Currently making the rounds to millions of email inboxes is a viral message that purports to deliver a solution to all of America’s energy needs.

The email refers to “the largest domestic oil discovery since Alaska’s Prudhoe Bay,” which “has the potential to eliminate all American dependence on foreign oil.” Stretching from the Canadian border down into the North Dakota and northern Montana, this miracle field is known as the Bakken Field, and it means “we now have access of up to 500 billion barrels.”

Unfortunately, like Nigerian banking scams and magical male enhancement formulas, this promise of untold crude-oil wealth is mostly vapor.

The email repeats a January column from the Boston Conservative Examiner, which in turn was based on an April 2008 report from the U.S. Geological Survey that makes some eye-opening estimates about the Bakken. The field contains “an estimated 3.0 to 4.3 billion barrels of undiscovered, technically recoverable oil,” the USGS study stated. That’s a whopping 25-fold increase in the amount of recoverable oil compared to the agency’s previous, 1995 estimate of Bakken reserves.

The difference? Technology and economics. Advances in horizontal drilling and hydraulic fracture technology, along with the rise in the price of oil, make the Bakken field look a lot more appealing. That’s good news for companies like XTO Energy and Continental Resources, which both control big swathes of the Bakken. XTO and Continental have seen big run-ups in their share prices since the USGS report came out.

It’s also good news for companies like Royal Dutch Shell, which for years have been trying to extract economical oil from the oil shale reserves in the Green River Basin , in Colorado and Utah. Add the purported reserves in Green River shale to the Bakken finds, and you’re talking trillions of barrels, trapped under the Rocky Mountains. The oil in the Bakken formation is mostly trapped in shale, so success there would predict similar massive production from the Green River fields. Right?

There are a couple of problems with this scenario. First of all, there’s a confusion in terminology: while the Bakken is indeed made up of shale, it’s not oil shale. Oil shale consists of kerogen, which can theoretically be compressed and heated to make crude; the Bakken contains actual, natural oil, trapped in fissures in shale rock. Got it?

Second, the USGS report on the Bakken - which was commissioned by Democratic Sen. Byron Dorgan, of North Dakota — is wildly over-optimistic. Oil that is “technically recoverable” may still be too expensive and too laborious to produce. A long analysis on the Oil Drum blog, written by a petroleum engineer under the name Piccolo, does a thorough job of debunking the study’s claims.

The Bakken Shale is a so-called “resource play,” writes Piccolo, which are “thick, laterally extensive reservoirs usually covering thousands of square miles, and filled with hydrocarbons, but they are difficult to exploit.” The Bakken formation is highly impermeable and shows very low porosity - thus the need for hydraulic fracturing, to make the oil easier to pump.  

“Estimating recovery factor in shale reservoirs is more an art than a science,” Piccolo writes, but is unlikely to be higher than 10-15% for the best wells and is probably only 1% or lower for the rest. “Will Bakken ever produce as much as 4.1 billion barrels, the amount suggested by the USGS estimate? It seems very unlikely.” More plausible is a total production of around 500 million barrels - “equating to about 23 days worth of United States oil usage, spread over many, many years.”

That doesn’t mean the Bakken field is unimportant, or that it shouldn’t be exploited. But don’t believe everything you read in your email.