Is the Dakota Access Pipeline Already Obsolete? The Collapse of the Bakken Oil Fields
Few environmental issues in recent memory have been as explosive and controversial as the Dakota Access Pipeline (DAPL). In the fall of 2016, the project made international news, as protests led by the Standing Rock Sioux tribe erupted in North Dakota,. The pipeline’s construction routes underneath Lake Oahe, a major source of water, and through a sacred burial ground. As activists traveled to the site throughout much of the year, battles waged both on the ground and in the courts with opponents demanding that the project be halted, citing environmental and tribal concerns. In November of 2016, President Obama announced his Administration would look at possibly re-routing the pipeline. But in one of his first acts as president, Donald Trump signed an executive order green-lighting the project.
Throughout all of the dramatic political machinations in Washington and the police violence at the site of the protests, energy analysts have been quietly announcing an incontrovertible fact: production at the Bakken oilfields, the source of oil for DAPL, is in a steep, likely irreversible decline.
In March of 2017, energy expert Art Berman didn’t sugarcoat his assessment of where Bakken shale is headed. Writing inForbesin March, Berman stated:
The decline in Bakken oil production that started in January 2015 is probably not reversible. New well performance has deteriorated, gas-oil ratios have increased and water cuts are rising. Much of the reservoir energy from gas expansion is depleted and decline rates should accelerate. More drilling may increase daily output for a while, but won't resolve the underlying problem of poorer well performance and declining per-well reserves.
According to Berman, despite a recent, short-lived increase in production, well-levels at Bakken (the amount of oil available to extract from the specific area) are in decline, dropping over 33 percent in production between 2012 and 2015. In addition to well levels, Berman attributes the shift at Bakken to the fact that the reservoir is dropping in pressure. As the pressure drops, the cost to extract goes up, leading to a higher cost per barrel of oil. Over time, extraction makes less and less financial sense for companies doing the work, as energy costs to extract the oil spiral up.
Berman might be on to something, as the numbers from the North Dakota Industrial Commission (NDIC) mirror his predictions. The NDIC, which regulates the state’s oil and gas production, posts historical statistics from the Bakken shale play, a month-by-month accounting going back to 1953. Over the course of the last few years, the “daily oil per well” numbers are clearly declining, even as the number of wells rises in number.
To be sure, there are a lot of esoteric, highly technical considerations when assessing oil production, including price fluctuations, OPEC policy and unseen international events. But the stark numbers from such a staid source as the NDIC seem to confirm Berman’s suspicions about Bakken shale.
In fact, it appears the production of sweet crude oil (the low-sulfur version coveted for gasoline production), is in decline across the entire state of North Dakota. S&P Global, a think-tank focusing on international commodities, quoted the director of NDIC Lynn Helms, confirming the drop in production:
December production fell by 29,507 b/d [barrels/day] from November, as prices for North Dakota sweet crude and the number of drilling permits continued to free fall... Lynn Helms, the state's top oil and gas regulator, called the December data "the first real production decline" the state has seen as producers curtail drilling efforts amid the ongoing price collapse.
What does this mean for Standing Rock and the inevitable protests that are sure to continue if construction of the pipeline resumes? The answer is unclear. In an age where the influence of data, science and reason all seem to be in the same decline as sweet crude, activists and experts face a new, dangerous foe: a public highly skeptical of basic facts. But, as the cliché goes, the numbers don’t lie. Oil, as an energy source, is in decline. For protestors under assault while defending sacred, live-giving land, it’s a small comfort, but a comfort nonetheless.
RELATED EXHIBIT: To learn more, visit Standing Rock: Art and Solidarity, on view beginning May 20, 2017 at the Autry Museum of the American West in Griffith Park. Poster art, T-shirts, and photographs demonstrate the immediacy of the protests and conflicts as they have unfolded, while a video art piece by the Native collaborators of Winter Count and a historical tour explore the broader meanings of these events.
Map Feature Currently Unavailable
