nonprofit, and government decision-makers at all levels make informed decisions about the responsible development of these resources.”