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 Federal Study Says More oil Under Fort Peck Than Previously Thought |
Reprinted from Fort Peck Journal
A U.S. Geological Services study revealed that up to several hundred millions of barrels of oil are pooled under the Fort Peck Reservation.
The study, released Thursday by the federal agency, estimates a total of 3.65 billion barrels of oil are under the Bakken formation which stretches from eastern Montana into central North Dakota.
The study assessed six areas of the Bakken; the Central Basin – Poplar Dome assessment unit – which covers the reservation – is estimated to have 485 million barrels of retrievable oil in it, according to the study.
The challenge for the Fort Peck Tribal Executive Board now is to figure out how to access the oil and who might help with the process. “It’s very enticing but we need to protect our interests,” said Councilman Tom Christian, chair of the Natural Resources Committee. “There’s a lot of interested parties interested (in coming to Fort Peck) but there are a lot of speculators, too.”
The interest among oil companies was expected by the Tribes the past month after chairman A.T. “Rusty” Stafne and Montana Gov. Brian Schweitzer signed a tax agreement that would make drilling opportunities and investment on the reservation more available.
The report, ordered last year by North Dakota Sen. Byron Dorgan, also said that only a limited number of wells have produced from the Bakken in three areas in Montana and North Dakota, including the Central Basin-Poplar Dome. “Therefore, there is significant geologic uncertainty in these estimates,” the report said.
According to observers of the oil industry, the heart of the Bakken is two miles below the earth’s surface. It was discovered in the mid-1950s but more oil has been readily accessed in recent years due to horizontal drilling techniques, invented by recent technology.
Because of the oil fields north of town, Poplar was once known as “The Oil City” and shared in some of that oil boom in the 1950s. Companies pulled out after oil prices dropped and exports from other countries rose. Studies completed in the 1990s said there were only 150 billion barrels of oil under the Bakken, but technology has advanced search techniques.
Experts predict the Bakken will produce oil for quite some time.
“It’s output is expected to expand exponentially so long as oil prices remain above $60 a barrel,” wrote oil company developer John Markman, for MSN Magazine.
Christian said the Tribes will meet with several interested oil companies in the coming weeks, but the council wants to do further research before committing to a plan. “We will be looking for further geological studies and determine what’s best for the Tribes,” he said.
The state and Tribes signed the oil and gas production tax agreement – the first of its kind in the nation – during a traditional treaty signing ceremony in March.
Under the agreement, the Tribe and state will split the tax proceeds 50-50 on new production. The agreement applies only to reservation landowners who are tribal members and to tribally owned lands.
The agreement will prevent double taxation by both governments, which tribal officials believe has hindered oil and gas production on a reservation surrounded by one of the busiest oil producing areas in the country.