Carpe Diem

Each new North Dakota oil well is equivalent to a new $8-10 million business, and they’ve got thousands

ndoilwells

The chart above shows the number of producing oil wells in North Dakota, which have more than doubled in the last six years, from 3,345 in April of 2006 to 6,734 in April of this year.  Over just the last year, 1,425 new wells have been added from April 2011 to April 2012, at a rate of six new wells every business day.

As Bruce Oskol pointed out on his Million Dollar Way blog:

“Each of those North Dakota oil wells can be thought of as equivalent to a new $8-10 million business sprouting up in your neighborhood, and all with private money on private land, with no federal money or taxpayer subsidies.  Hundreds of new $8-10 million businesses sprouting up each month.  I read somewhere that it takes about 75 other oil service companies to keep an oil well running, including the tax accountants, the landmen, and, of course, it provides a lot of work for federal and state regulators and bureaucrats.  And the initial cost of each well should be paid back with five or six years of production, and unless the world quits using oil, the wells will keep pumping oil for 30 years.”

MP: The economic impact of the increased oil production in North Dakota over the last year is the equivalent to more than 1,000 new $8-10 million small businesses being created in the state, which have created 7,000 new direct jobs in the oil business over the last year, and more than 26,000 new jobs in total throughout the state.

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