Summary: A case study of information flow on the Internet, and some conclusions. Why does the Internet sometimes make us dumber? How can we use it better? We will need all the help we can get in the days to come.
The Internet can make us smarter — or dumber. It depends on how we use it. This post examines the euphoria over the Bakken Formation, and how it grew, briefly flowered, and died. It is a case study, showing the flows through the Internet of information and misinformation.
I. We start at the beginning. This paper sparked new interest in the potential oil output of this area: “Origins and Characteristics of the Basin-Centered Continuous Reservoir Unconventional Oil-Resource Base of the Bakken Source System, Williston Basin”, Leigh Price (1999/2000) — Price estimated the Bakken formation may hold as many as 900 billion barrels of oil. He died in August 2000; the study was never published by the USGS. Here is a link to the paper.
Price’s paper was both technical and obscure. For anyone wanting facts about this topic, the North Dakota state website provides a clear statement of the facts: Bakken Formation Reserve Estimates.
As interest in the Bakken formation grew, with drilling of several successful low-output wells, more reports appeared on the Internet.
II. Some good: “The Bakken Trend: Lost Dutchmen Mine of the Oil Patch?“, Steven Ward at Seeking Alpha (22 January 2008) — An excellent description of the history, current work, and prospects of the Bakken Formation. Ward is an independent oil analyst, formerly with Amoco Oil Company.
III. Some less so: “Massive Oil Deposit Could Increase US reserves by 10x“, Next Energy News (13 February 2008) — Excerpt (bold emphasis added):
America is sitting on top of a super massive 200 billion barrel Oil Field that could potentially make America Energy Independent and until now has largely gone unnoticed. Thanks to new technology the Bakken Formation in North Dakota could boost America’s Oil reserves by an incredible 10 times, giving western economies the trump card against OPEC’s short squeeze on oil supply and making Iranian and Venezuelan threats of disrupted supply irrelevant
IV. The much-derided mainstream media published an excellent article on this: “Report on Bakken oil potential expected“, Business Week (7 April 2008)
Now the blogging community had some red meat to chew on! Which did they focus on? The wild article by Next Energy, or the boring but factual Business Week story? The first post I could find was mild.
V. “The Bakken Formation: How Much Will It Help?“, Gail the Actuary, posted at The Oil Drum (23 April 2008) — An excellent review of what we know, and do not know.
VI. “Peak Oil Update, 10x increase in US reserves“, Russell W. Steele posted at NC Media Watch (8 April 2008) — A reasonable opening “We have heard a lot about the decline of oil reserves, which are estimates based on current technologies. With new technologies and higher prices, new reserves come on line.” Then he links to the explosive, exaggerated Next Energy News Story.
But things quickly spun into fantasy-land.
VII. “North Dakota Discovery - 200 Bn Bbl Of Oil“, M. Simon posted at Power and Control (9 April 2008) — Also posted at Classical Values. Note the certainty of his opening line. Only 400 words later, does he give a caution, before ending on a note of euphoric absurdity — as if low-flow discoveries like this are substantial offsets to the peaking of super-giant fields like Ghawar, Burgan, and Cantarell.
Two hundred billion barrels of oil have been discovered in North Dakota.
… The first report was a quote from New Energy which often gets things wrong. I’d say the Business Week Report is more reliable. Here is a technique for Mining Oil. I think the peak oil folks got it wrong. As usual. Capitalism beats the fear mongers. Again.
VIII. Once the story assumed its mature form, the Instapundit linked to it — posting it in his center ring under his Big Top as “BLACK GOLD. NORTH DAKOTA TEA“. From this foundation, thousands of blog posts flowered. Note how the Instapundit often prefers links to folks with no background in the subject under discussion. That is, outside his own professions, of course. With legal issues he usually links to experts with credentials.
IX. The US Geological Survey published their long-awaited National Assessment of Oil and Gas Fact Sheet. “{An} estimated mean undiscovered volumes of 3.65 billion barrels of oil, 1.85 trillion cubic feet of associated/dissolved natural gas, and 148 million barrels of natural gas liquids in the Bakken Formation.”
