Wednesday, April 28, 2010

Oil and Jobs Are Booming in North Dakota

BISMARCK, N.D. (AP) - North Dakota has surpassed Louisiana as the fourth-largest oil-producing state in the nation, the U.S. Energy Department says. North Dakota has risen from being the ninth-largest oil-producing state in 2006.

North Dakota's oil production has risen sharply with improved horizontal drilling technology in the rich Bakken shale and Three Forks-Sanish formations in the western part of the state. "In the Bakken and the Three Forks, they're having great success poking new holes,'' Grape said. "If you look at the increase, it doesn't look like it's letting up.''

BISMARK TRIBUNE - It has taken millions of dollars in investment by private industry to bring the necessary pipelines and rail facilities up to the volume necessary to handle the state's record crude oil production. It's an investment that the citizens of North Dakota should appreciate. It means jobs and state tax revenue.

The state set a per-day record of 261,000 barrels in February. Before the infrastructure improvements, the state's pipeline, rail and refining capacity was only 189,000 barrels a day. Now, based on recent investments, that capacity is about 400,000 barrels a day. It should be enough to handle the expected growth in crude oil production for the next two years, if the price remains steady. And recent history suggests that production from the Bakken Formation will continue to grow beyond that limit.

MP: North Dakota currently has the lowest unemployment in the country at just 4%, and no other state is even really close - the next lowest jobless rate is 4.8% for South Dakota, and Michigan is more than ten points higher at 14.1% for March. The oil and jobs boom in North Dakota is creating a new problem - a temporary shortage of housing for all of the workers, see NY Times article.


10 Comments:

At 4/28/2010 9:18 AM, Blogger juandos said...

"The oil and jobs boom in North Dakota is creating a new problem - a temporary shortage of housing for all of the workers"...

Think back to the seventies and the North Slope...

The same problems happened there also...

 
At 4/28/2010 10:34 AM, Anonymous gettingrational said...

I suggest that the housing crisis in ND can be solved by going Mandan lodging like Lewis and Clark!

 
At 4/28/2010 10:42 AM, Anonymous DrTorch said...

Seems like ND's boom could help Elkhart, if they started producing viable temp housing for these oil-workers.

 
At 4/28/2010 2:01 PM, Anonymous Lyle said...

Of course this is a standard story you could write about any boom area, just change the local. See Wyoming during the Coal and Coal Bed Methane rush, see Western Colorado during the oil shale rush... Infrastructure can never respond fast enough to a real boom and always overshoots as the boom dries up.

 
At 4/28/2010 3:01 PM, Blogger Walt G. said...

It's easy to have low unemployment when you are 48th in population with less than 3/4 of a million people.

Michigan does not have an unemployment problem. We just have too many people without jobs who will not leave. Come on you all. Everyone without a job in Michigan, go to North Dakota today--just leave--we want 100% employment in this state tomorrow.

 
At 4/28/2010 5:49 PM, Blogger sethstorm said...


It's easy to have low unemployment when you are 48th in population with less than 3/4 of a million people.

That point is quite valid in that the unemployment ranking isnt corrected for population.



Michigan does not have an unemployment problem. We just have too many people without jobs who will not leave. Come on you all. Everyone without a job in Michigan, go to North Dakota today--just leave--we want 100% employment in this state tomorrow.

The problem is how well can those from Michigan, Ohio, etc. adapt (and be adapted) to such a skillset? That's a particularly unique industry.

At this point, I'd have no issue with it at the right price and skillset. The only way I'd move is if it was worth it - since 1000+ miles is a bit far to go for temporary work or to hear that I was "not selected". If you want an example of such dislocation of skillsets vs. available jobs, consider myself as an example.

My background is IT, not oil drilling. Unless there was some way to get around the pickiness in selection (for anything that would need my talents in that area of ND), it would be burning cash at a loss. About the same could be said for your fellow Michiganders and their particular skillset differences.

Without taking into account the skills and the retraining required, you'd simply be moving the unemployment out of Michigan.

 
At 4/28/2010 6:21 PM, Blogger Walt G. said...

Sethstorm, I'm just kidding, but the people in the generation before mine moved to the where they could find work. That's why I am a transplanted hillbilly. The career advisors at the college where I teach recommend keeping all of your options open, which includes moving. I think that is good advice.

Just out of curiousity, I looked up the number of cattle and the number of people in North Dakota and Michigan. North Dakota has a 2.69 cattle-to-people ratio and Michigan has a 0.11 cattle-to-people ratio. It looks as if North Dakota is a good place to be if you are a cow--until dinner time!

 
At 4/28/2010 8:34 PM, Anonymous grant said...

I have read that bakken is a really big genuine deal check it out

 
At 4/29/2010 2:49 PM, Anonymous Daniel said...

I hate to be the bubble burster here, but analysts familiar with the Bakken foresee a production peak plateau of 400,000-500,000 bpd somewhere in the future. While the plateau is expected to last a decade or longer (and this will make the Bakken a worthwhile producer), it still falls considerable short of what Prudhoe Bay and the other N Slope oil fields once churned out, and it's short order for a country consuming over 18 mbpd. To make up for what the N Slope or Cantarell once produced, we're going to need a few Bakkens.

That having been said, for anyone seeking some positive news, the Eagle Ford shale in Texas may hold some promise. However, considering BP's Gulf of Mexico disaster, any attempts to further expand offshore drilling or to open up ANWR are probably going to be put off for a while.

 
At 4/29/2010 9:39 PM, Anonymous Anonymous said...

considering BP's Gulf of Mexico disaster, any attempts to further expand offshore drilling or to open up ANWR are probably going to be put off for a while.

No kidding there. I guess the oil is already starting was along Louisiana's coast. What a mess.

 

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