ROSS, N.D. — A North Dakota company has been cited for nine safety violations in the death of a worker who was cleaning the inside of a crude oil tanker.
The Occupational Safety and Health Administration is proposing $28,000 in fines for Plains Trucking LLC in Ross. The company has two weeks to pay the fines or contest the citations and penalties.
OSHA officials say the violations included failure to evaluate the need for personal protective equipment, lack of machine guarding on pulleys and belts, use of electrical lighting that was not improved, and failure to compile a list of chemicals.
The incident happened on March 27 while the worker lowered a treble light into the tanker. The light was not approved for the conditions.
Company officials were not immediately available for comment.
Copyright 2013 The Associated Press.
BISMARCK — Growing up in North Dakota, I have been able to experience the state both before and during the oil boom.
During my childhood, I spent a lot of time in western North Dakota and watched as many towns seemed to slowly wither away as more and more residents and businesses moved either out of state or to larger cities within the state.
For North Dakotans like me who graduated from high school in the past decade, two major events have shaped the economic outlook of our careers.
While the recession and housing crisis sent the U.S. economy into a tailspin, the downturn was superseded for North Dakota youth by the Bakken Oil Boom, an event that made North Dakota an island of prosperity in a sea of states in financial turmoil.
For young adults who elect to stay in North Dakota, the opportunity to build satisfying, rewarding careers has never been better. In fact, because of our booming economy, we have great-paying job prospects not only in technical professions such as engineering, computer science, welding and medicine, but also in many other careers such as finance, marketing and accounting.
The energy industry provides careers to people of all educational backgrounds with tremendous potential to move up the career ladder.
I chose to major in mechanical engineering at North Dakota State University. The major should provide me with a wide range of job opportunities and let me move within the industry.
I’ve had the privilege of protecting our state’s natural resources and ensuring the safety of our well sites through environmental surveys as well as spending the past two years in Minot within the pipeline industry — an industry that offers a permanent solution to our dependence on trucking, making our roads less crowded and safer.
It is clear at this point that the Bakken Oil Boom isn’t merely a short term (black) gold rush; it’s here to stay.
My generation, new to the workforce, will find tremendous career opportunities because of our thriving energy industry, jobs that as few as 10 years ago were not available in North Dakota.
The West Coast is bringing in record amounts of crude from the interior of the U.S., cutting the price of foreign supplies and heralding the end of some overseas imports by next year.
California, the world’s ninth-largest economy, shipped via rail more oil than ever in February from North Dakota’s Bakken formation, while Russian imports to the region slid to 713,000 barrels from a June 2012 record of 6.53 million. The premium for Russia’s East Siberia-Pacific Ocean oil has retreated 60 percent against U.S. benchmark West Texas Intermediate since Feb. 20.
The drop in foreign purchases underscores the U.S.’s shifting needs as soaring output in states such as North Dakota and Texas put the country on course for energy self-sufficiency for the first time since Harry Truman was president in 1952. Photographer: Eddie Seal/Bloomberg
The drop in foreign purchases underscores the U.S.’s shifting needs as soaring output in states such as North Dakota and Texas put the country on course for energy self-sufficiency for the first time since Harry Truman was president in 1952. The West coast, home to 17 percent of the nation’s refining capacity, may be able to dispense with overseas light, sweet oil even as output from Alaska’s North Slope and California wanes.
“The crude supply on the West Coast is changing as we speak,” said Hege Dammen, a Weston, Connecticut-based solutions manager at Spiral Software, an oil-trading and refining software provider, and former crude trader for Norwegian Norsk Hydro ASA. (NHY) “There’s been a lot of focus on getting oil by rail to the Gulf Coast, and the West Coast is moving forward now.”
ESPO CrudeESPO crude, a light grade shipped by pipeline from fields in eastern Siberia to the Pacific port of Kozmino for export, dropped $1.79, or 1.7 percent, to $103.67 a barrel today, the lowest since June 13, data compiled by Bloomberg show. The oil has declined 12 percent from this year’s peak of $118.36 a barrel reached on Feb. 14.
The premium for Arab Light crude against WTI weakened to 85 cents a barrel, the lowest level since January 2011 and less than a 10th of what it was a year ago. It has averaged $10.56 this year.
