Why North Dakota's Oil Future Just Got Brighter
This article was written by Oilprice.com, the leading provider of energy news in the world.
U.S. Senators John Hoeven and Heidi Heitkamp, bipartisan leaders from North Dakota, said the oil boom in their state just got louder with the passage of the Bureau of Land Management Streamlining Act.
"There are currently about 525 permits awaiting approval," Hoeven said in a statement. "This [act] will help us to alleviate the backlog and other delays that are costing us jobs and economic growth."
North Dakota is one of the premier oil-producing states in the country. The Bakken and Three Forks formations, which are positioned dominantly in the state, hold a combined 7.3 billion barrels of oil, according to the latest assessment from the U.S. Geological Survey.
The measure will make it easier to process permits in North Dakota by expanding a BLM field office in neighboring Montana to service the state.
Heitkamp said the measure uncorks the bottleneck that's existed in the state because the federal government lacked the means to coordinate its activity in western North Dakota.
"It has led to excessive waits for drilling permits that unnecessarily slow down projects," she said.
That's good news for energy companies looking to capitalize on the oil-fueled economic growth cycle under way in North Dakota, a state that's set routine records in terms of oil production.
Continental Resources , one of the largest producers in the region, said its third quarter profit was 62 percent higher year-on-year. In terms of the Bakken formation, which the company relies on for 67 percent of its total production, Continental said production increased 7 percent from the second quarter to 94,500 barrels of oil equivalent per day.
For the state itself, the U.S. Energy Information Administration said state gross domestic product per capita in 2001 was one of the lowest in the country. By 2012, with oil production gaining steam, GDP per capita was 29 percent higher than the national average.
"Even though the state appeared to be closing the gap on the U.S. average before Bakken production began, the rising oil and gas production likely contributed to the economic growth the state has enjoyed," EIA said.
State Gov. Jack Dalrymple recently awarded $10 million to help support school development in western counties struggling to keep up with the boom cycle. The challenges from rapid growth, he said, a "very dynamic" and so far, the state government has allocated about $2.6 billion to support western communities through 2015.
Lynn Helms, director of the North Dakota Oil and Gas Division, recently issued four drilling permits to emerging Strata-X Energy for parts of the Williston Basin, which includes the Bakken and Three Forks formations. He said he was making the announcement more public because it was rare for companies to look toward a more central area of the state he considered frontier territory.
With the BLM streamlining act now law, the oil gains from North Dakota may only continue to expand.
This could also be OPEC's demise
Imagine a company that rents a very specific and valuable piece of machinery for $41,000... per hour (that's almost as much as the average American makes in a year!). And Warren Buffett is so confident in this company's can't-live-without-it business model, he just loaded up on 8.8 million shares. An exclusive, brand-new Motley Fool report reveals the company we're calling OPEC's Worst Nightmare. Just click HERE to uncover the name of this industry-leading stock... and join Buffett in his quest for a veritable LANDSLIDE of profits!
Related article from Oilprice.com: Why California will Never Fulfill its Shale Potential
The article Why North Dakota's Oil Future Just Got Brighter originally appeared on Fool.com.Written by Daniel J. Graeber at Oilprice.com. The Motley Fool has no position in any of the stocks mentioned. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.
Copyright © 1995 - 2013 The Motley Fool, LLC. All rights reserved. The Motley Fool has a disclosure policy.