Carpe Diem

America’s ‘economic miracle state’ – North Dakota – sets new records in October with exponential growth of oil output

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)

9 thoughts on “America’s ‘economic miracle state’ – North Dakota – sets new records in October with exponential growth of oil output

  1. That is all great news, but I am not sure North Dakota should be rated as a state to try use as an economic model for other states due to its small population of people. There are almost three cows for every person there.

    North Dakota’s population of 675,000 as a Metropolitan Statistical Area (MSA) would rate them 79th on the list just ahead of the Toledo, Ohio MSA (650,266 population).

    • When it comes to oil output, the state of North Dakota is comparable in oil production to many entire countries, e.g. North Dakota produces now as much oil as Argentina, and produces more oil than Egypt, Malaysia, U.K., Australia, Ecuador, Thailand, etc.

      And we can also use Texas as another much larger state that is also experiencing an energy-related economic boom.

      • Oakland County just next door to me in Michigan might be a better “state” economic model to follow than North Dakota. They have almost twice the population of North Dakota (1,210,145 population Oakland County v. 683,932 population North Dakota), and a 33% higher per capita income in 2011 ($36,314 Oakland County v. $27,305 North Dakota). Now if we could just get Oakland County’s unemployment rate to match North Dakota’s. (FYI Texas = 25,674,681 population and $25,548 per capita income in 2011). (Source: U.S. Census Quick Facts)

  2. WHAT A COLLECTION OF DUMB COMMENTS BY WALT.

    Walt would rather see unreliable, uneconomic, failed and inefficient windmills and solar panels supported by taxpayer subsidies than private industry spending its money and tapping into an abundant, clean and cheap natural resource to power American industry and generate an industrial and manufacturing renaissance right here in the USA.

    I wonder if Walt ever took a look at any “sustainable/renewable energy” mutual fund? Why are these funds down 75-90%, Walt?

    Looks like Walt would rather see America send US dollars to our good friends and pals in the Middle East.

    • MacDaddyWatch, I simply stated North Dakota is not an economic model that a state with a regular-sized population can follow for success. North Dakota has the population the size of Toledo Ohio, El Paso Texas, or Memphis Tennessee. You have to use state-sized thinking to solve state-sized problems and North Dakota is basically Toledo, Ohio with bigger yards and a lot more cows.

      How do you get what you wrote about me from what I wrote? I support fossil fuel and nuclear power, but that was not what I was commenting on at all.

  3. The rapid growth in North Dakota is definaely amazing and hopefully will continue. The Eagle Ford in South Texas has basically gone from an idea to the largest play in the world in just a few short years. All this has happened with a limited market… Just imagine the explosion of growth if the feds allow oil and natural gas access to the world market.
    http://eaglefordshale.com/blog/eagle-ford-capital-spending-largest-in-world/?utm_source=rss&utm_medium=rss&utm_campaign=eagle-ford-capital-spending-largest-in-world

  4. Speaking of dometic energy…

    Popular Mechanics article linked from Instapundit: Natural Gas–Burning Megaships Soon to Leave Port

    U.S.-based TOTE, Inc., one of America’s shipping giants, is betting on liquefied natural gas (LNG) as the fuel of the future for the marine shipping industry. The company just announced plans to build the first container ships to use LNG as a “primary” fuel source, partnering with San Diego–based ship builder General Dynamics NASSCO to complete two of these containerships in 2015 and 2016.
    ———————————

    One could look at this story as either people betting big money on what appears to be a very abundant supply of domestic natural gas…

    Or

    The EPA’s interference in the transportation business is causing prices to rise…

    Personally I’m hoping for the first one…

  5. 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.

    What you need is a reality check. When you have production levels of less than 100 bpd it means that paying for all of that drilling activity and production will not be easy given the fact that you have a 50% decline rate over the first year. You would think that an economics professor would be better at math and that he might take a bit of time to look into the economics of oil production, something that you have avoided discussing for several years.

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>