Bakken Shale in North Dakota Is an Up 'n Comer

The oil industry has known about the Bakken formation since the 1950s, but it was not until the past three years that that Bakken Shale has taken off. In the past, oil companies had no way to tap into the oil buried in deep, dense formations.

Recent technology advancements in drilling have made it economically feasible to do more drilling activity and faster. Taking a page out of Fort Worth's Barnett Shale, Bakken Shale oil and production companies drill thousands of feet below the ground, then turn horizontally and blasting massive amounts of water to crack the gas-bearing rocks.

This drilling process didn't work at first because Bakken is an oil formation not a gas one like Barnett Shale, and oil molecules are larger than gas molecules. What used to take 56 days to drill in 2006 now takes 24 days. The result is 80 million barrels of oil in 2009 to become the country's fourth largest oil producer.

Bakken formation spills over into Canada and Montana. So the industry believes there's much oil waiting in the wings around the U.S. Oil companies hope to find successes in Bakken formation outside of North Dakota and in other formations in California, Colorado and Texas.

Texas, Alaska and California are the current oil production leaders. But North Dakota may surpass Alaska by the end of the decade if Bakken Shale continues to perform at current levels. A U.S. Geological Survey reports that Bakken Shale may produce up to four billion barrels of oil, the largest amount in 40 years of oil exploration in the U.S. However, this still falls short of the oilfield production levels from the 1970s.

The troubled economy had little effect on North Dakota because of Bakken Shale's oil production. The state unemployment rate was over 5 percent lower than the national level. What's more is that North Dakota's government expects to see a surplus in its budget.