Core Laboratories N.V. (CLB): 30 Billion Barrels of United States Oil Won’t Lower Prices

Still, Demschur’s point stands: “The decline curve never sleeps and the decline curve always wins.” This conflict sets up the push and pull between supply, demand, production, and technology. Demschur echoes Pierrehumbert’s concern that we can’t add wells fast enough to keep continue growing production at an exponential clip over the long term.

Positive growth
On one hand, coupled with the rapidly expanding proven reserves (see the following table) is that so much of the shale acreage in the Bakken remains untested, but with high potential. According to data from the EIA, the region has one of the lowest well densities of any U.S. shale play, at two wells per square mile. Eagle Ford shale, for example, has five wells per square mile. Add to this the fact that the EIA reports that 97% of the Bakken has potential and 77% remains untested.

The argument posited by Sam Gorgen of EIA is that production could flatten out but won;t drop off: “The long-term outlook for shale/tight oil and gas production is supported by the large area extent of the plays and hence the number of wells that can be drilled.” This view overlooks Pierrehumbert’s concern over the cost of each well but sets up the argument nicely.

What does this mean to you?
Since the Bakken was one of the earlier developed shale plays, it’s likely that the signs of slowing being witnessed there are likely to appear at other shale plays as well. While the United States still sits on 29 billion barrels of oil, diminishing returns are sure to set in over the long term. The great news is the U.S. can significantly cut the amount of crude imports, but even then, crude prices will still be dictated by the global market.

The article 30 Billion Barrels of United States Oil Won’t Lower Prices originally appeared on Fool.com and is written by Doug Ehrman.

Fool contributor Doug Ehrman and The Motley Fool have no position in any of the stocks mentioned.

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