U.S. oil production passes imports

The new crude oil production from shale formations like the Bakken in North Dakota are making a huge difference in the U.S. energy profile. In October, for the first time since 1995, more crude oil was produced in the United States than the nation imported. It isn’t energy independence but it’s a big step in that direction.

The surge in domestically produced oil can be tracked to the development of horizontal drilling technologies and hydraulic fracturing. Combined, the two advances in oil-field technology have, for the first time, allowed drillers to effectively tap shale formations that hold crude oil and natural gas.

Because of horizontal drilling and fracking, North Dakota has been setting oil production records. The state has passed sister states in oil production, and only Texas produces more crude oil than North Dakota.

Experts believe that the U.S. will surpass Russia and Saudi Arabia as the world’s top oil producer by 2015. North Dakota’s production will be a big part of that changed status.

Of course, North Dakotans have been feeling the rising volumes of crude oil production. The oil activity in western North Dakota has been intense, putting extreme demands on public and private services, generating profits for oil-related business and mineral owners, and pumping up the state budget surplus with tax revenues. Creating and expanding infrastructure has been the priority for everyone associated with the oil boom. Environment issues, related to drilling and transporting oil, are providing challenges to the state and nation as production expands.

The North Dakota experience, seen close at hand, has a tendency to eclipse what’s happening with oil and gas nationally. The drive for U.S. oil independence, long thought to be wishful thinking, seems, now, probable. Shale formations have been the game changer. And the remaking of North Dakota’s economy, with energy taking on a larger and larger role, is part of that change.

Via: The Bismarck Tribune

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North Dakota's other big money-making opportunity

A handful of counties in North Dakota are churning out more oil and gas than the entire state of Alaska. Welcome to the Bakken, the jewel of The Rough Rider State.

But a look beyond the drillers working the state's Bakken field reveals many players who see another opportunity: building North Dakota's infrastructure.

In May, environmental nonprofit group Ceres released a report that drillers in the Bakken are flaring—or burning off—more than $100 million in natural gas a month. That's nearly one-third of all the gas drilled in the region, and it's a figure that has tripled in the past three years. The practice is so prolific that NASA says astronauts can see the region's flares from space.

(Read more: Good news: Gas prices are falling)

The problem? While drilling in the Bakken has increased the nation's supply of natural gas, the buildout of the pipelines that transport it has not been able to keep up. Drillers with a glut of gas are left with two options: release their excess supply into the atmosphere untreated or burn it off. They typically choose the latter.

It's not an option that the drillers like. Burning product is essentially burning money. Last week, North Dakota's mineral rights holders launched a series of class action lawsuits against the state's biggest drillers over the lost revenue.

Some pipeline builders have sensed an opportunity. Earlier this month, Energy Transfer Equity agreed to buy PVR Partners for $3.8 billion, while Crestwood Midstream announced a $750 million deal to buy privately held Arrow Midstream Holdings. Crestwood will become one of the biggest processors in the Bakken after the deal. 

Via: CNBC

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