Carpe Diem

‘Carpe oleum’ (seize the oil): North Dakota’s exponential oil production sets additional records in August

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The “Economic Miracle State” of North Dakota pumped another record amount of crude oil during the month of August, surpassing 700,000 barrels per day for the first time ever, according to data released today by the state’s Department of Mineral Resources.  Total oil production in August exceeded 21 million barrels for the first time in state history, establishing another new record for monthly oil output.  Here are some other highlights of North Dakota’s record-setting oil output in August:

1) The state’s oil production in August was 57% above a year ago, and followed annual increases of 59% in July and 72% in June.

2) North Dakota produced 73% more oil than Alaska in August, marking the sixth consecutive month that North Dakota has 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, second now only to first-ranked Texas.

3) The number of active oil wells in North Dakota increased to 7,408 in August establishing a new state record.  Over the last year through August, an average of almost seven new oil wells were put into production every business day, and each of those new wells 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 active well in North Dakota increased in August to a new record-high of 2,906 barrels during the month of August, which was 20% above the oil output per well  a year ago, and likely reflects the increased efficiency gains from advanced drilling technologies like “pad drilling” that are gaining popularity.

As a result of the state’s oil boom, North Dakota continues to lead the nation with the lowest state unemployment rate at 3% in August, and almost five percentage points below the national average of 7.8%.  There were nine North Dakota counties with jobless rates below 2.0% in July, 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 0.8%.  The exponential growth in North Dakota oil production has fueled exponential growth in the state’s oil and gas jobs, which have tripled in less than three years.  Overall employment throughout the entire state has increased 6.4% over the last twelve months, more than six times the tepid 1.0% pace of job growth nationally during that period.

Bottom Line: August was another record-setting month for oil production in North Dakota and the energy-related boom there continues to make it the most economically successful state in America, with record levels of employment and income growth, the lowest state jobless rate in the country, a state budget surplus of $1.6 billion, the lowest home foreclosure rate in the country, strong housing and construction markets, thousands of landowners who have become millionaires from oil royalties, and jobless rates in nine of the state’s counties below 2.0%.  North Dakota’s economic success, job creation, and energy-based prosperity is being driven by the development of the state’s vast energy resources, especially the ocean of shale oil in the state’s Bakken region, which supplied 91% of the state’s oil in August.  It’s an economic model that could easily spread energy prosperity elsewhere if more domestic energy resources were opened up to greater exploration and drilling for oil and natural gas.

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

Update: At more than 700,000 barrels per day (bpd), North Dakota is now producing almost as much oil as the countries of Egypt (719,000 bpd) and Argentina (723,000 bpd).  At the current rate of production increases, it’s possible that North Dakota will be producing more than one million bpd of oil by the middle of next year and the state will then surpass oil output in the following countries: Indonesia (923,000 bpd), Oman (927,000 bpd), India (945,000 bpd), Colombia (960,000 bpd), and the U.K. (982,000 bpd).

19 thoughts on “‘Carpe oleum’ (seize the oil): North Dakota’s exponential oil production sets additional records in August

  1. Remember last month when certain people were gloating that the wells added in July only added an incremental 62 bbl/day per new well?

    That number in August is up to 149 bbl/day per new well. Last August the number was 104 bbl/day per new well.

    • May, June, July, Aug of last year each well added 218 bbl/day to field production.

      The same months, this year, each well added 114 bbl/day. That’s a Decline of about 48% YOY.

      BTW, I wasn’t “gloating;” I was stating the facts.

      And, Qutar produces 1,200,000 bbl/day of Crude + Condensate. The Bakken will Never produce 1.2 Million bbl/day. Not this year. Not next year. Not in the next millenium

          • Wow, all of two weeks old. But thats the point-production is increasing exponentially, so why should Schork’s prediction be wrong? The way he was talking, these guys haven’t even gotten started yet. The big problem is to get the stuff out of there to the refineries efficiently, but that’s being worked on too.

          • Why don’t you come clean on your support of ethanol, solar and wind? Full disclosure would be nice.

          • I don’t know if you noticed my post on the previous Bakken post, but I did make a few comments about your posts; I’ll summarize…

            - Shale oil wells do deplete fast (not as bad as shale gas wells). If Elm Coulee, Montana’s own shale oil play, is an indicator, we’ll likely see a faster drop in production after peak than we’d see in regular oil fields.

            - Calls for a Bakken peak in the near future may be premature. Elm Coulee, much smaller than the Bakken, ran a good decade before petering out. Calls for 1 mbpd in production may not be unreasonable.

