North Dakota produced 534,884 barrels of oil per day in December.

[FBaggins]

About a 50% increase in a single year. What I find interesting is that they appear to be getting more (on average) per well. I wonder whether it's an improving technique or a natural part of the new field timeline.



http://nextbigfuture.com/2012/02/north-dakota-produced-534884-barrels-of.html

[LiberalEsto]

1. Oily to bed, oily to rise

makes an oil corporation's production rise.

[hunter]

2. And the USA burned up each day's production in less than forty minutes.

[happyslug]

3. That is ALMOST as much oil as we import from Venezuela!!!

Of course, Venezuela is the FOURTH largest imported of oil into the US (All figures are from September 2011):

CANADA 2,324 .000
SAUDI ARABIA 1,465, 000
MEXICO 1,099,000
VENEZUELA 759,000
NIGERIA 529,000
COLOMBIA 510,000

Please note the above is CRUDE OIL IMPORTS only, the numbers are slightly higher if we count Gasoline, Diesel and other refined products (For example, if we add in such refined products, Russia not Nigeria is the #5 oil importer into the US).

Top Six importers of ALL oil products both Crude oil and refined products:
CANADA 2,829,000
SAUDI ARABIA 1,479,000
MEXICO 1,192,000
VENEZUELA 806,000
RUSSIA 592,000
NIGERIA 580,000

Canada ships in over four times as much crude oil (Over five time all oil products), Saudi Arabia ships in almost three times as much oil, Mexico over twice as much oil, About equal to Venezuela and just a little more then we import from Nigeria and Russia. Of these six importing country, Dakota produced less then 10% of what we imported from these six countries.

For more see the energy Information Agency:
ftp://ftp.eia.doe.gov/pub/oil_gas/petroleum/data_publications/company_level_imports/current/import.html

Just a comment of how this increase in oil production, while significant and important, is no where need what we need to get even close to "self sufficiency" in oil production.

[FBaggins]

4. When was the last time the dictator of ND called the US the greatest terrorist in world history?

When was the last time we decided to invade ND to secure oil supplies?

When an oil company extracts oil in Nigeria, do the royalties and taxes go to ND and the US, or to Nigeria? Does an American landowner make lots of money that gets spent here? Does it have a positive or negative impact on our trade deficit and GDP?

Unemployment in ND has fallen to the low 3% range and average income has risen by about 50% in five years. The boom is so substantial that their real trouble is keeping up with the growth. Not enough schools/housing/services/etc.

And it should be noted that they're just getting started. They are nowhere near their long-run potential. They'll likely pass Venezuela early next year and Mexico a year or two later... especially if the economy really is (finally) recovering. Just a handful of years ago we were importing ten million bpd of crude. That number is falling fast to around eight. It isn't zero, but it's a big improvement... and six will be even better than that.

Please note the above is CRUDE OIL IMPORTS only, the numbers are slightly higher if we count Gasoline, Diesel and other refined products

The US is a net exporter of petroleum products. We need only look at crude.

The fact here is simple (as you return to it in your last sentence). This is big news. It doesn't become "no big deal" just because one small state didn't get us to independence in 2-3 years. As we simultaneously increase domestic production and decrease overall crude demand, lots of things improve.

Is there an ecological impact? Sure! But that impact has always been there (we've just outsourced it to countries we don't care about). Having to live with the impact of our own demand is one way of balancing that demand with other priorities.

[AlecBGreen]

5. very nice way of putting things FB

"Having to live with the impact of our own demand is one way of balancing that demand with other priorities"

[malakai2]

6. It's an interesting place

Social impacts up here are huge.

The area was, as recently as 2006, very quiet and had a small, shrinking population that made their money via agriculture and tourism. Apartment rents were in the few hundred dollar range, most of the communities had a full range of age distribution and a fairly equal sex ratio, etc. Sewage treatment works were adequately sized to handle what communities produced, and crime rates were very low. This was actually one of the best remaining pieces of duck nesting habitat on the continent, which was a quality of life issue for the local hunting culture and also an economic driver for the local hotels and restaurants.

Fast forward to today, and the rent most places here is more like $2000 to $2500 per month. Just parking a trailer in Farmer Bob's pasture, no electricity or water hookup provided, will cost close to $1000 per month. Fixed-income folks are leaving in droves, the locals who are still earning a living notice that milk here costs $7 a gallon and their daughters are afraid to go into stores or to gas stations for fear of being kidnapped and raped. The sex ratio in the middle of the patch, say Williston, is now more like 8 or 9 men for each woman. Bar fights happen daily - notice I don't say nightly. There are several smaller towns and at least one of the major cities in the patch that are discharging sewage exceeding the permit limits, and that isn't including the honeywagons that pick up from unlicensed man camps and dump into the local creeks and the Missouri River.

As far as incomes go, if you are young and can work long hours in the cold and handle living in a man camp, yes, you can make it into the low six figures. You'll hate your life, but you'll make money. If you are a stripper, and can beat the competition to work at one of the local strip clubs (they are fielding thousands of applicants from North America, Europe, and Asia), you can make several thousand dollars a night - guys here throw around twenties like guys in most cities throw around singles, and the sex ratio as noted is close to 9:1. I have heard the prostitutes can make substantially more than even the strippers. If you still have mineral rights on your property, and you weren't one of the first people to sign a lease agreement at low royalty rates, you will also get some large royalty checks. Hell, the Williston fast food places are having to pay people $20 per hour just to keep the doors open. All these greatly skew the average local income upward. Those folks who can't work in the oilfield, can't or won't take off their clothes for money, and who don't own mineral rights aren't getting rich. Yeah, $20 per hour at a fast food place sounds like a lot of money, right up until you have to compete for apartment rent with some guy making $120K working for Halliburton. Then you have to buy food at prices you might think would be more at home in the center of some big city, and pretty soon if you aren't an oilfield worker or a stripper or already rich enough to own a couple thousand acres of land with mineral rights you have to leave town.

