6 facts about North Dakota oil
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1. Oil production in North Dakota has increased more than 600% in the past several years, from 35.7 million barrels of oil in 2005 to 237 million barrels in 2012. In 2005, North Dakota was the No. 8 oil-producing state in the nation, and in just seven years has moved up to become the No. 2 state for oil output in 2012, behind only No. 1 Texas.
2. North Dakota provides about 11% of the U.S. oil production and the Bakken accounts for 40% of the nation’s increase in domestic oil production in recent years.
3. North Dakota has been an oil-producing state for about 60 years, and there have been some past boom cycles but the present one is entirely different from the previous ones. For example, in those past years the success rate was around 30%. With horizontal drilling and hydraulic fracturing, there is a 99% success rate.
4. As of February, the state had 8,500 wells and was producing about 779,000 barrels of oil per day. With the current technology, each well is expected to produce for about 30 years, and each one will produce about 550,000 barrels of oil.
5. To drill a new oil well in the Bakken costs about $10 million, and each well will generate about $20 million in net profit. Each well pays about $4.4 million in taxes, $7.6 million in royalties, $1.6 million in salaries and wages.
6. An economic impact study in 2005 estimated that the oil boom had a $4.4 billion impact on North Dakota’s economy, but that has increased now by almost 600% to $34.4 billion. There are about 40,856 petroleum industry jobs in North Dakota; along with the roughnecks, truckers and other employees working directly with the drilling operations in the oil patch, there are an estimated 18,000 indirect jobs supporting the petroleum industry that include workers in legal services, administrative, communication professionals, and human resources.
MP: To help put the economic impact of oil on the North Dakota (and US) economy into perspective, it’s as if there are now 8,500 “small businesses” (wells) operating in the western part of the state, and each of those “small businesses” are paying millions of dollars in royalty payments to local landowners and farmers, they are employing hundreds of workers and paying good salaries and benefits, they are generating millions of dollars of profits for the owners of the oil companies, and they are paying millions of dollars in taxes to local and state governments. With 8,500 profitable “small businesses” (wells) operating in the state, double the number three years ago, and increasing at the rate of about five new “small businesses” every day over the last year, it should be pretty easy to understand why North Dakota is frequently referred to as “America’s economic miracle state.”
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