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North Dakota oil output hits 1 million barrels per day

North Dakota oil production levels hit a new high in April, according to the most recent state data. North Dakota oil now makes up more than 12 percent of all US oil production 鈥 an unfathomable scenario just a decade ago.

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Shannon Stapleton/Reuters/File
Natural gas flares are seen at an oil pump site outside of Williston, N.D. The North Dakota oil boom has brought new jobs to the region, but police departments, health care services, and other public services have struggled to keep up with the growth.

North聽Dakota聽has joined the ranks of the few places in the world that produce more than a million barrels of聽oil聽per day, due in large part to the rich Bakken shale formation in the western part of the state.

The April figures released Tuesday by the state's Department of Mineral Resources showed the record tally.聽North聽Dakota聽had flirted with the million-barrel-per-day mark for months, but the harsh winter slowed the pace. In March, production had hit 977,000 barrels per day.

North聽Dakota's聽oil聽fields now represent more than 12 percent of all U.S.聽oil聽production, and more than 1 percent of global production 鈥 a situation unfathomable just a decade ago, when technology hadn't yet caught up to the challenge of extracting聽oil聽from the shale. Since then, the聽oil聽boom and the jobs it brings have transformed聽North聽Dakota, now home to the nation's fastest-growing cities and its lowest unemployment rate.

"Reaching the 1 million barrel a day mark is a tremendous and timely milestone for the petroleum industry and our state, but it is also a tremendous milestone for our nation," U.S. Sen. John Hoeven, a Republican, said in a statement, citing the need for the United States to build its domestic energy resources.

North聽Dakota聽joins Texas, Alaska, California and Louisiana as the only states ever to produce more than a million barrels per day. Of those, Texas is the only other state still producing above that level.

"Until April, only Texas, one Canadian province and 19 countries were producing 1 million barrels per day, putting聽North聽Dakotaamong the top聽oil聽producers in the entire world," said Ron Ness, president of the聽North聽Dakota聽Petroleum Council, an聽oil聽lobbying group.

The state's production is still dwarfed by behemoths such as Saudi Arabia, the world's largest producer with nearly 10 million barrels of聽oil聽per day.

But聽North聽Dakota's聽ascent has been rapid. Whereas eastern Saudi Arabia's Ghawar field, the top-producing聽oil聽field in the world with 5 million barrels a day, has been operational since 1951,聽North聽Dakota's聽oil聽fields have surged from producing 80,000 to 90,000 barrels per day a decade ago.

The Bakken and the Three Forks formation below it, which also stretch into Montana and Canada's Saskatchewan province, account for the vast majority of聽North聽Dakota's聽oil聽production.

Oil聽was first struck in western聽North聽Dakota聽in 1951 near the town of Tioga, but for decades, the area confounded聽oil聽producers, giving up trickles while promising potentially enormous gains. After a smaller聽oil聽boom went bust in the 1980s, many gave up on the state as a big聽oil聽producer. At one point in 1999, no drilling rigs remained in聽North聽Dakota.

But just over half a decade ago, advances in directional drilling and hydraulic fracturing finally unlocked the聽oil聽packed into the Bakken shale formation.

Now "North聽Dakota聽could be an OPEC country of its own in terms of production 鈥 it's essentially the production of Ecuador," said James Fallon, director of downstream energy at global information firm IHS.

Together with Texas' Permian Basin and Eagle Ford聽oil聽plays,聽North聽Dakota's聽production has played a pivotal role in turning U.S. production around in the past few years after more than 30 years of decline and cutting down on petroleum imports he added. Fallon said it is likely that because of these聽oil聽plays, the U.S. will surpass its 1970 production high of 9.64 million barrels per day within the next year and a half.

Lynn Helms, director of the Department of Mineral Resources'聽Oil聽and Gas Division, said he expects聽North聽Dakota聽production to grow to 1.5 million barrels per day by 2017 before plateauing.

Besides the influx of jobs, high salaries have skewed the economy of the聽oil聽patch, with one-bedroom apartments renting for $2,000 a month. Police departments, health care services, schools, roads and other public services and infrastructure have struggled to keep up with the growth in the western part of the state.

Despite the trials that聽oil聽development has brought, the boom has largely been welcomed at a time when jobs can be hard to come by elsewhere in the U.S.

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