Bakken Monitoring

A revolution is convulsing the North American oil market, and its unlikely center is North Dakota. Oil found in shale formations in the state, called Bakken, together with ever increasing supplies of non-conventional oil from Canada, has upended the supply-demand balance in the American Midcontinent.

The effect of the entry of these new crude oil sources has been felt wide and deep. It has led to the reversal of oil pipelines, the energy world’s equivalent of making rivers flow back to their source.

The market has struggled with understanding the impact of these new developments.  Production of crude oil in North Dakota, and in the other new oil areas such as the Eagle Ford and the Niobrara, is relatively well understood.  Market participants and analysts rely on rig counts and average well flow rates to estimate how much oil is being pumped out of the ground.  The disposition of this oil – where it ends up – is less transparent and more important.

Genscape uses its proprietary pipeline monitoring technology to measure the flow of oil leaving the production fields in North Dakota on all the lines. It also tracks the transport out of the state by rail by monitoring loading terminals in North Dakota and receiving terminals in Oklahoma and Louisiana.

A key component in understanding the impact of this new oil on the market is assessing the pace at which infrastructure is put into place. In addition to providing half-hourly pipeline flows and daily rail car counts, Genscape also regularly assesses the completion rate of new infrastructure – pipelines, rail tracks, storage tanks – that is critical to the growth of Bakken crude oil deliveries.