Tuesday, August 14, 2012

America’s New No. 2 Oil State – North Dakota – Sets More Eye-Popping Oil Production Records in June

The “Economic Miracle State” of North Dakota pumped another record amount of oil during the month of June at a rate of more than 660,000 barrels per day, which was an increase of 3.2% compared to oil production in May (see chart above).  North Dakota’s record-setting oil output in June was noteworthy for several reasons:

1) The year-over-year increase in oil production of 71.1% in June followed annual increases of 75.5% in May and 73.5% in April, and those are the three largest increases in North Dakota history.

2) North Dakota produced almost 34% more oil than Alaska in June, marking the fourth consecutive month that North Dakota out-produced Alaska. The Peace Garden State surpassed Alaska’s oil production for the first time in March to become the country’s new No. 2 oil state, behind only Texas.

3) The number of producing oil wells in the state surpassed 7,000 for the first time ever, setting a new record high of 7,130 wells in June.  Over the last year, an average of 5 new oil wells have been put into production each day, and each new well is the equivalent of adding a new $8-10 million business to the state’s economy, see recent CD post for more details.

4) The amount of oil produced per oil well in the state increased to a new record high of 93 barrels per day, an increase of 29% compared to a year ago, and a sign that the efficiency of shale oil production is increasing significantly. Both the increasing number of wells and the increasing output per well is contributing to record high production levels.  Over just the last two years since June 2010, daily oil production in North Dakota has more than doubled.

As a result of the ongoing oil boom in the Bakken area, North Dakota continues to lead the nation with the lowest state unemployment rate at a four-year low of 2.9% in June, and more than five percentage points below the national average of 8.2%. There were nine North Dakota counties with jobless rates at or below 2.0% in June, and Williams County, which is at the center of the Bakken oil boom, continues to boast the lowest county jobless rate in the country at just 0.9%.  The exponential growth in North Dakota oil production has fueled exponential growth in the state’s “Natural Resources and Mining” employment, which has tripled in less than three years, and reached almost 22,000 in June.  Overall, North Dakota state employment has increased by 6.5%, almost five times the 1.3% increase in jobs nationally.

Bottom Line: The record-setting oil production in North Dakota continues to make it the most economically successful state in America, with record levels of employment and income growth, a labor shortage and the lowest state jobless rate in the country, increasing tax revenues, the lowest foreclosure rate in the country, strong housing and construction markets, and jobless rates in nine counties of the Bakken region at or below 2.0%.  Call it the “Dakota Model” of job creation and economic prosperity that is based on developing America’s vast energy resources, which is an economic model that could easily be replicated elsewhere if more domestic energy resources were opened up to exploration and drilling.  Under a Romney-Ryan administration, North Dakota’s job-creating, energy-based economic prosperity will likely spread to new parts of the country starting in 2013.


At 8/14/2012 8:12 PM, Blogger Chance said...

Just change the title of the blog to Carpe Bakken.

At 8/14/2012 8:50 PM, Blogger Benjamin Cole said...

Just a preluse to what is going to happen (and starting to happen) in California.

Globally? Who knows?

I sense we have hit a ceiling on oil prices, somewhere around $80-$90 a barrel, and will go into secular decline from there. This decline could last for decades.

Think what happened after 1979. We had a spike, then a long, long-term decline in oil price all the way into the 1990s.

At 8/14/2012 9:05 PM, Blogger Rufus II said...

Meanwhile, PADD 5 (Ca and Al) decline to the tune of 82,200 bbl/day from Jan to May.

The decline of the existing wells is somewhere in the 25,000 to 30,000 bbl/day per month range, as best I can figure.

There's a fair chance that the Bakken will hit its high point in November, I think. I say that because if we get a cold, El Nino Winter, and they get shut-in for 3 months like they did in '10 - '11, they'll be a Hundred bbl/day Down when they come back to work in March.

That will, quite likely, mark the "peak" for the Bakken.

At 8/14/2012 9:17 PM, Blogger Rufus II said...

They completed 147 wells in June.

ND Prod Stats

And, increased production by about 20,000 bbl/day.

If those 147 wells only contributed 400 bbl/day, that means the existing wells had to decline by close to 39,000 bbl/day.

The Bakken is a 'good thing,' and it came along at a good time, but it's not what you're making it out to be.

At 8/14/2012 9:59 PM, Blogger Mark J. Perry said...

Benjamin: The Wall Street Journal doesn't publish 100% of the "letters to the editor" submitted for consideration to be published. We would never call that policy "censorship," it's just the policy of the paper.

Consider the comments submitted to Carpe Diem to be like "letters to the editor," but with a very high and liberal 90-95% acceptable rate, i.e. almost everything gets published.

You've made your point about North Dakota being a net recipient of federal funds so many times, that it's no longer making a positive contribution to the blog posts about oil output. That North Dakota oil production has increased six-fold in recent years is a statistical, scientific fact that is relevant and interesting by itself. North Dakota's receipt of federal tax payments is not relevant to monthly oil production.

At 8/14/2012 10:12 PM, Blogger Benjamin Cole said...

Dr Perry:

I salute ND's production of oil, and fracking, and have many times said so.

What I find misleading to is to speak of ND's economic condition without reference to the fact it is a huge net recipient of federal funds, a virtual (old sense of the word) ward of the federal government.

When ND residents get, net, $10k in federal spending every year--$40k for a family of four--there is a necessary framework to discuss ND's economic fortunes.

ND'ers getting $40k per family in federal stimulus easily swamps the stimulus (a much-admired stimulus) the state gets from the oil industry.

At 8/15/2012 6:36 AM, Blogger JJ Butler said...

The Eagle Ford, Bakken and now Permian are booming. Dependent on the new oil price deck. And world oil production is on an undulating plateau, the shape of which is dependent upon price...

At 8/15/2012 10:14 AM, Blogger Paul said...


"ND'ers getting $40k per family in federal stimulus easily swamps the stimulus (a much-admired stimulus) the state gets from the oil industry."

Your boyfriend was out demonizing Ryan in Iowa yesterday for holding up the lard-laden farm bill. No commentary about that?

At 8/15/2012 11:52 AM, Blogger Breaker Morant said...

RufusII>>There's a fair chance that the Bakken will hit its high point in November, That will, quite likely, mark the "peak" for the Bakken.<<<<

I will note this somewhere-we have a solid prediction of a peak in ND for November 2012 from RufusII.

At 8/15/2012 2:25 PM, Blogger bart said...

US natgas rig count down trend

Natgas prices recebt peak around $3.20, now $2.75

At 8/15/2012 4:03 PM, Blogger $9,000,000,000 Write Off said...

City Journal's Summer print edition has a very nice article about California's enormous reserves. The Monterey Formation has four times the Bakken shale formation of recoverable oil. It may have 500,000,000,000 barrels, on par with anything in Saudi Arabia.

The same issue has a short, informative article on coal.

City Journal generally publishes its print editions online at some point.

At 8/15/2012 5:16 PM, Blogger Breaker Morant said...

It struck me that RufusII could be almost right with his prediction of a November 2012 peak for ND oil production if a re-elected Obama admin makes quick, hard moves against fracking. If so, I would not accept his prediction as valid-reason-political, not geologic/economic.

At 10/17/2012 11:44 AM, Blogger Unknown said...

A job on an oil rig can pay as much as six figures. The starting salary for truck drivers is around $80,000. While the nation's unemployment rate is 9.1 percent, Willis-ton's unemployment rate is less than 1 percent. I just got picked up yesterday by a company paying $240,000/yr with benefits and a year-end bonus. Found the job looking around on Google: North Dakota Oil Jobs


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