New monthly oil production data released today by North Dakota’s Department of Mineral Resources show that the Peace Garden State set more new monthly records for oil production in October. For the third month in a row, the state produced more than 700,000 barrels of oil per day (bpd), and the 747,238 barrels of daily North Dakota oil in October set another new all-time record (see chart above). Total North Dakota oil production in October exceeded 20 million barrels for the fourth straight month, and the monthly output of more than 23 million barrels in October established a new monthly production record. Here are some other highlights of North Dakota’s record-setting oil output in October:
1) The state’s oil production in October was 52.5% above a year ago, and followed annual increases of 57% in both September and August. It has taken only 17 months for daily oil production in North Dakota to double from 364,000 bpd in May of 2011 to more than 747,000 in October 2012.
2) The Bakken region in western North Dakota set another new production record in October of 682,393 bpd, which also represented the Bakken’s highest share ever of the state’s monthly oil production at 91%. 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 North Dakota and Texas.
3) The number of active oil wells in North Dakota increased to 7,791 in October establishing a new state record. Over the last year through October, five 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 to a new record-high of 2,973 barrels per well, which was almost 17% 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 in North Dakota’s oil industry.
As a result of the state’s oil boom, North Dakota continues to lead the nation with the lowest state unemployment rate at 3.1% in October, and almost five percentage points below the national average of 7.9% for that month. There were ten North Dakota counties with jobless rates below 2.0% in October, 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 0.7%. The exponential 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. Overall employment throughout the entire state has increased 5.3% over the last twelve months, or almost four times the tepid 1.4% pace of job growth nationally during that period.
Bottom Line: October was another record-setting month for oil production in North Dakota, and the energy-related boom there continues to make it and Texas the two most economically successful states in America, with record levels of employment and income growth in the Peace Garden State, 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 ten 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 October. 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.
Carpe oleum (seize the oil)