Smet Construction Services recently opened an office in the Bakken Shield in Watford City, North Dakota. The purpose is to participate in the infrastructure build-out in this oil rush that is quickly transforming North Dakota into an energy powerhouse for the United States. Already in five years, Bakken shale oil from North Dakota has surpassed the state of Alaska and has moved the state into the second largest oil producer in the United States, trailing only Texas. Further research provides evidence of additional oil discovered in the Three Forks Formation that resides below the Bakken Formation, enough oil where prognosticators (U.S. Geological Survey, April 2013) have revised their forecasts for the state to have enough oil to drill for the next 80 to 90 years.
The growth in oil production in the Bakken Shale Formation has come about with the use of horizontal drilling also known as hydraulic fracturing or commonly called “fracking”. This drilling method, developed in the 1940’s and improved in the 1990’s, pumps water and sand with high pressure to extract the oil locked in the shale. The method uses a steel casing that is cemented into place to protect the ground water and while it’s somewhat controversial with environmentalists (due to ground water concerns) the method does have an environmental benefit over vertical drilling in that it uses 90% less pad space. This helps to protect the surface environment. Drilling in this way uses fewer wells concentrated in one pad while conventional drilling requires many wells over a wide area. Also, the method reportedly provides for up to 40% more oil per well thus improving recovery efficiencies.
Greg Runnoe, Business Development for Smet, heads up the North Dakota office and is currently working on several projects. When asked about his work, Runnoe said, “They need everything here. We’re helping to build out the infrastructure for the next 30 years.” Runnoe said he has several projects underway including senior housing, light industrial, and office buildings, with a limited amount of residential. “Most of what is needed is housing. People want to bring their families out here and it helps to include housing in your projects.” he said. Once the families arrive, retail typically follows. “Right now, we’re just getting started.”
If you have interest in learning more about our work in the Bakken Shield or North Dakota in general, give us a call. We’d be more than happy to share what we’ve learned about doing business in North Dakota. Lunch is on us!
For more information
Greg Polacheck, Director of Market Research