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Regulator: ND's oil production could double

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POSTED May 23, 2012 10:57 p.m.



 

BISMARCK, N.D. (AP) — North Dakota could double its oil production by 2015 to more than 1 million barrels daily, putting it on par with Texas "if everything goes our way," the state's top oil regulator told industry and government officials Wednesday.

Lynn Helms, director of the state Department of Mineral Resources, said the increase from about 575,000 barrels at present would depend on a strong global economy, steady oil prices and a favorable federal regulatory climate.

North Dakota has gone from the nation's ninth-biggest oil producer in 2006 to No. 2 this year, trailing only Texas, which produced about 1.1 million barrels daily in February, the most recent month for which there are figures.

The jump in production in North Dakota and the resulting economic activity likely would push the state's population to more than 1 million residents, Helms told an audience of several hundred at the Williston Basin Petroleum Conference and Expo in Bismarck.

The U.S. Census Bureau's most recent count shows North Dakota's population at a record 683,932, an increase of more than 11,300 in the past year and eclipsing the state's previous population record set in 1930.

"A population of a million. That is a cool number," Helms said. "It would be a wonderful state to live in."

Helms' best-case-scenario forecast is unusual in that most state and industry officials typically have balked at predicting long-term growth in the state's oil patch.

Gov. Jack Dalrymple earlier Wednesday told conference-goers that he would not speculate on how big North Dakota's oil boom might become.

"I'm done guessing," Dalrymple said. "I've been so wrong in the past."

Ron Ness, president of the North Dakota Petroleum Council, would not comment on Helms' forecast to The Associated Press.

"That's not my deal," said Ness, whose group represents several hundred companies working in North Dakota.

But billionaire Oklahoma oilman Harold Hamm told the AP that Helms' prediction was probably accurate, if not a little low.

"We've been saying for two years that North Dakota could be at 1.2 million barrels a day by 2015," said Hamm, chairman and chief executive officer of Continental Resources Inc., an independent oil and gas company based in Oklahoma City.

Continental, which has been drilling in North Dakota for more than two decades, was one of the first to tap the rich Bakken and underlying Three Forks formations in the state.

Both formations that lie two miles beneath the surface rely on horizontal drilling and hydraulic fracturing, a process where water, grit and chemicals are pumped underground at high pressure to fracture oil-bearing rock and promote oil flows.

The technique is credited with driving North Dakota's oil rush but it's also been blamed for endangering water quality in some other states.

Helms and other officials at the conference worry that federal rules being drafted on hydraulic fracturing would lengthen permit approval times, or worse.

Tom Richmond, the administrator of the Montana Oil and Gas Conservation Board, said hydraulic fracturing is key to developing the Bakken formation in that state.

"Banning hydraulic fracturing in the Bakken is about the same as banning drilling in the Bakken," Richmond said.

Jack Gerard, president and CEO of the Washington, D.C.-based American Petroleum Institute, called North Dakota an energy juggernaut that serves as a shining example for the nation.

"North Dakota is a model of economic development and a model of opportunity," said Gerard, whose lobbying group is the largest in the U.S. for the oil and gas industry.

Gerard told North Dakota officials that he has talked with their contemporaries in Texas about North Dakota's explosive growth.

"I called Texas and told them you're on your way and they need to be mindful," Gerard said.

 

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