Oil imports to the West Coast in the week ended June 14 averaged 1.2 million barrels a day, 9.5 percent below a year earlier, according to the Energy Information Administration, the Energy Department’s statistical arm. The western region, classified by the EIA as PADD 5, covers Alaska, Arizona, California, Hawaii, Nevada, Oregon and Washington.
California, PADD 5’s largest refiner, received an unprecedented 206,172 barrels of Bakken crude by rail in February, eight times the volume from a year ago. The state took in 94,695 barrels of Bakken crude in March, up from 70,706 a year earlier, according to the latest data available from the California Energy Commission.
Last year, Bakken oil began arriving in California on marine vessels for the first time, totaling 89,462 barrels, according to the commission’s data.
Oregon TerminalA complex along the Columbia River in Oregon, owned by Waltham, Massachusetts-basedGlobal Partners LP (GLP), began in November off-loading trains of oil to send it by water to markets along the Pacific Ocean.
“Global Partners is getting some of this Bakken from rail-cars onto the water, and a number of California’s refiners are willing to buy it from them, just to get a taste of it,” Dave Hackett, president of energy consulting firm Stillwater Associates in Irvine, California, said by telephone. “It’ll back out the foreign stuff. That’s the first stuff that gets knocked out.”
Tesoro Corp. (TSO) and Savage Companies, based in Salt Lake City, are planning a similar rail-to-water project at the Port of Vancouver in Washington that could move as many as 120,000 barrels of oil a day from railcars onto marine vessels.
Tesoro ShipmentsTesoro, based in San Antonio, is already using rail to bring 50,000 barrels a day of Bakken to its Anacortes refinery in Washington and 5,000 barrels to the Golden Eagle plant in Northern California. Alon USA Energy Inc. (ALJ)
, Phillips 66 (PSX)
, BP Plc (BP/)
and Valero Energy Corp. (VLO)
are planning rail-offloading stations at their West Coast refineries.Plains All American Pipeline LP (PAA)
, based in Houston, plans to start taking oil off railcars at a 140,000-barrel-a-day complex near Bakersfield, California, in the first half of 2014 and ship it by pipeline to refineries in the state.
The West Coast will more than double rail unloading capacity to about 600,000 barrels a day by the end of 2014 from 250,000 barrels a day currently, according to Andy Lipow, president of Lipow Oil Associates LLC in Houston.
The boom in oil production, driven largely by a combination of hydraulic fracturing and horizontal drilling, helped the U.S. meet 84 percent of its energy needs last year, the highest annual level since 1991, EIA data show.
Sending Bakken by rail to the West has proven so affordable that Kinder Morgan Energy Partners LP (KMP), based in Houston, suspended a proposal last month to build a pipeline that would have carried oil from Texas’s Permian Basin to California after failing to attract enough interest from shippers.
Rail CostsCarrying crude from the Bakken formation on railcars costs about $9.75 a barrel to Washington state, $13 to Northern California and $14 to the Los Angeles area, Tesoro Logistics LP (TLLP)estimated in a presentation June 7.
The increasing volume of domestic oil making its way to the West Coast will drive light oil imports out of the region by the end of 2014, Paul Y. Cheng, an analyst at Barclays Plc (BARC)’s investment-banking unit in New York, said.
“The entire non-imported West Coast crude slate could undergo a $3- to $4-a-barrel downward shift as the marginal price-setting barrel switches from Alaska North Slope or imported light to Bakken crude rail on a spot basis,” Cheng said in a research note.
Crude BlendingWest Coast refineries, capable of running crudes more sour and heavier than the light, sweet oils coming out of U.S. shale plays, are blending Bakken and Canadian heavy in attempts to come up with Alaska North Slope “look-alikes,” said Dammen, the software solutions manager for Cambridge, England-based Spiral.
“When you blend them, you can actually come fairly close to ANS, maybe even having the same yield curve,” she said.
Alaska North Slope crude, about a 10th of California’s oil diet, is trading near a 16-month lowagainst the U.S. benchmark West Texas Intermediate crude, according to data compiled by Bloomberg. The oil was unchanged versus WTI today at a premium of $9.40 a barrel.
California’s Kern River and Midway-Sunset grades both weakened to 18-month lows versus WTI futures last week.
Saudi Arabia, the largest oil exporter to the West Coast, supplied 207,000 barrels a day in March, the lowest for that month since 2010, EIA data show. Arab Light crude to the U.S. dropped $2.28, or 2.4 percent, to $94.44 a barrel today, a two-month low and down 12 percent this year, according to data compiled by Bloomberg.
