An Eye on Oil
From his vantage point in Washington, D.C., John Staub ’98 ponders how the supply and price of oil will affect our futures.
Staub is an analysis team leader in the U.S. Energy Information Administration, part of the Department of Energy.
With a commodity as volatile as oil, it’s hard to plan for the future, but that’s just what Staub does every day. His team of nine researchers assesses domestic and international resources and the intersection of supply with consumption, then they devise scenarios based on drilling, production rates and the ever-changing price of oil.
One of the most important domestic developments he’s monitoring is the intense drilling activity in North Dakota.
Nearly 400,000 barrels of oil are being produced daily in the state, and there are more than 200 active drilling rigs at work, most trying to tap into the oil- and gas-rich Bakken geologic formation that stretches under western North Dakota, northeastern Montana and southern Saskatchewan in Canada.
Staub says estimates of recoverable oil in the Bakken are still unknown. It could increase to as much as 700,000 barrels a day, which would make North Dakota the second largest domestic oil producer behind Texas, Staub says.
In the Bakken formation, oil is trapped in shale cracks that geologists call “fractures.” The cracks usually run vertically, so horizontal wells have a greater chance of encountering the fractures containing oil.
To reach the oil, rigs drill to depths of 10,000 to 12,000 feet then drill several thousand more feet horizontally. Once these L-shaped deep wells are opened, a process known as hydraulic fracturing, or “fracking,” extracts oil. Drillers pump large amounts of water mixed with sand and chemicals into the shale formation under high pressure. The force opens up existing cracks in the shale, allowing trapped gas and oil to escape and flow back up the well.
One result of fracking is large amounts of wastewater. With its disposal, water contamination is a concern for local communities, and the farmers and ranchers who draw their water from underground wells and aquifers.
Staub says that slow U.S. economic growth generally results in lower demand for oil, as does increased efficiency of vehicles. But lower oil prices can also spur growth in other industries.
“So production in the future may not change as significantly with oil prices as one might expect,” Staub says. “We’re showing total U.S. consumption at 19 million barrels per day, which is projected to reach 21 million barrels per day in 2025.”
Story: Sheldon Green
Photos: Gia Rassier