            - The Bakken is not a new play. Drilling has commenced since the 1950s; hydraulic fraccing has taken place only within recent years. There are many, many older and less productive wells that thin out averages when weighed against newer, and more productive wells.

            - Bakken skeptics have been wrong before. In 2008, the Oil Drum ran the following piece predicting a short-lived peak of 225,000 bpd. I’ve read other Oil Drum articles in the past, and while the authors have valid points, they’ve also come up badly wrong at times.

            - http://www.theoildrum.com/node/3868

      • Kum,

        I’ve read a few of your posts on some of Mark’s posting and decided I’d like to help you.

        I don’t know how long you’ve been following the “peak oil” debate, but I used to follow it vehemently for years last decade and took a strong antagonist position against the “peakers”; in fact, I used to be such a smartass, I even managed to get myself banned from the Oil Drum’s comment section.

        But this aside, the truth is I’ve long held a more moderate position on the subject of peak oil: that is, global peak production would ultimately result in a prolonged plateau, or a slow decline, and it would be relatively easy to deal with.

        Sounds crazy? All you have to do is look at continental crude production: peaks tend to result in prolonged plateaus that can last decades. Spying continental production spastics years ago is where I cooked up this idea, but TBT, other respectable individuals too hold this view.

        And considering the proof in the pudding: non-OPEC crude production has been mostly flat since ’04, global production since ’05. Don’t look like I’ve done half bad, eh?

        Anyway, I gave up on the debate long ago ’cause it was all the same – and it still looks the same now. I remembered those scary forecasts of collapsing Ghawar and Saudi oil production (heard of Twilight in the Desert?), depleting Russian oil production, and numerous failed Oil Drum forecasts of diving global production.

  2. On ND oil production: There must be very few industries that could be charted as going parabolic beginning in 2008 and continuing through the present. Carpe oleum in the U.S. or the economy my sieze up.

    • Oil would’ve likely reached $200 a barrel with appropriate economic policies in early 2009 to jolt the economy into a virtuous cycle of consumption-employment.

      I stated in Feb ’09 [the tax cut should've been $5,000 per worker for the 150 million workers at the time or $750 billion]:

      1. Obama should change his stimulus plan to a $2,000 tax cut per worker, along with increasing unemployment benefits by a similar amount. This will help households strengthen their balance sheets [i.e. catch-up on bills, pay-down debt, increase saving, spur consumption of assets and goods, etc.]. This plan will have an immediate and powerful effect to stimulate the economy and strengthen the banking system. When excess assets and goods clear the market, production will increase.

      2. Shift “toxic” assets into a “bad bank.” The government should pay premiums for toxic assets to recapitalize the banking industry and eliminate the systemic problem caused by global imbalances. The Fed has the power to create money out of thin air, to generate nominal growth, boost “animal spirits,” and inflate toxic assets.

      3. Government expenditures should play a small role in the economic recovery. For example, instead of loans for the auto industry, the government should buy autos and give them away to government employees (e.g. a fringe benefit). So, automakers can continue to produce, instead of shutting down their plants for a month. Auto producers should take advantage of lower costs for raw materials and energy, and generate a multiplier effect in related industries.

    • No serious person ever paid any attention to Peak Oil. Global resource shortages have been wrongly predicted for hundreds of years, going all the way back to Thomas Malthus.

      The more recent population explosions and resulting food shortages that was supposed to lead to massive global starvation proved to be equally unfounded. The father of this last alarmist hoax can be still seen wandering around the Stanford campus–as clueless as ever.

      Some folks simply make a living piling horseshlt.

    • Bart, you and StaticStats need to correct for the over-inflation before it was adjusted (too little and too late) to less over-inflation.

  3. The rig-count/production level charts crossed in Q2, 1998. That’s 14-years ago.

    If any poster is focusing on the rig count and extrapolating in order to explain his alarmist case about future production levels…then he’s 14-years late and and has been unambiguously WRONG for 14-years.

  4. North Dakota now produces more barrels of oil per day (700,000) than its population (690,000).

    It seems, only two countries surpass North Dakota’s per capita oil production.

    Qatar produces roughly 1.2 barrels per day per capita and Kuwait produces roughly one barrel per day per capita.

    No other country produces more than 0.7 barrel per day per capita; five countries produce more than 0.5 barrel per day per capita; and 10 countries produce more than 0.2 barrel per day per capita.

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