Record Output Bakken crude for delivery at Clearbrook, Minnesota, was unchanged at $1 a barrel below WTI today, data compiled by Bloomberg show. North Dakota’s output of the oil climbed to a record 727,149 barrels a day in April, preliminary data compiled by the state’s Industrial Commission show. Production was up 33 percent from a year earlier.
West Coast refineries may eventually reach a limit to the amount of light, sweet domestic oil they can blend and run, according toAndrew Layton, a consultant with Walton-On-Thames, England-based KBC Advanced Technologies Plc. (KBC)
Mixing the wrong kinds and percentages of light, shale oil with other crudes such as heavy Canadian can produce elements that damage plant equipment, a phenomenon known as “incompatibility,” Layton said. A “cocktail” of chemicals injected into crude blends can also corrode refinery equipment if not handled and monitored properly, he said.
“Individually, they may look innocuous,” Layton said. “Together, they may cause a problem.”
Equipment UpgradesTo push past the blending limits, the region’s plants could consider equipment upgrades, Hackett said. The refiners would have to weigh any long-term investments against increasing environmental regulation, particularly in California, he said.
The state’s cap-and-trade program regulates greenhouse-gas emissions from industrial plants including oil refineries with a goal of cutting pollution roughly 15 percent by 2020. California’s low-carbon fuel standard punishes fuel manufacturers who use crudes requiring more carbon to produce and transport than others.
“Investing in new equipment presumes that refiners still want to invest here,” Hackett said. “If they wanted to make changes to run more light, they could, but it’s kind of a bridge too far to say they will just yet.”
To contact the reporters on this story: Lynn Doan in San Francisco at email@example.com
; Dan Murtaugh in Houston at firstname.lastname@example.org
To contact the editor responsible for this story: Dan Stets at email@example.com
The Bakken is still rockin' for Kodiak Oil & Gas , which today announced it plans to spend $660 million cash to acquire additional core producing properties and undeveloped leaseholds in the Williston Basin of North Dakota. The property includes Bakken and Three Forks properties.
Kodiak entered into a definitive purchase and sale agreement with privately held Liberty Resources to acquire approximately 42,000 net acres in McKenzie and southern Williams Counties, N.D., bringing Kodiak's pro forma total lease holdings in the Williston Basin to almost 196,000 net acres. It will also assume Denver-based Liberty's contract for one drilling rig, which has 14 months remaining on its term.
Kodiak Chairman and CEO Lynn Peterson said: "The increase to our inventory of future drilling locations provides the company with a longer runway of sustainable growth. As we continue our down-spacing work in our Koala and Smokey areas, we would expect the number of locations to increase significantly. We also benefit from the addition of the production and its cash flow, as well as proved reserves included in the deal."
According to the company, the southern Williams County lands, approximating 14,000 net acres, are adjacent to Kodiak's core Polar area. An additional 25,000 net acres are in McKenzie County, west of its Koala and Smokey areas.
Net oil and gas production from the property in the pending acquisition is currently approximately 5,700 barrels of oil equivalent per day, the average net production for May. "Production is expected to increase before closing as completion operations are currently under way," said the company in its press release.
Kodiak expects to fund the acquisition through borrowing under a revolving credit facility. Based on the additional capital expenditures for the acquisition net of cash flow from those assets, Kodiak anticipates investment and projected cash flow to be "more or less equal for the remaining periods of 2013." The acquisition is expected to close in July.
The article Kodiak Oil & Gas Increasing Williston Basin Resources originally appeared on Fool.com.
WILLISTON, N.D. – In one month, North Dakota wastes a resource capable of heating about 80,000 homes for one year.
But new processing plants and pipelines to keep natural gas from being flared have recently come online or will be completed soon. That could make 2013 the year North Dakota starts to turn that around, says Justin Kringstad, director of the North Dakota Pipeline Authority.
“All things are aligning in a very positive direction,” Kringstad said.
Every month, Kringstad monitors how many new wells are connected to natural gas gathering lines.
With a lack of infrastructure and rapid oil development in North Dakota, the state developed a backlog of wells that need to be connected to gathering lines, he said.
The American Gas Association says 1 billion cubic feet of natural gas can meet the needs of 10,000 to 11,000 American homes for one year.
