Carpe Diem

Chart of the day: The dollar value of North Dakota oil

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Oil production by state (and by country) is typically reported by the number of barrels produced per day (or per month or year), like the report today for North Dakota oil in February. I started wondering today why oil output is always reported in physical units (barrels) but never seems to get reported by dollar value? So to supplement today’s report on monthly North Dakota oil output through February, I present data in the chart above on the annual dollar value of the oil produced in the Peace Garden State back to 2000. To calculate annual dollar values, I first calculated monthly oil revenues using monthly output figures and the average monthly price for West Texas oil, and then summed the monthly totals to get the annual amounts in the chart above.

In 2012, the estimated dollar value of North Dakota’s annual oil output was $22.745 billion, which was an increase of 57% from the $14.47 billion of oil produced in 2011 and about two and-a-half times more than the $8.99 billion in 2010. The dollar value of oil produced in North Dakota during the first two months of this year, at $4.24 billion, is greater than the annual value of the state’s oil in 2007 ($3.29 billion) and all of the previous years. On a monthly basis, the $23.6 billion of oil produced in February was the highest dollar amount of oil ever produced in the state in a single month.

And to put North Dakota’s oil output last year of $22.745 billion into perspective, that’s greater than the annual GDP in 2012 of many countries like Cyprus ($22.4 billion), and just slightly less than El Salvador ($23.9 billion) and Cameroon ($24.5 billion).  It’s also just slightly less than the Gross State Product of Vermont in 2011 (most recent year available) at $25.9 billion.

We’ve known that North Dakota oil production has been growing exponentially when measured by physical output, and this helps put a dollar value on the oil prosperity being generated in America’s “economic miracle state.”

8 thoughts on “Chart of the day: The dollar value of North Dakota oil

  1. Why don’t you compare it to U S GDP ?

    US 2012 gdp = 15,684.8 b

    North Dakota oil output= 22.7 b

    So it is 0.1% US GDP . Don’t you think that is a more relevant comparison?

    We are not all fooled by the way you but out misleading data

    • Misleading… how? Fooled… how?

      Is your argument that North Dakota isn’t in the middle of a huge boom in oil/natural gas? One particular industry in 1/50th of the nation is producing 0.145% of the entire national economy, and this is a sign of what, exactly?

      In 2012, IBM had a net income of 16.6 b, which puts it at 0.106% of US GDP. So…. what exactly does that tell us?

      What exactly annoys you about ND’s success in oil/gas, or about Mark’s reporting thereof?

    • Well, it used to be almost nothing by comparison, so we should be comparing $1 billion in 2002 to $23 billion in 2010.

      Hey, if you compare almost anything to $16 trillion ( $16,000,000,000,000) it will look pretty small.

    • What you are forgetting is that all the infrastructure and support systems that have been built and are still being built. There’s a shortage of housing, restaurants, hospitals/care centers, hotels, entertainment and many other economic growth structures which are all needed to support the oil industry. The ~23 billion only accounts for the oil, you add in jobs/goods/services and it’s economic impact is much higher. This has added 20,000 new jobs to the ND economy in the past year alone. That’s not bad for a state that only has less than 700,000 people living there.

      • What you are forgetting is that all the infrastructure and support systems that have been built and are still being built. There’s a shortage of housing, restaurants, hospitals/care centers, hotels, entertainment and many other economic growth structures which are all needed to support the oil industry. The ~23 billion only accounts for the oil, you add in jobs/goods/services and it’s economic impact is much higher. This has added 20,000 new jobs to the ND economy in the past year alone. That’s not bad for a state that only has less than 700,000 people living there.

        And what you are forgetting is that the producers are not profitable. All of the support services that require the infrastructure depend on their customers being profitable and ultimately all roads point to the viability of shale production. The bubble will be exposed once the upcoming correction takes its toll on prices and the shale producers cannot hide their issues by access to cheap credit or by selling off assets.

  2. The states with the highest per-capita federal spending are Louisiana ($36,602), Florida ($36,461) and North Dakota ($25,911)–the Data Nerd.

    That about $17 billion in federal outlays for North Dakota. So, last year, the oil industry did actually become more important to North Dakota than the federal government—although there is no assurance the oil income stayed in North Dakota, so actually the federal outlays are probably still more important.

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