SD’s oil, gas assets might lure developers

Thursday, December 13, 2012

Article by: Chris Mueller  |  The Daily Republic


State officials hope South Dakota’s untapped oil and gas resources will attract developers, even with a full-blown oil boom happening across the northern border.


“I think we can realize some economic development in our state,” State Geologist Derric Iles said, speaking Thursday at Highland Conference Center in Mitchell for the South Dakota Telecommunications Association’s Fall Outside Plant Workshop.


“There is potential we have that is unexplored,” Iles said.


To promote oil and gas development in South Dakota, the Department of Environment and Natural Resources has created an online program with interactive maps and a searchable database with information on an array of topics of interest to developers. In the past, the information available through the program was scattered across numerous state offices, Iles said.


“Oil and gas companies no longer have to travel to South Dakota and go to two or three different office locations and spend hours or days thumbing through paper files,” Iles said. “It’s all available at the click of a mouse.”


Creating and upgrading the program has been an ongoing project since 2003, Iles said.


“We’re leading the nation in this endeavor,” Iles said of the program. “There is nobody in the country doing it better than we are.” Despite its potential for more development, South Dakota will never be able to produce oil and gas on the scale North Dakota can, Iles said.


“We’re small potatoes compared to what is going on in North Dakota,” Iles said,


To illustrate his point, Iles pointed out that South Dakota produced 1.6 million barrels of oil in 2011.


It was one of the highest production totals in the state’s history, he said, but North Dakota can produce that amount in two or three days.


“We don’t have the right geology and we don’t have the right framework underground to be a North Dakota,” Iles said.


All of South Dakota’s oil produced in 2011 came from the Red River Formation, located in Harding County in the extreme northwest corner of the state.


“There’s not nearly enough drilling out here to truly know what the potential of the Red River is for oil production,” he said.


Because the Red River Formation is South Dakota’s best known source of oil, it is the most likely target for future development, Iles said.


“I know there is interest,” Iles said. However, bringing developers to South Dakota remains a “hard sell” with North Dakota still booming.


“It’s going to require a little bit of a slowdown in drilling in North Dakota for people to come here,” he said.

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