North Dakota does get a cut of the production, though there are some games companies can play with their daily production on each well to greatly limit what they pay on production. Because the majority of the population of North Dakota lives on the other end of the state, in the Red River valley, guess where that money goes. Right now a big chunk of it is being set aside to pay for a diversion of the Red River around the west side of Fargo at twice the cost of going around the east side, not because the west side will diminish flooding (the original purpose of the diversion), but rather because then Fargo will be able to build right back up to the banks of the river and make more money on property taxes while outsourcing the cost of flood control to the US Treasury. Police in the oil patch can't keep up, they don't have prostitution and drug and human trafficking (oh yes, almost forgot...that's going on here too) divisions and the money is not flowing to these counties for more enforcement. Ditto for infrastructure - ever driven on a road that you remember was recently paved but now looks like a bombed out airstrip with holes spanning the entire with of a lane to a depth of a foot or more? Ever tried it on a two lane county road that sees 20,000 or 30,000 vehicles per day, most of them oil and fracking fluid tankers?

You asked upthread why the production rates for individual wells were increasing, and that would be because companies are getting a better feel for how the formations work. There are several formations in the area, and as they get a better feel for each they can increase their horizontal drilling distances further, up to the physical limits of the equipment, thus making for more oil from each well. As for the overall increase, that is more a combination of the state not enforcing its own environmental regulations while taking active steps to stymie Federal regulators, and companies rushing like hell to perfect their older, cheaper leases with at least one well before those leases expire (otherwise they'd have to re-lease at the much higher market rates of today). A lot of the force behind the regulatory laissiez faire approach has been former governor, current senator John Hoeven and current governor Jack Dalrymple, coupled with people who don't live here believing it's a good thing because they heard Jim Cramer say so. Even the people living on the other end of the state who don't have to deal with this stuff on a daily basis have no idea, and don't really care.

There are big ecological impacts, and short of living nearby or actually working on environmental impacts in the patch you really have no idea what those are like. Among the more interesting are the rapid decline in local game and nongame species across the western third of the state, the number of migratory birds that are killed by the oilfield reserve pits and spills, the number of brine spills that go out into Farmer Bob's field and destroy that land's ability to grow anything, the potential listing of sage grouse and a couple other local species as threatened or endangered in the near future, and the idea that each well leaves a closed reserve pit full of toxic waste buried onsite that is specifically exempt from RCRA and TSCA as petroleum extraction and production waste. Nothing like having another 50,000 miniature waste dumps scattered across the countryside over the next 20 years. You could also consider the road dust generated by the insane amount of truck traffic as an environmental issue - you should see the teeth on cattle that are raised in area pastures, ground to nubs in relatively short order as the dust settles on the pastures from which livestock and wildlife graze. I suppose one last environmental issue that interests me up here, all this oilfield equipment runs on electricity that will soon far exceed the production from the existing coal baseload plants in the area. That electricity is going to have to come from somewhere (so will a LOT of new roads, pipelines, and a couple refineries), or else this boom will stagnate. Wind power companies are not filling the void and oil companies want a more reliable power source, so it'll be interesting to see if North Dakota adds new coal furnaces at existing plants, builds entirely new coal plants, or stops sending that coal electricity to Minnesota...which means Minnesota will have to find somewhere else to buy baseload power so it can meet its goofy RPS.

There's more, a lot more, but I'll stop to be polite. You should try living here, it's interesting.

[Odin2005]

7. I have a friend who is a teacher up in Parshall.

She says it's almost impossible to find an affordable place to live, she is living with her parents there (it's her home town).

[malakai2]

8. That's pretty close to the bullseye

I know a few people like that all around the oil patch. I imagine it's great for high school kids who can live at home and make a ton of money working at businesses in town while mom and dad take care of the bills. At least if they can be off work before dark, not a lot of parents in Williston like to let their kids work late. The folks who have professional jobs though, that's an awful place to live. Teachers, nurses, police, government agency people, you name it, most of them are lucky to make half of what your typical oilfield worker makes in a year, and then they have to compete with not just those oifield workers for living space but with companies like Halliburton, Nabors, Whiting, and so forth just buying apartment buildings and evicting the tenants so they have a place to house employees during their rotations.

And about those employees the companies bring in...has your friend ever played license plate bingo up there driving around on the highways? I've seen as many as 28 states in a day, but I've stopped driving up there so maybe it's more diverse now than it was last summer. Has she said anything about school enrollment going nuts, or school violence getting to be noticeably bad? I had heard some of the schools in the area installed metal detectors at the door but didn't know whether or not that actually was the case.

[pscot]

9. The downside of that rapid extraction

is that the wells play out a lot quicker. Twenty years and that oil will all be gone. Maybe sooner. The drillers will leave behind ghost towns and waste pits. This is smash and grab and the future be damned.

[malakai2]

10. But look at the bright side

Mom and pop can buy those stripper wells from the big oil companies and then continue selling the one or two barrels of oil per day that they pump. Never mind that mom and pop have no idea how to manage the hundred barrels of co-produced brine that comes up with each barrel of oil at a stripper well, and that they lack the capital to maintain their equipment to prevent spills, and that they have no expertise in spill response or well closure or maintaining their flow lines or...

Yep, 50,000 mom and pop rigs out there in North Dakota, more in the neighboring states, just pumping away...

You are spot on about the smash and grab. Governor Dalrymple has more or less stated that is his goal. He and his donors get rich, some of his department heads also get rich, they die after living a life of luxury, and the younger generations get to read about how nice the place used to be.