EnergyFactor By ExxonMobil | Pespectives has a new home

Production up, up, up in the Bakken

Another day, another record. Or so it seems in North Dakota.

The latest statistics from the state’s Department of Mineral Services show that average daily oil production in the Roughrider State hit another all-time high in June – 1.09 million barrels.

That North Dakota set another oil production record shouldn’t come as much of a surprise. The surprises are the months when it doesn’t.

Supersized oil production in North Dakota started taking off a decade ago thanks to the use of hydraulic fracturing in the Bakken shale. And in the 131 months since production started climbing in the summer of 2004, the state has set a new record for average daily output in 112 of them.

Eye-popping increases every year NorthDakota_Oil_Production_08-2014

A new record virtually every month might make the remarkable seem routine. So consider the size of the production increases North Dakota is posting. There’s nothing routine about them.

Daily oil production jumped 21 percent last year, following a 44 percent rise the year before. This year appears to be more of the same; production has already increased more than 17 percent in just the first six months of 2014.

In each of the last three calendar years, average daily output has grown by about 195,000 barrels from one January to the next. That’s just the average annual increase from 2011 to 2013. Now consider that until 2008, the all-time record for average daily oil production in North Dakota was only 148,000 barrels.

What’s happening in North Dakota’s portion of the Bakken shale helps explain why the U.S. is “pumping the most oil in 27 years,” as Bloomberg notes – daily production has increased by more than 3 million barrels since 2008.

North Dakota has now vaulted into the ranks of top energy producing states – only Texas pumps more oil – a distinction that would have seemed unimaginable not long ago. As a consequence, North Dakota has experienced high economic growth and some of the lowest unemployment figures in the country.

A tale of two states

Now compare North Dakota’s fortunes to Alaska’s, where oil production has fallen off a cliff. In 1988, the state’s oil fields produced 2 million barrels per day. Today it’s around 550,000 barrels per day. The drop-off has affected the local economy; Alaska was the only state whose GDP contracted in 2013.

Today Alaskans are going to the polls to vote on a statewide referendum the outcome of which could help reverse some of this decline. But the most important actions need to come from Washington, DC, where policymakers have placed resource-rich locales like the Arctic National Wildlife Refuge off-limits to responsible energy production.

North Dakota, Texas, and other locales are embracing the promise of the North American energy revolution. Alaska should be a part of it as well.


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