IX. Eventually the major media writes realistic descriptions of the situation. See this nice description of drilling in the Bakken fields: “Dakota Oil Fields of Saudi-Sized Reserves Make Farmers Drillers“, Bloomberg (3 June 2008) — There is a long excerpt in the comment section.
Conclusions
The Internet links us together into a vast cybernetic organism. As with the forged documents shown on Sixty Minutes, it disseminates information and insights such that the America seems like a village. But does the Internet serve us as well with complex events that require more expertise? The mainstream media, for all their faults, does bring experts into the national discussion — who (at their best) paint issues with some depth. We see a different dynamic at work as the Internet “processes” recent events in Basra, the “cut cable crisis”, and the Bakken Formation. Here fact takes second place to emotion, expertise to sensationalism.
It need not be like this. Most bloggers on such serious subjects have good educations. Bloggers — we — can take the extra few minutes to locate good sources, and exercise responsibility for our roles before hitting the enter key.
I believe there are difficult times ahead for America. The Internet can help us, if we use it wisely. It just magnifies our abilities, our strengths and weaknesses.
Please share your comments by posting below (brief and relevant, please), or email me at fabmaximus at hotmail dot com (note the spam-protected spelling).
Click here to see other articles about Peak Oil on this site.
Posts about the Internet: does it make us smarter or dumber?
- Cable Cut Fever grips the conspiracy-hungry fringes of the web, 7 February 2008
- Resolution of the Great Submarine Cable Crisis — and some lessons learned, 8 February 2008
- What do blogs do for America?, 26 February 2008
- The oddity of reports about the Iraq War, 13 March 2008
- Euphoria about the Bakken Formation, 10 April 2008
- The Internet makes us dumber: the Bakken euphoria, a case study, 15 April 2008
- Does reading Debkafile make us smarter, or dumber? , 15 June 2008
- A Congressman ignites a netstorm about Twitter, 9 July 2008
Posts about rumors of a US armada sailing to blocade Iran
- More rumors of war: our naval armada has sailed to Iran!, 9 August 2008 — Tracing the origin of these rumors.
- Update on the rumored armada sailing to Iran, 13 August 2008 — With updates from Stratfor and Debkafile.
- A US naval armada is en route to blockade Iran and start WWIII (the story gets better every day), 14 August 2008 — More details from one of the bloggers who shot this story into cyberspace, and an official US denial.
- UPI reports on the multi-national armada sailing to Iran, 15 August 2008
- Stop the presses: no naval armada has sailed to blockade Iran!, 20 August 2008
On this subject, I completely agree. The internet is an amorphous creature, though. It may be 90% opinion, or gossip, but it also includes all the major newspapers, news aggregator sites, learned journals, expert commentators like William Lind, etc. A real democratic agora, you might say!
My biggest concern is that we all spend too much time on the internet. A virtual community is not really a community at all, and blathering and shouting back and forth with someone in North Dakota is not the same as getting your neighbor to vote for a local school bond.
Comment by plato's cave — 15 April 2008 @ 7:13 pm
New reported added to this story:
“The Bakken Formation: How Much Will It Help?“, Gail the Actuary, posted at The Oil Drum (23 April 2008) — An excellent review of what we know, and do not know.
Comment by Fabius Maximus — 26 April 2008 @ 2:38 am
Yes, the internet does make society dumber…
Before the rancid, parasitic libtards had to make a real effort to spew their inane nonsense…
Comment by juandos — 8 May 2008 @ 9:19 pm
Have to take issue with your conclusions about the Bakken Trend hoopla. The final government report specifically made no estimates of provable reserves. Rather its conclusion was limited to amounts it believed could be recovered. The number they came up with was far less than any one in the industry would have predicted. It is less than one percent of the in ground oil at the low end of estimates. Under current drilling technology, somewhere between 8 to 50 percent of the reserves in place would be recoverable. Take the low end and you still come out with 16 billion barrels. Current wells being drilled on site initially produce over 2000 barrels per day. Over time it is expected to decline to about 500 per day. Production is greatly increasing in this area, which also includes part of Canada. Montana declared an 18 month tax holiday which has seen exploration explode in the state. If ND were to do the same and perhaps throw in some rebates, who knows how much production could be realized. All I know is that there is more oil being produced now than the pipeline can handle and they have resorted to trucks to ship it out. This is surely not the sign of a minor find. Through the miracles of sideways–horizontal–drilling many promising domestic oil fields are being developed.
