Monday, September 6, 2010

A Boom Gaining Recognition

Now that the BP oil spill that, excuse the pun, flooded the newspapers ad naseum has simmered down, a new and more positive story is developing. In the state of North Dakota, an oil boom is taking place. Thanks to new technologies, oil and natural gas are being extracted from the ground at a feverish pace. The Bakken Shale formation that lies deep underground in North Dakota and Montana as well as the province of Saskatchewan, is providing handsomely for the region.

In 1951, when the Hess Corporation discovered vast resources of oil and natural gas, North Dakota had the potential to become a major domestic energy supplier. Today, the remote area's promising past has turned into a flourishing future. Oil production there has grown from 80,000 BPD (barrels per day) in 2004 to almost 300,000 BPD this year. According to U.S. Geological estimates, 4.3 billion barrels of recoverable oil linger well below the earth's surface. This year, the state became the 4th largest supplier of oil trailing only CA, AK, and TX.

As the world frets about its oil supply, new technology is setting those worries at ease. Companies have begun employing new drilling techniques that have substantially boosted production. Hydraulic fracturing (also known as "fracking") and extended reach horizontal drilling - where drill bits dig 2 miles below the earth's surface then 2 miles side to side - in some cases, have aided North Dakota wonderfully. Thanks to these new tactics, oil production has increased in the United States for the first time since 1991 on a year by year basis.

These scientific advances have contributed economic strength as well. North Dakota currently enjoys the nation's lowest unemployment rate, at 3.6%. The boom has hotel rooms in short supply, airlines adding flights and even McDonalds is handing out $300 bonuses for new employees. A $700 million budget surplus is predicted for this year, and it's the only state in the country adding jobs. To top it all off, North Dakota's residents enjoy the highest standard of living in the U.S. (

With enormous amounts of oil and natural gas throughout the U.S., now is the time to change our energy policy. Job creation during this anemic growth period and the reduction of our dependence on foreign oil seems like a no-brainer to me. Who would have thought such an unassuming Midwestern state would provide the blueprint for successful energy transition?

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