In March, the state flared about 7.8 billion cubic feet of natural gas, or 29 percent of the state’s output, according to the Department of Mineral Resources. North Dakota flared a historical high of 36 percent of its natural gas output in September 2011.
Kringstad said he expects the percentage of natural gas flared to come down as the state catches up to the new wells and is able to begin working on the backlog.
“Everyone’s optimistic that things are starting to line up properly, that the pace has been increasing,” Kringstad said. “A lot of great things are going to continue to happen over the next year to three years.”
One significant milestone this spring was the completion of ONEOK’s Stateline II natural gas processing plant near Williston, which can process 100 million cubic feet of natural gas per day. It’s the third natural gas processing facility the Oklahoma-based company has completed in the Williston Basin since late 2011.
Later this year, Hess Corp. will complete a major expansion of the Tioga Gas Plant, which will increase capacity from 115 million cubic feet per day to 250 million cubic feet per day. The plant produces propane, butane and natural gas.
With the addition of other plants that are expanding or under construction, North Dakota will have the capacity to process nearly 1.2 billion cubic feet of natural gas per day by the end of 2013 and more than 1.4 billion cubic feet per day by the end of 2015, according to Kringstad’s numbers.
That means North Dakota would have enough processing capacity for all the gas produced, but the ongoing challenge is having enough gathering lines to transport the natural gas, Kringstad said.
ONEOK also recently completed its Bakken NGL pipeline, capable of transporting 60,000 barrels of natural liquids per day, that extends 600 miles from processing plants in the Williston Basin to an interconnection in Colorado. From there, natural gas liquids are delivered to storage facilities in central Kansas.
In addition, ONEOK is constructing a 270-mile natural gas gathering system that is expected to be fully operational by the third quarter of this year. The pipeline network will transfer natural gas from well sites in Divide County for processing at the company’s Stateline I and Stateline II plants near Williston.
WBI Energy, a subsidiary of MDU Resources Group, announced this week a proposal to build a 400-mile natural gas pipeline from the Williston area to western Minnesota.
The project, estimated to cost $650 million to $700 million, would be capable of transporting about 400 million cubic feet of natural gas per day and could be expanded to transporting 500 million cubic feet.
If WBI gets commitments from natural gas producers and secures regulatory permits, construction of the pipeline could begin in early 2016.
More gas on the way
The importance of capturing the natural gas will only continue to grow as the oil play matures. According to a recent study by Bentek Energy, Bakken and Three Forks wells will produce significantly more natural gas as they age.
In March, North Dakota’s increase in natural gas production was about triple the increase in oil production, said Lynn Helms, director of the Department of Mineral Resources.
“As the wells mature, there’s more and more gas production coming out of those wells,” Helms said.
Kringstad’s forecast is that North Dakota will need the capacity to process 2 billion to 2.5 billion cubic feet per day of natural gas in about 10 to 15 years.
While capturing the natural gas is a challenge now, it also provides the state with new economic development opportunities, said Department of Commerce Commissioner Alan Anderson.
“We’re on the threshold of a future where energy development in all of the sectors has the potential to not only grow, but also develop new economies,” Anderson said.
Prime examples are the $1.4 billion CHS fertilizer plant planned near Spiritwood and the $1.5 billion Northern Plains Nitrogen plant in Grand Forks that would convert natural gas into fertilizer, Anderson said.
“What’s beautiful about that is it ties two of our premier industries, agriculture and energy, and it brings a value-added side to it from the energy side,” Anderson said.
North Dakota lawmakers recently approved new legislation that will provide incentives for capturing the natural gas and approved a study of using natural gas in motor vehicles.
Legislators also increased funding in the Oil & Gas Research Program from $4 million to $10 million per biennium, with emphasis placed on value-added processing projects, Anderson said.
The Department of Commerce also has a lot of interest from companies interested in opportunities related to natural gas, Anderson said.
“That’s what’s exciting,” Anderson said. “What can be viewed as a problem really is going to be an opportunity for the state.”
Dalrymple is a Forum News Service reporter stationed in the Oil Patch. She can be reached at firstname.lastname@example.org or (701) 580-6890.
- See more at: http://www.prairiebizmag.com/event/article/id/14828/#sthash.AEPVYU9E.dpuf
By GARY JACOBSON
Published: 08 June 2013 07:13 PM
WILLISTON, N.D. — From the beginning, Dallas and Texas companies have been involved in North Dakota oil.