It must be understood that the government report relied on flawed methodology about how much oil was recoverable and it never attempted to measure the total amount of oil in the ground. Now I have unfortunately misplaced by tin foil hat, so I won’t begin to speculate on why this was so. All I do know is that Shell and Marathon, two majors looking to cash in are anxiously looking for opportunities here. In addition, the property clerks’ offices in ND and Montana have been overrun by oil men looking to identify and buy up leases. If Exxon or Chevron decide to forgo this play, then one must wonder why.
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Fabius Maximus replies: What specific conclusions do you take issue with? This is not clear to me from your comment. You do not seem to address any of my key points. Esp the relevance of flows over reserves for unconventional resources.
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Your last paragraph is esp irrelevant to my post. I never said or implied that folks could not make money exploiting these fields, just that these fields have minimal significance on the national and global levels.
Comment by Kerry Lutz — 15 May 2008 @ 2:20 pm
Update: Nice description of drilling in the Bakken fields: “Dakota Oil Fields of Saudi-Sized Reserves Make Farmers Drillers“, Bloomberg (3 June 2008) — Excerpt:
“The challenge is getting the oil out. Bakken crude is locked 2 miles (3.2 kilometers) underground in a layer of dolomite, a dense mineral that doesn’t surrender oil the way more-porous limestone does. The dolomite band is narrow, too, averaging just 22 feet (7 meters) in North Dakota.
… For decades, the Bakken was the fool’s gold of the oil industry. The name describes a geological formation that looks like an Oreo cookie: two layers of black shale that bleed oil into the middle layer of dolomite. It’s named after Henry O. Bakken, the North Dakota farmer who owned the land where the first drilling rig revealed the shale layers in the 1950s.
All of the layers are thin — about 150 feet altogether — and none of them give up oil easily. In older, vertical wells, oil would often flow for a month and then fizzle.
Now, companies like Austin, Texas-based Brigham Exploration Co.; Denver-based Whiting Petroleum Corp.; and EOG are drilling horizontally. They go straight down 10,000 feet and then put a slight angle in the mud motor, a 30-foot piece of tubing that drives the bit, so they hit the Bakken sideways, making a horizontal tunnel 4,500 feet long through the dolomite.
That exposes more of the oil-bearing rock. Then they pump pressurized water and sand into the hole to fracture the dolomite, making cracks for oil to seep through.
… It drilled a horizontal well in western North Dakota just north of Parshall — population 1,028 — in April 2006. The well came online a month later and kicked out 1,883 barrels in the first seven days. Unlike the older vertical wells, it’s still going. In March, it produced 2,305 barrels, according to the North Dakota Industrial Commission. {FM note: the well initially produced 270 b/day; output dropped by 70% over two years to 74 b/day}
… The Bakken isn’t foolproof. Far from it. Drilling there is expensive — about $5 million a well, according to EOG — and takes experience. Dallas-based Petro-Hunt’s first well in the North Dakota Bakken didn’t make money, company geologist Steve Bressler says. Brigham’s Bergstrom Family Trust well came online at 277 barrels a day — viable at today’s high oil prices but not a gusher.
Comment by Fabius Maximus — 4 June 2008 @ 1:23 pm
Just noticed this post and the comments. Some specific descriptions of terms could clear up much of the misunderstanding. The original oil in place (OOIP) is estimated to be between 200 and 400 billion barrels, but the recovery estimate is slightly above 1 percent of the OOIP. That puts the 3.65 billion barrel resource estimate in perspective. Apparently many of the “reporters” did not distinguish between OOIP and resources. Also, the middle layer of the Bakken Fm is not dolomite. It consists five different lithologies: from top to bottom they are siltstone, interbedded shale and sandstone, sandstone, interbedded shale and sandstone, and siltstone. The comments on the challenges of drilling and producing the Bakken are on target.
Comment by Will Gosnold — 7 August 2008 @ 8:30 pm