The Bakken Formation has emerged as the leading tight oil resource play. The Bakken Formation is a large unconventional petroleum and natural gas resource that is part of the Williston Basin, a historic oil-producing area underlying parts of North Dakota, Montana, and the Canadian provinces of Saskatchewan and Manitoba (see Figure 1 ). The key to its development lies now in technologically advanced horizontal drilling and hydraulic fracturing methods. The U.S. Geological Survey's (USGS) mean estimate for the Bakken is that it may contain 3.65 billion bbls of undiscovered oil (less than 3% of total U.S. estimates), 1.85 trillion cubic feet (tcf) associated/dissolved undiscovered natural gas (less than 1% of total U.S. estimates), and 148 million bbls of undiscovered natural gas liquids (NGLs) (there is not a comparable estimate for total U.S. NGLs) recoverable under current technology. The USGS announced in July 2011 that it will reassess the resources in the Bakken by the end of 2013. In the development of tight oil and shale plays, the pace of this change is rapid. High oil prices and low natural gas prices have encouraged oil and gas producers to shift their exploration and development activity from gas-rich areas to areas with oil and gas liquids deposits. Pipelines that would take oil and natural gas produced from the Bakken to refineries and to markets are at full capacity. Oil producers have resorted to rail and truck transportation to move Bakken oil production to market. It could start operating in 2015 if it and the Keystone XL pipeline receive regulatory approvals. Congress has asked the Environmental Protection Agency (EPA) to study this issue, and other studies are underway as well. Water Quality Issues Associated with Bakken Development

Protecting groundwater quality during oil production is acutely important in the Bakken region, where aquifers often provide the principal source of water for domestic, agricultural, stock and municipal needs. While the use of hydraulic fracturing and directional drilling has enabled the oil industry to greatly increase domestic oil production, concern has emerged regarding the potential impacts that this process may have on groundwater quality. The Presidential Permit for the Keystone XL project was denied on January 18, 2012; however, TransCanada resubmitted its application to the State Department on May 4, 2012, with a different configuration. Additionally, the Keystone XL pipeline would eventually connect to another new TransCanada pipeline, the Gulf Coast pipeline, and run to refineries on the Gulf Coast, which would help alleviate a pipeline bottleneck in oil transportation at Cushing, OK. In addition to the above issues, development of the Bakken is facing the same environmental scrutiny as shale gas and other unconventional oil and gas resources, as they all use the controversial production technique of hydraulic fracturing. The rapid growth in the use of this technology for oil and gas production has raised public concerns, particularly over its possible impact on water resources. Currently, states broadly regulate oil and gas exploration and production on state and private lands (and often on federal lands within the state). Lake Sakakawea is managed by the Army Corps of Engineers. While administering a fee would be consistent with the authority used as the basis for the surplus water contracts and Corps practices elsewhere, the Corps' potential fee for the storage of Missouri River water has frustrated North Dakota stakeholders that consider the Corps to be interfering with a state's right to allocate its water resources and being insensitive to the history of the development of the Missouri River reservoirs (e.g., flooding of a significant quantity of land in North Dakota and promised irrigation projects).
The Bakken Formation is a large unconventional petroleum and natural gas resource underlying parts of North Dakota, Montana, and the Canadian provinces of Saskatchewan and Manitoba. Bakken oil production is now viable because of advanced horizontal drilling and hydraulic fracturing methods. Growth in production is rapidly changing.
High oil prices and low natural gas prices have prompted shale gas producers to turn to shale oil or tight oil. The Bakken Formation has emerged as a major tight oil resource "play." The U.S. Geological Survey (USGS) estimated that the Bakken may contain 3.65 billion barrels (bbls) of undiscovered oil (or less than 3% of total U.S. estimates), 1.85 trillion cubic feet (tcf) associated/dissolved undiscovered natural gas (less than 1% of total U.S. estimates), and 148 million bbls of undiscovered natural gas liquids (NGLs) recoverable under current technology. USGS announced in July 2011 that it will reassess the Bakken resources.
Full development of this resource faces a number of hurdles. A major constraint to more vigorous development of the Bakken is the lack of pipeline capacity to move more crude oil to refineries. A proposed pipeline, the Keystone XL pipeline, would extend from Canada to Nebraska, where it would connect to another TransCanada pipeline for transport to Gulf Coast refineries, and could transport oil from the Bakken. The original proposed Keystone XL pipeline did not receive a necessary Presidential Permit; however, TransCanada, the company that proposed the pipeline resubmitted its application to the State Department on May 4, 2012, with a different configuration. Flaring of natural gas in association with Bakken oil production has also attracted a lot of interest. If producers are forced to decrease flaring it would also likely result in oil production being curtailed.
Another issue potentially affecting development of the Bakken is the need to make use of hydraulic fracturing. This technology is the subject of increasing regulatory scrutiny, along with public concern over its possible impact on water quality. The Environmental Protection Agency (EPA) is conducting a congressionally mandated study on the impact the technique may have on drinking water, and the Department of Energy (DOE) has undertaken a broader assessment of the potential environmental effects of this practice. Legislation pending in the House and the Senate would authorize EPA to regulate hydraulic fracturing used in oil and natural gas production. Currently, states broadly regulate oil and gas exploration and production on non-federal lands, and proposals to give EPA new authority in this area have been highly controversial.
A longer-term constraint may be water availability and access, as the industry's cumulative water demand for fracturing and other well development activities expands. Groundwater tables in the Bakken region have been falling as water extractions for municipal, agricultural, industrial and other purposes have exceeded aquifer recharge. The Army Corps of Engineers announced in May 2012 that it is moving forward with processing requests from oil development interests for access to a key surface water source, Lake Sakakawea on the Missouri River in North Dakota. Initially the Corps will not assess a fee for the withdrawn water, while it undertakes a pricing policy rulemaking. Uncertainty over charges related to water withdrawn from the lake has ignited concerns among those withdrawing water for other purposes (e.g., municipal and agricultural uses) and the state's authority over surface waters within its borders.