Dallas wildcatter Mayer B. “Duke” Rudman hit one of the early successful wells soon after oil was discovered in the Williston Basin in 1951, helping make him a major independent.
“You can say it took me out of the jerk class,” Rudman told The New York Times in 1987.
Within a year of the initial discovery, H.L. Hunt’s company, Hunt Oil, and the Texas Co., whose roots trace back to Spindletop near Beaumont in 1901, opened offices in Williston, according to The Wonder of Williams, a history of Williams County, where Williston is located. The Texas Co., of course, later became Texaco.
Hunt died in 1974, Rudman in 2008.
Texas and Dallas connections continue to the present. Oil service stalwarts Halliburton and Baker Hughes, both of Houston, are active in the basin, as is Fort Worth-based Weir SPM, which makes pressure pumps used in hydraulic fracturing.
Through the end of 2012, Denbury Onshore LLC, based in Plano, was listed as the third-largest oil producer in the 60-plus-year history of the industry in the state, according to the North Dakota Department of Mineral Resources.
Denbury sold its Bakken Shale interests to Irving-based Exxon Mobil last year for about $1.6 billion and acquired other assets in North Dakota and Montana.
Other top lifetime producers in North Dakota included Petro-Hunt of Dallas, Burlington Resources of Houston, EOG Resources of Houston, Enduro Operating of Fort Worth, XTO Energy (owned by Exxon) of Fort Worth and Brigham Oil & Gas of Austin, recently purchased by Statoil, the largely Norwegian state-owned oil company.
Petro-Hunt is owned by the family of Herbert Hunt, a son of H.L
Aquiet boom has been slowly taking place in the westernmost corner of North Dakota—one that is starting to resemble the size and scale of the 1849 gold rush.
Men (and a few women) from all over the country are descending upon the area to try and strike it rich. They’ve heard of $100K jobs for 22-year-olds with no experience, a 1 percent unemployment rate (compared to the national 7.5 percent) and people making more money than they know what to do with. What was once a sleepy region with large swaths of open space and tiny single-street towns has been inundated with thousands of workers, dozens of temporary housing camps, traffic, crime, and skyrocketing living costs.
In 2008, oil companies discovered that by using the new drilling technology called hydraulic fracturing (aka fracking) they could tap into the estimated 170 billion barrels of crude oil that sat beneath the ground in the Bakken shale foundation.
The U.S. Geological Survey (USGS) calls the Bakken shale foundation, stretching across 200,000 square miles, the largest continuous oil accumulation it has ever seen. Oil was first discovered there in 1951, but it hasn’t been accessible until now.RELATED: Homeless Oil Workers Are Camping Out at Walmart
The USGS estimates the U.S. will be able to recover 7.4 billion barrels of oil from the region and 6.7 trillion cubic feet of natural gas. So far, only about 250 million barrels of oil have been recovered
. The region now accounts for 42 percent of the growth in U.S. oil production in recent years. Here are 11 shocking facts about the boom:
• Oil production in North Dakota has increase more than 600 percent
, going from 36 million barrels of oil in 2005, to 237 million in 2012. There are now 8,360 active wells in the state, producing 783,000 barrels of oil a day. The state has gone from the No. 8 oil-producing state to No. 2 in just seven years.
• A new well costs about $10 million dollars to build in the Bakken region
—about $3 million more than in other U.S. oil-producing regions like Texas. Each well is expected to generate $20 million in profits, about $4.4 million in taxes, $1.6 million in salaries and wages, and $7.6 million in royalties.
• There are an estimated 40,856 oil industry jobs in North Dakota
, plus an additional 18,000 jobs supporting the industry. The hub of the area—the 16,000 population-town of Williston—produced 14,000 new jobs alone between 2010 and 2012. The state has a 3 percent unemployment rate, and the Williston region’s is around 1 percent.
• Each well requires about 2,000 truck trips in its first year of operation
. On the highway running through the area, traffic has gone from 1,400 cars a day to 14,000, and it’s currently being expanded from two to six lanes.
• North Dakota now has a billion-dollar budget surplus
. The economic impact of oil production to the state’s economy is estimated at $34.4 billion.
