Friday, April 11, 2008

Who knew there are things in North Dakota?

Aside from the joke in the title, the US geological survey is announcing that an oil reserve found in Montana and North Dakota may hold between 3 to 4.3 billion barrels of oil along with 1.85 trillion cubic feet of natural gas. Although much more difficult to recover than oil from Saudi Arabia or Venezuela, it is possible to recover it and in today's era of high oil prices it has become not only possible but profitable to recover oil from difficult places such as the oil sands area in Canada.

Even though this is an exciting find, and proof that although we should prepare for the worst oil will still be available for at least as long as the 40 years that industry experts are predicting, I think that the United States might be best served to sit on its proven oil fields for now. Just like the oil fields in Alaska, saving them will allow the US to hold a strategic advantage over other countries should the world realize a strong decline in crude oil or if OPEC attempts to embargo oil to the United States. Also, holding on to proven reserves will allow the US to hold on to a commodity that almost assuredly will not decrease in value over the next few years -- making it a very strong investment option.

Here is a map from the USGS (geological survey) indicating the approximate area of the underground reserves.

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