North Dakota’s own estimate of how much oil can be gotten economically, using current technology, from the Bakken formation in the Williston Basin is slightly above or below 2.1 billion barrels, Lynn Helms reported this morning at a conference here.

Helms, director of the state’s department of mineral resources, said that estimate is based on a new study by the state that estimates there is as much total oil, or “oil in place,” in the Bakken formation as some of the largest estimates. He said the state’s new study is in line with the estimate made by the late geologist Leigh Price that the Bakken’s geology should have resulted in the theoretical generation of up to 400 billion barrels of oil. Helms spoke at the Williston Basin Petroleum Conference & Expo. About 1,350 oil industry representatives from several states filled the conference, forcing organizers to stop registering people.

The figure Helms reported, the state’s first ever such formal estimate of the Bakken formation’s potential, is similar to the one the U.S. Geological Survey earlier this montho in assessing the Bakken formation’s recoverable oil in Montana and North Dakota, Helms said Sunday night. The federal assessment was that 3 billion to 4.2 billion barrels, with a “mean” of 3.65 billion barrels, of oil could be recovered using today’s technology in the unconventional shale formation; about 2.6 billion under the North Dakota side and slightly more than 1 billion under the Montana side, Helms said.

The state Geological Survey used different methods than the USGS, Helms said. “It’s encouraging that they are as close as they are,” he said of the federal and state assessments. The state broke out a county-by-county compilation of estimated oil “in place,” arriving at 160 billion barrels. Then, using industry formulas and averages of actual production, the state Geological Survey’s geologist figured that at least 1.4 percent of that amount could be recovered “economically,” Helms said.

The 1.4 percent figure, representing 2.1 billion barrels, is “very conservative,” compared to industry standards, especially in conventional oil fields where up to 50 percent of “in-place” oil reserves are considered recoverable, Helms said. The Bakken is an unconventional formation that requires expensive technology, technique and time to get the oil out of the rock.

Using horizontal drilling, typyical wells in the Bakken go down nearly two miles, then slant off, either down or sometimes even up, following the relatively thin Bakken formation another mile or two. Some have compared it to, alternatively, recovering asphalt from a driveway, or going in the side of an Oreo cookie to extract the filling.

While the USGS’s figure for recoverable oil in the Bakken is comparable to the state’s new estimate, the feds did not release any estimate of total oil “in place,” as did the state Geological Survey.If prices go up or technology improves, the total amount of oil taken from the Bakken in the state will go up, Helms said. Either way, that much oil means a century of steady oil production, he said. There are 70 drilling rigs punching new holes in the ground now, the biggest number since the mid-1980s. Daily oil production is near 130,000 barrels. “We could push our production to 200,000 barrels a day and extend the life of our oil production well past 2100,” Helms said.”It will take 15 years just to drill” wells to begin harvesting the Bakken, he said.

Wells can produce for decades.North Dakota’s oil play is getting not only nationwide interest, but worldwide attention, said Ron Ness, president of the Petroleum Council, a trade association with 135 oil-related companies as members.

Gerry Van Dijk, a banking and investment attorney from Amsterdam in Holland, was the center of lots of attention Sunday at the conference. “I read about North Dakota’s oil in an article in the New York Times in December,” he said. By January, he had come to North Dakota. He represents a pool of private investors in Holland who “are looking for opportunities,” he said. In the 1980s, his investors put money into oil drilling efforts in Texas, he said.

In Europe, national governments own all the mineral rights, so there isn’t the opportunity for investors to get involved in smaller exploration ventures, Van Dijk said. The North Dakota oil patch, where many individuals, as well as the state and federal government, as well as railroad companies and other corporations, own the rights to minerals underground, is complicated and different, Van Dijk said.

“It makes it very interesting and exciting for us,” he said. “We’d like to make a first investment of $100 million and then see how it goes.”

He’s already linked up with Lenny Behm, president of Behm Energy, Inc., in Minot. Rather than some of the large oil companies based in Texas or Colorado, Behm Energy is a second-generation North Dakota company that started as a “Mom and Pop operation,” in the 1940s in Minot, Behm said. “We’re just friends,” he said of his relationship with Van Dijk, who seemed sold on putting some money into Behm’s drilling ventures.

It takes contracting with up to 60 separate service and production firms to get one well drilled, and lots of risk on his part, said Behm, who used to have a propane shipping company in Grand Forks.Van Dijk is leaving for home today, but will be back soon, and regularly, he said. “We will need another three months,” he said of his investor group’s schedule before any of their money is sunk into a North Dakota well.

Behm praised Gov. John Hoeven for making quick moves to encourage oil industry expansion in the state the past two or three years, including better ways of getting the oil out of state to market.Hoeven, who spoke Sunday night at the conference, listed four proposals to increase oil refining capacity.*The state’s Oil and Gas Research Council funded a feasibility studyfo ra private refinery near Williston, N.D.; the study is due in September.

*The Three Affiliated Tribes on the Fort Berthold Indian Reservation based in New Town, N.D., which includes some of the land over the latest find of Bakken oil surrounding Parshall, N.D., is applying for a federal permit to build a refinery.

*American Lignite Energy is studying a plant that would convert lignite coal to 1.4 million gallons of liquid fuel a day.

*Tesoro is using state sales tax incentives to increase production at the state’s only oil refinery at Mandan, N.D.

Hoeven said he’s also pushed to have the state’s Pipeline Authority pull out all the stops to aid companies in increasing pipeline capacity to get oil out of the state to markets.

Hoeven said one marked improvement of late is reducing the traditional discount assessed in the market for North Dakota crude oil, which has ranged from $8 to $10 a barrel off the New York market for West Texas crude. For the state’s best, sweetest crude, that discount is down to $3 a barrel, the lowest ever, Hoeven said. For the lower quality “sour” crude that makes up about a third of the state’s production, the discount is down to about $7 off the New York price, which also is the lowest ever, the governor said.

The state looks to have a $600-$700 million surplus by the end of this biennium, due in no small part to the increase oil production tax revenue because of increased production, Hoeven said. He’s proposed using some of the money to revamp the way the state funds local schools, including offering relief to local property taxes, that would push the state’s share of school funding from 50 percent to 67 percent, Hoeven said.