• The local McDonald’s can’t find enough workers
so it’s offering $15 an hour and signing bonuses of $300. Local strippers claim they can make $2,000 to $3,000 in tips per night. Average weekly wages are up 40 percent since 2009
• The number of taxpayers reporting adjusted gross income of more than $1 million in North Dakota has nearly tripled
, going from 266 in 2005 to 634 in 2011, in a state with a population of 699,628. About 90 percent of the drilling in the area occurs on private land, and one retired rancher
makes $80,000 a month for his small share of mineral rights.
• The population is expected to climb 50 percent
over the next 20 years in North Dakota’s oil producing region.
• Over six new housing units are being built in Williston every day
, with 2,000 to 3,000 being built every year, but they still can’t keep up. Economist Nancy Hodur at North Dakota State University told Fox Business News
that 14,000 new units are needed. Rent
has gone from about $350 a month for a 2-bedroom apartment before the boom, to over $2,000 today.
• There’s only one hospital in the Williston area
and it's seen wait times quadruple—from 30 minutes in 2010 to more than 2 hours in 2011. It’s had to double the seats in the waiting room and hire security guards.
• While many say the boom will last for decades
, J. David Hughes at the Post Carbon Institute, a think tank based in California, estimates the Bakken Shale oil production will peak
Read more at http://www.thefiscaltimes.com/Articles/2013/06/06/11-Shocking-Facts-about-the-North-Dakota-Oil-Boom.aspx#4FkMWEROedQ4PdrH.99
The news that the oil patch in North Dakota is much larger than originally estimated means that residents and officials there will have to face the challenges that accompany a boom.
Last week, the U.S. Geological Survey significantly increased its assessment of oil and gas reserves
in the Williston basin of North Dakota, according to an MPR report.
At the epicenter of the oil boom, the town of Williston, N.D., has struggled with crime and housing shortages, according to news reports.
Another problem is virtually unheard-of elsewhere: a worker shortage
"People will come here to work for the oil companies, and they will make good money, but when they just come by themself, you no longer have a teenager to work at McDonald's, or a spouse that might be a nurse at the hospital," Ward Koeser, the mayor of Williston, said in a Bloomberg interview. "So the service sector is what's really suffering right now."
Koeser is keenly aware that image is important, too. Promoting a recent cleanup event, he wanted his town to "move past its dirty oil city reputation," according to the Williston Herald. He told the paper that he wanted to make Williston "the best little city in America."
Of course, the challenges in the oil patch could be seen as the gray lining in a silver cloud. North Dakota is producing more than 700,000 barrels of oil
per day, and is second to Texas in domestic oil production, according to an MPR report, with energy production fueling a nearly $2 billion budget surplus in the state.LEARN MORE ABOUT THE NORTH DAKOTA OIL BOOM: PBS: North Dakota Boomtown Struggles Trying to Keep Up with Demand
• Interior Department boosts estimates of oil-and-gas resources in North Dakota
"A federal reassessment of oil-and-gas resources in North Dakota found the state holds twice as much shale oil — and three times as much gas — than was previously estimated." (The Hill)
• Companies line up to drill after survey shows Dakota oil, gas fields far bigger than believed
"Energy companies are lining up for their shot to drill in the Dakotas and Montana after a new government report revealed that a massive geological formation stretching across the states contains twice the oil and three times the amount of natural gas than was originally believed." (FoxNews.com)
• N.D. oil is more plentiful than previously thought
"The revised totals could make the North Dakota field the greatest oil and gas find ever in the continental United States, topping the fabled East Texas field that made Texas synonymous with oil wealth. And it would put North Dakota second to Prudhoe Bay as the largest oil producer in U.S. history." (Star Tribune
North Dakota set another new monthly oil production record at 793,302 barrels per day (bpd) in April according to oil production data
released last Friday by North Dakota's Department of Mineral Resources (see chart below). For the ninth month in a row, the Peace Garden State produced more than 700,000 barrels of oil per day, and total oil production exceeded 20 million barrels for the 10th straight month. Here are some other highlights of North Dakota's record-setting oil output in April:
- The state's average daily oil production increased 29.8% in April compared to a year ago, and followed annual increases of 34.9% in March and 39.3% in February. Amazingly, it has taken less than two years for oil production in North Dakota to more than double from 385,800 bpd in June of 2011 to 793,302 bpd in April (see chart below).
