Last year I pointed out how North Dakota’s Bakken region had registered record oil production of 600,000 barrels per day – a 100-fold increase over just six years earlier.
Now, just 10 months later, the record set last July seems a quaint and distant memory.
This week the North Dakota Department of Mineral Resources (DMR) announced that the state’s daily average oil production in May surpassed 800,000 barrels. That new record represents a 33 percent jump over the all-time high I flagged last year.
Some news reports suggest all this activity will slow down soon. Perhaps. But it’s worth noting that there are currently 186 rigs working in western North Dakota, and the DMR reports a backlog of nearly 500 wells waiting to be hydraulically fractured.
More than that, the most recent U.S. Geological Survey oil and gas resource assessment for the Bakken and Three Forks formations in North Dakota, South Dakota and Montana estimates there are 7.4 billion barrels of undiscovered, technically recoverable oil in the region, double what was previously thought.
The numbers are impressive, but what they really signify is economic growth and opportunity.
A report from the Federal Reserve Bank of Minneapolis shows just how big the impact and reach of Bakken production is turning out to be.
The study shows a dramatic and positive effect on employment and wages not just in the immediate counties of the Bakken – some of which boast unemployment rates below 1 percent– but rippling out hundreds of miles from the shale formation.
“The economic momentum is evident in Moorhead, Minn., which is almost 400 miles from the heart of the oil patch,” noted the St. Paul Pioneer Press. “In the broader Fargo, N.D.-Moorhead area, ‘the biggest growth has been in engineering and technology companies,’ providing services to firms in the oil patch, said James Gartin, president of the Greater Fargo-Moorhead Economic Development Corp. Local companies that supply electrical products, piping and other supplies to firms out west have done well. ‘It’s a blessed position to be in,’ Gartin said.”
Surely there are lessons that other states and regions contemplating increased energy development from shale could take from the Bakken.