State Officials Say North Dakota Now Second-Largest Oil Producer

According to the state Industrial Commission, North Dakota recently passed Alaska to become the second largest oil producer in the country. In March, North Dakota's oil wells produced 17.8 million barrels or 575,490 barrels per day - providing roughly 9% of overall US production. The advancements in horizontal drilling and hydraulic fracturing have catapulted the state from a minor producer to a major player in the oil boom across the country, with production more than doubling since 2009.

The pace of development has even taken the industry by surprise. The President of the North Dakota Petroleum Council told the Bismark Tribune, "In 1999, we had zero rigs working and people left this industry for dead in North Dakota. Technology, geology, price and the business climate changed that." Currently, the state still boasts the lowest unemployment rate in the country at 3% and once small, sleepy communities have become boom towns where high-paid oil field workers often slept in campers in store parking lots because of a lack of available housing.

Another byproduct of the Bakken Shale oil boom is a major increase in natural gas. Along with record-breaking oil production, natural gas production reached 620 million cubic feet in March based on state estimates. At least one-third of that production is "flared" or burned off due to a lack of pipeline capacity and collection facilities. According to the Energy Information Administration (EIA), oil fields nationwide typically only flare about 1% of their natural gas. North Dakota's substantial flaring has caused significant opposition from environmental groups because of increased harmful air and carbon dioxide emissions that are produced. The lack of pipeline capacity has also depressed the price of crude oil in the Bakken region and transportation by railcar is often the only economical way to get product to the market. The American Association of Railways estimates that 1.3 million barrels per day of oil is shipped by railroads in Canada and the US, which is the equivalent of the total oil production of Algeria. Economic data from the oil pipeline industry indicates that it costs roughly $2/barrel to move oil by pipeline compared to $12/barrel via railroad shipments. Officials from North Dakota estiamte that $3 billion in pipeline infrastructure will be made to ease capacity and flaring issues.