- The Bakken region in western North Dakota produced more than 700,000 bpd in March for the fourth straight month, and established a new all-time monthly output record of 727,149 bpd, which represented 91.7% of the state's monthly oil production. In contrast, the Bakken region produced less than 9% of the state's oil output at the beginning of 2007, before hydraulic fracturing revolutionized domestic oil production in the shale-rich states of North Dakota and Texas.
- For the month of March (most recent month available for import data), North Dakota's oil production surpassed imports from every country except for Canada (3.7 million bpd), Saudi Arabia (1.28 million bpd).
Largely as a result of the state's booming shale oil production, North Dakota continues to lead the nation with the lowest state unemployment rate at 3.3% in April, more than four percentage points below the national average of 7.6% for that month. There were 16 North Dakota counties
with jobless rates at or below 3.0% in April, and three counties (Williams, Slope, and Billings) at the center of the Bakken oil field hadjobless rates below 1% in April
The extraordinary growth in North Dakota oil production has fueled exponential growth in the state's oil and gas jobs, which have more than tripled over the last three years to another new record high in April. Payrolls at oil and gas companies in North Dakota have increased by almost 5,000 over the last year, which means that about 20 new shovel-ready jobs are being created every business day -- and those are just the new jobs directly involved in drilling activities. Overall employment throughout the entire state increased by 3.7% through April from a year earlier, more than double the 1.7% pace of job growth nationally over that period. Since the beginning of the recession in 2007, total employment in North Dakota has increased by more than 21.9% to a record high level in April, while payrolls nationally are still 1.7% below the December 2007 level.
June 20, 2013 12:05 am • By DAVID L. TYLER
If you’ve been caught off guard by the shale energy revolution, you’re not alone. Surging U.S. natural gas production and booming oil production from shale formations have given even mighty OPEC whiplash. U.S. imports of oil have dropped dramatically – they’re at their lowest point in more than 20 years – and are headed even lower.
This surge is creating jobs and wealth that didn’t exist before, even in states where there has been no production. These states are benefiting from a rebound in manufacturing of steel pipes, concrete and other products used in oil-and-gas production.
The boom in shale production comes from a combination of technologies – horizontal drilling and hydraulic fracturing, which involves pumping water and sand, with trace amounts of chemicals, at high pressure to break apart underground rock formations. Largely due to fracking, the amount of technically recoverable oil-and-gas reserves today is 35 percent greater than in 2011. This gives our country greater defense against overseas turmoil that can disrupt energy supplies.
Consider the impact of the shale revolution on some OPEC producers, like Nigeria and Angola. U.S. imports of Nigerian and Angolan crude, totaling more than 2.5 million barrels per day just five years ago, have been cut in half. And Saudi Arabia has cut its oil production in an effort to prop up global prices. The increase in U.S. oil production is blunting the impact of rising Asian demand for oil, primarily from China, which has been the key driver of global oil prices over the past decade.
The U.S. shale revolution has the world’s attention. And yet, we’ve only begun to realize the full promise of our vast shale resources. For example, California’s untapped Monterey shale formation is believed to hold 15.4 billion barrels of oil, two-thirds of the nation’s shale oil reserves, according to the U.S. Energy Information Administration. Our oil reserves and production are growing from day to day.
The world’s energy needs are expected to grow tremendously over the next few decades, and in order to help meet them, the United States is going to have to become an oil exporter.
We already export coal, and the Obama administration has recently expressed support for expanding the export of liquefied natural gas. Now is the time to reverse the 1979 ban on crude oil exports, which could hamstring domestic production. The ban prohibits the sale of crude oil to any country other than Canada and Mexico.
The shale revolution has already created 1.7 million new jobs and has the potential to create another 3.5 million by 2030. Those job gains, and tens of billions in new wages and new tax revenues, are predicated on the expansion of U.S. energy production.
Every new well drilled pushes millions of dollars into the economy. That investment pays for millions of pounds of cement and steel, rig crews, truck drivers, and environmental monitoring. The potential exists for tens of thousands of new wells to be drilled every year for the foreseeable future. But failure to allow exports could artificially restrict that potential and lead to the loss of jobs and billions of dollars worth of economic opportunity.
The United States already allows the export of refined petroleum products, such as gasoline and diesel. It’s time we do the same for crude oil. The 1979 ban on crude exports was an understandable response to the 1973 oil embargo and the Iranian revolution. But the age of U.S. energy abundance has arrived and we should shape policies to reflect it.