The U.S. may still need Saudi Arabia’s oil in the long term if its domestic shale oil boom peters out, according to the Paris-based International Energy Agency. U.S. oil production is projected to level off and then slowly decline after 2020. The IEA estimates 2,500 new wells a year are needed to sustain output of 1 million barrels a day in North Dakota’s Bakken Shale.I really get a kick out of this. "Everyone" focuses" on the "red queen." Take the flip side of that coin. The "red queen" guarantees work for thousands of roughnecks, truckers, and regulators for decades. Sure, it would be nice if it only took one well to drain the Bakken but it ain't gonna happen. That's why they have a depletion allowance -- something that existed well before the Bakken.
2,500 wells/year at $10 million/well (just for drilling) = about $25 billion / year being pumped into the Bakken for drilling. I think UND says every dollar in North Dakota circulates through four hands in any given year. I could be way wrong on that. But dollars do circulate.
No comments:
Post a Comment