The Busy Bakken
Today we’re busier in the Bakken than most people think.
In May, the North Dakota oil and gas industry set a new production record, hitting 1.244 million barrels of oil per day (bopd). In eighteen months, production has grown by more than 300,000 bopd, from 942,156 bopd in December 2016. It’s hard to believe that only ten years ago, in May 2008, the state’s production totalled only 156,420 bopd. Experts today anticipate we could exceed 2 million barrels of oil per day (bopd).
To grow any industry by eight fold in ten years is truly remarkable and the North Dakota economy has been transformed. The industry employs 20 percent of North Dakota’s workforce! And at incredible wages, paying more than 30 percent of total wages. North Dakota mineral owners reap more than $1 billion per year in royalty. And the taxes paid by the industry are astonishing, benefiting each and every North Dakotan. The average new well pays more than $1 million of taxes in its first year and we completed nearly 900 new wells in the last 12 months! Because of it, our state’s roads are in their best-ever condition, we have new law and medical schools, water diversion and aversion projects across the state, and a budget, though difficult, much stronger than it would have been without oil production.
It hasn’t been without challenge. Western North Dakota worked hard to build our communities during the boom and to survive the downturn. For many, balance sheets will take longer to repair than income statements. A lot of iron remains under-utilized in shop yards. Several investments in oil and gas, real estate and other projects have and continue to face challenges.
While such situations cause hardship, the Bakken is fundamentally sound. The downturn forced rapid technology advancement in the industry. Often called simply “efficiency”, it is far more in scope. New downhole sensors create 2-mile-long 3D images of tiny cracks in the rock more than 10,000 feet below the ground that engineers can use to create frac strategies for not only each well, but each 150-300 foot segment of it. The industry developed special plugs that withstand 15,000 pounds of pressure during the completion process, but naturally dissolve in a matter of weeks, reducing time and equipment on site. Electronic systems allow wells, pipelines and other systems to be managed from anywhere in the world. All together, better operations, knowledge, and technology have doubled production per well in only a few years and decreased the cost of each well.
Our people changed too. Williams and McKenzie Counties are among the youngest in the nation. The young guys who came out during the boom are five years older now, meaning that growing families are replacing crews in apartments. Our community events are packed with strollers, and even newly-built schools are full. The Bakken became a place for young adults to create families, friends and career opportunities (very often with six-figure paychecks). Now our next challenge in western North Dakota is growing community amenities to make this a place they love even more.
Record production, record employment, and record births. There’s no question that the Bakken is back.