The Bakken shale formation in North Dakota continues to be a bountiful source of domestic oil, and production rates have only increased as drilling forges on.
On Tuesday, the North Dakota Department of Mineral Resources released figures that showed an increase in wells and in oil production for the month of April.
7,025 wells were producing 18.2 million barrels of crude oil that month, up from 6,932 wells producing 17.9 million barrels in March.
North Dakota still ranks number two in oil-producing states, falling only behind Texas after surpassing Alaska’s production in March.
In April, Alaska’s oil production was down significantly from the month before, dropping to about 16.5 million barrels from a previous 17.5 million.
And some Alaskans are afraid North Dakota will push their state aside even more with this continuous oil supply.
Alaska’s Tesoro will begin refining Bakken light, sweet crude oil in September.
Until now, Tesoro Alaska, regional branch of the Tesoro Corporation (NYSE: TSO), was mainly responsible for refining Alaska’s own North Slope crude and Cook Inlet oil. But these kinds cost more and take more effort to clean than Bakken oil.
30,000 barrels per day of Bakken oil will be shipped by train to the refinery in Nikiski, Alaska, which has the capacity to refine 120,000 barrels per day.
It is rumored that the oil may replace the North Slope oil, which has locals concerned about the economic impact of replacing state-produced oil with out-of-state oil.
Meanwhile, North Dakota is weighing its own local risks and benefits that come with the oil boom. Though the unemployment rate, especially in Bakken counties, has significantly lowered, newly employed oil workers are often homeless, living anywhere they can from man camps to trailer parks.
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On Tuesday, the state put to a vote whether to abolish property taxes. The influx of state revenue from the Bakken allowed the option of tax abolition to become a possibility, though voters decided to keep it in place.
From Reuters:
Supporters of getting rid of the property tax system argued that the state’s oil surplus funds should be directed to local costs in lieu of property taxes. The problem is that North Dakota’s oil income is already promised to fund other budget items in the state.
State revenue in North Dakota from property taxes currently totals roughly $812 million. Should the income from the Bakken ever waver, even if the funds could be redirected, the state could get itself into trouble.
But though this wavering in price is certainly possible, right now the North Dakota Bakken is looking pretty successful. It’s still behind Texas’ March production rate of 1.75 million bpd, but officials expect that gap to shrink.
Just look at this chart of North Dakota oil production over 12 years, courtesy of Mark Perry.
The shale oil boom is providing the United States with more domestic energy than ever. And North Dakota is one of the main hubs of productivity.
