Leveraging the Energy Culture

North Dakota and Norway share more than last names. Following a Norwegian delegation to the state, there are many reasons why both parties will improve the way each develop energy resources.
By Luke Geiver | December 04, 2013

During the last week of September, a group of people emerged from a tour bus and scattered out along a gravel road running next to a Bakken well pad. The group had stopped to watch a hydraulic fracturing crew working at the well. Among those standing on the road were several key members of a Norwegian energy delegation sent to the region to learn about the Bakken. Like most tours of the region, the group was there to visually experience the oil patch, but during and after the trip, it became clear that the delegation would leave the Williston Basin with an understanding of the play that could make Norway and North Dakota an oil producing joint venture superpower.

An Unconventional Education
The energy delegation represented a wide range of endeavor, including academia, industry and government. Arne Graue, the head of the Petroleum and Process Technology Research Group, professor of physics at the University of Bergen, visiting scientist at MIT and chairman of the board of the Petroleum Research School of Norway, which represents all Norway universities, headlined the academic members.

During the week-long trip that included stops in the North Dakota communities of Fargo, Grand Forks, Minot, Watford City and Bismarck, Graue made his presence known. Graue signed a memorandum of understanding (MOU) between the Petroleum Research School of Norway and the University of North Dakota that will provide a student and professor exchange opportunity for both to learn about different aspects of how each approaches, utilizes and retrieves energy. “We are considering many of the challenges associated with oil and gas production in the Bakken field in relation to the Norwegian continental shelf where we have 40 years of experience,” Graue says.

In the early 1960s, oil was discovered off the coast of Norway. Since then, the country with a population of roughly 5 million has moved into the top 10 in world oil production rankings. Norway is ranked in the top three in natural gas production, and, at roughly $800 billion, it has the world’s largest sovereign wealth fund. Norway, like every other country in the world except the U.S., treats its underground minerals and resources as property of the country, not the landowner. Although Norway's oil development mainly takes place offshore, the country has still gone through the same rapid development issues, extreme increase in regional energy production, and although North Dakota’s Legacy Fund pales in comparison, an incredible growth rate in country income due to oil and gas.

Even though the country does not perform hydraulic fracturing, Graue and others on the trip shared the same view on the role of the Bakken in relation to Norway. “Unconventional oil and gas production is very important. We are looking for ideas that are useful in North Dakota that could be useful in Norway’s energy production,” Graue says.

Of particular interest to Graue is work being done in North Dakota to better understand enhanced oil recovery and the use of CO2 to do so. “In Norway, with such a harsh environment, it turns out infrastructure offshore is limited. If we don’t come up with technology to increase oil recovery in the next 15 years, the remaining oil does not justify the construction of any new infrastructure,” Graue says. “In North Dakota, you have the opportunity to do the right thing in order to maximize the oil resources. I think the approach and the most important things to do early on, from our perspective, is to focus heavily on research and development, that is what we see,” he says.

Brad Crabtree, policy director for fossil fuels at the Great Plains Institute, a non-profit think tank and organization devoted to fostering better energy use in the Great Plains, also believes research and development can only help the Bakken shale play. Crabtree was largely responsible for making the energy delegation tour happen. In 2011, following Statoil’s (the Norwegian-run exploration and production giant ) acquisition of a major asset base in the Williston Basin, Crabtree began exploring the opportunity he believed was present for North Dakota and Norway. “Statoil’s acquisition was that company’s global effort to move into unconventionals in a big way,” he says. Now, it is an area where North Dakota and Norway can be true world leaders in the systematic deployment of new technology, he adds.

To make that happen, Crabtree made sure that after a North Dakota delegation visited Norway a year ago, that a Norwegian delegation would visit the Bakken. “Our hope and goal with this was to have people in industry, government and research talking and exchanging information, but also forming real partnerships.”

To help foster a greater relationship and continued partnership, Jostein Mykletum, the Consul General of Norway, a position he maintains, in part, out of Houston, was on the tour. “I’m the link between the petroleum industry and Norway,” he says. Because the state is a major player in the global energy mix, he says, Mykletum wanted to see the Bakken, including technologies used related to drilling and water handling. The goal following the trip is to transfer back to his counterparts in Houston and Norway what he learned, he says. “We are here to interlink our technology with the technology here.”

Trip Takeaways
In addition to the signed MOU between UND and Norway, Crabtree says the tour attendees left enthused and fired up. “They were genuinely impressed with the innovation and entrepreneurial attitude that they saw,” Crabtree says. Most of the tour attendees were surprised to see that the oil development in the region had created less of a footprint than they had read about in media publications. All of the attendees believed the state needed to work more to address flaring. Following a visit to Bismarck State College, the group was interested in providing Norwegian students with online classes run by BSC. North Dakota delegates who met with the tour attendees were interested in how Norway handles its sovereign fund and what North Dakota could do to have similar success, Mykeltum says.

Visits to workforce housing facilities, well sites, gas plants and rail loading facilities were also popular amongst the group, Crabtree says. “They wanted to experience it all. They have had that experience of oil booms so they were interested to see how we were managing the boom.”

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Author: Luke Geiver
Managing Editor, The Bakken magazine
lgeiver@bbiinternational.com
701-738-4944