25-Year Outlook -- Bakken, North Dakota, USA

For folks who are concerned that the current Bakken boom is no different than the previous booms in the boom-bust cycle of the oil industry, this article should be a bit reassuring.

Not surprisingly, liquid oil’s share of world energy consumption is predicted to decrease from 34 percent in 2008 to 29 percent in 2035. The decrease is based on dwindling supplies, which are likely to keep prices high. This will prompt users to switch to alternative fuels whenever possible. As expected, two of the main alternatives expected to flourish in production by 2035 will be petroleum from oil sands and natural gas from shale and other unconventional sources.

According to the EIA, the world’s use of petroleum products, including natural gas liquids, will increase from 85.7 Mb/d (million barrels per day) in 2008 to 112.2 Mb/d in 2035. As you can see from the graph below, 82 percent of the growth will be in the transportation sector, while industrial, building use and power generation should remain nearly constant.

I have seen no evidence that any energy source will take a meaningful bite out of hydrocarbon energy.

There is not enough surface area in the world for solar to make a meaningful dent, and I no long follow, and seldom write about solar energy except when facts and data confirm the obvious (see postings on Solyndra as a case study).

Wind will have a niche role (mostly in killing whooping cranes, bald eagles, and California condors), but wind won't make much difference otherwise.

I really thought that nuclear had a chance, but after the disaster in Japan nuclear is "dead" -- at least in my lifetime and probably in the investing lifetime of my daughters.

Unless there is some energy source that I am missing, that leaves oil and natural gas.

Of all the places to drill for oil right now and the foreseeable decade, I don't see a place anywhere in the world that  a) is as safe; b) is as friendly to the oil industry; c) is as politically stable; d) is as inexpensive to live and work, d) has a better infrastructure already in place, than North Dakota.

I'll leave it at that for the moment.