Carpe Diem

Amazing North Dakota energy facts

The Dickinson (ND) Press has put together a great list of some amazing energy-related facts about the “economic miracle state” of North Dakota, here are a few:

1. Bank deposits have soared in the oil producing counties as people park their windfall in local institutions.

2. North Dakota passed Alaska in 2012 to become the No. 2 oil-producing state in the United States behind Texas, generating massive state budget surpluses from taxes on oil production and creating thousands of millionaire landowners.

3. Royalties are paid to those who own the “mineral rights” to the land, usually farmers or their family. In North Dakota, mineral rights often are heavily divided among heirs or sold to others. In simple terms, a well producing 100 barrels of oil per day sold at $80 a barrel would generate $248,000 in a 31-day month. After state taxes on extraction and production totaling about 11.5 percent, a one-fifth royalty would generate $43,896 for the rights holders that month (and more than half a million dollars per year!).

4. North Dakota vaulted to No. 7 overall among U.S. states in per capita personal income at $47,236 in 2011, up from No. 38 in 2006, when the oil boom started.

5. The latest state estimates project a $1.6 billion general fund surplus in the two-year budget that runs through June 2013, boosted by much stronger than expected oil and gas production and extraction taxes, sales taxes and personal income taxes.

MP: The energy boom in North Dakota, mostly from shale oil, continues to deliver a powerful economic stimulus to the state, making it the most economically successful state in the country in recent years by almost any measure.  Along with the drilling activity for shale oil has come thousands of shovel-ready jobs, millions of dollars in royalty payments to local landowners and farmers, rising incomes and wealth, and a huge budget surplus.

Update: Suggested state motto for North Dakota: “Carpe Oleum” (“seize the oil”).

5 thoughts on “Amazing North Dakota energy facts

  1. I expect the Bakken to peak within the next six months, and at a level Below 750,000 bbl/day.

    The Declines are too steep, and the rigs are moving out (down to 187 from 214 in just the last couple of months.)

  2. MP: The energy boom in North Dakota, mostly from shale oil, continues to deliver a powerful economic stimulus to the state, making it the most economically successful state in the country in recent years by almost any measure. Along with the drilling activity for shale oil has come thousands of shovel-ready jobs, millions of dollars in royalty payments to local landowners and farmers, rising incomes and wealth, and a huge budget surplus.

    Shouldn’t an economist understand that a process that destroys capital and is not self sustaining cannot produce a positive result in the aggregate? Why is it that you are so eager to read every positive report on ND shale production but refuse to look at critical reports that show that the depletion rate is too high to produce an economic result and that few of the producers are self financing? Do you really care about the truth as it is or do you just want to spin a positive view that ignores reality?

    The way I see it if you miss on this obvious bubble as you did on housing you may lose whatever credibility you have worked so hard to develop. While supporting a particular view may make you a few bucks selling your integrity for those few bucks may do long term harm to your reputation.

  3. Good afternoon Mark. David Smith here. I am chairman and CEO of Sinclair Broadcast Group (SBGI), a public company that is the largest owner of televison stations in the US. We are also one of the largest producers of news by virtue of our stations. I read your articles on a regular basis and forward them to our news ops for reference etal in our news shows as they see fit. If it is of interest, we should chat about your possible availability to provide content to our operations on any number particular subjects that would be of interest to our millions of viewers. Look forward to your thoughts. Thanks

Leave a Reply

Your email address will not be published. Required fields are marked *

You may use these HTML tags and attributes: <a href="" title=""> <abbr title=""> <acronym title=""> <b> <blockquote cite=""> <cite> <code> <del datetime=""> <em> <i> <q cite=""> <strike> <strong>