Monday, November 26, 2012

Reuters on the Montana Bakken

Better late than never, but it is still worth it to mention this column that John Kemp wrote for Reuters about the Montana portion of the Bakken.

The article notes what is well-known -- namely that Montana oil production peaked in 2007 and has been dropping. A number of explanations have been offered for this phenomenon, most notably that the North Dakota portion of the Bakken is generally thicker and more productive. Drilling rigs have thus been pulled across the border into North Dakota in the furious spate of drilling that has marked the last decade in that state.

The Reuters article points to some recent indications that the trend may be reversing:

Twenty-two rigs were active in the state at the start of November 2012, up from just eight last year, according to oilfield services company Baker Hughes.

This year has also seen a record number of drilling permits in Montana. It remains to be seen whether this is a blip or whether it is a portend of more sustained growth in drilling. At least some of that will depend on how the federal government treats oil drilling on public lands in North Dakota, since Montana has a much higher concentation of BLM and other public lands than does its neighbor.

The good news is that as oil revenues begin to flow into Montana's public coffers, we will have a Republican dominated legislature. This group will, with any luck, not be tempted to use it to line the pockets of our public-sector unions and to swell the state's payrolls with hundreds of new employees who can never be fired.

The most important thing to do with any fresh monies is to plow the bulk of it back into the part of the state that is bearing the brunt of the social and physical stresses that energy development brings. Again, a Republican legislature should help in this regard, since the bulk of Democratic legislators at this point are to be found in parts of the state far from Montana's oil patch.


bakkendispatch said...

Put the energy into wind development and other long-term renewable resources, that's what I say. This oil isn't going to last forever.

Montana Headlines said...

There is no reason why money that a state earns from traditional energy production should be plowed into alternative energy. It should be used to encourage general business development.

The Bakken oil may run out, but that doesn't mean that the rest of America's oil supply will run out. Just because traditional energy is our present doesn't mean that alternative energy will necessarily be our future in this region.