Federal Grant Funds Major Bakken Enhanced Oil Recovery Initiative

A major federal grant is set to accelerate efforts to unlock the next stage of production from North Dakota's Bakken formation. U.S. Senator John Hoeven announced the U.S. Department of Energy has officially awarded $36 million to the "Crack the Code 2.0" initiative, according to a report from the North Dakota Monitor.

The total $157 million project includes financial contributions from the state and several oil companies. Its goal is to develop cost-effective technologies for enhanced oil recovery (EOR) to extend the life of oil fields like the Bakken. "We have to have enhanced oil recovery," Hoeven said. "It has national ramifications."

The effort will be led by the Energy and Environmental Research Center (EERC) at the University of North Dakota and will involve multiple large-scale pilot projects run by four different oil companies. North Dakota Petroleum Council President Ron Ness said the EERC will be the "nucleus" of the work, tying together the companies' efforts. "Every company and every engineer has got a better idea than their competitor. We’ve got to bring the best of all those ideas together. That’s what the EERC does," Ness said.

The funding commitment comes as the EERC faced recent staffing cuts. UND confirmed 27 positions were cut and 13 employees were furloughed due to funding delays. An EERC official had told lawmakers in January that the center was waiting on federal awards for over a year in some cases. Hoeven said the DOE grant, available immediately, and the renewal of a $25 million cooperative agreement between the agency and the EERC will help. UND stated it intends to bring furloughed workers back when funding is available.

The project addresses a critical economic hurdle for the Bakken. Small-scale EOR pilot projects in the state have shown positive technical results but have not yet proven economically feasible, according to Lynn Helms, North Dakota's former top oil regulator and now leader of EOR efforts with the Petroleum Council. "That’s what these major, large demonstration projects are all about. We’ve had smaller demonstration projects that have shown we can increase oil recovery, but not at economic levels," Helms said. The new pilots need to demonstrate a sufficient production increase "to make this an economic play. The costs are very, very high."

John Harju, a vice president with the EERC and a leader of the effort, said the pilot projects scheduled to begin over the next 12 months are on a much bigger scale than previous attempts. The work is expected to kick into high gear later this year, focusing on finding cost-effective ways to use EOR in shale formations like the Bakken, where rock must be hydraulically fractured before oil can be extracted.