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Page added on May 27, 2014

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Sky Could Fall On North Dakota’s Oil If We’re Not Careful, Shale Boss Says

Production

All parties with a collective interest in seeing the North Dakota oil experiment succeed need to work together because, right now, the boss at the largest stakeholder in the Bakken shale says opponents are drawing a bead on the region. And it’s not just exploration and production that’s a concern.

Oil production from the Bakken shale oil play in North Dakota is increasing at an exponential rate. State government data show production for May, the last full month for which complete information is available, was 977,051 barrels per day, a new all-time high.

On April 28, Continental Resources, the largest stakeholder in the Bakken play, said the field produced its 1 billionth barrel of oil at some point during first quarter 2014. The company’s chairman, Harold Hamm, said that, at the rate things are going now, production could hit the 2 million bpd mark by the end of the decade if, and it’s a big if, nothing goes wrong.

“We can’t have any more issues,” Continental’s boss said.

In overall production terms, there’s not much going wrong in the Bakken play. Though this year’s rough winter slowed things down, Adam Sieminski, the top official at the U.S. Energy Information Administration (EIA), said the slump would be erased in the next few months.

But there are other problems needling away in the North Dakota oil patch.

Last week, the FBI said it has only two agents working in the area and needs the industry’s help because state law enforcement agencies can’t keep up with the growing crime rate. There’s even a non-profit group, 4her North Dakota, to combat sex trafficking now.

On the legal margins, meanwhile, it’s not just the male members of the oil industry in North Dakota striking it rich. Female strippers, on a good night, are bringing home the bacon to the tune of $2,500 per shift.

Domestic violence and bar brawls are commonplace in parts of the state that boast an unemployment rate of next to zero, but a population boom creating a chronic housing shortage.

The oil sector itself is no stranger to problems. In September, about 20,000 barrels of crude oil spilled in rural Tioga, N.D., and state officials think it will take about two years to clean up the mess.

Three months later, flames shot 100 feet in the air after an eastbound train carrying oil for BNSF Railway hit a westbound train carrying grain in Casselton, N.D. Though no injuries were reported, it was just one of a string of train accidents involving Bakken crude.

A July train accident involving Bakken crude in Lac-Megantic, Quebec, left more than 40 people dead.

That’s part of the dark underbelly of the North Dakota oil industry that’s not making much of a splash in the circle of energy wonks keeping steady count of wells drilled and barrels produced. But it’s part of the narrative that may throw North Dakota’s oil future off the rails, in more ways than one.

“We’re in the crosshairs,” Continental’s Hamm said. “If we have anything [go wrong,] they’re going to shut us down.”

OilPrice.com



7 Comments on "Sky Could Fall On North Dakota’s Oil If We’re Not Careful, Shale Boss Says"

  1. Beery on Tue, 27th May 2014 8:59 am 

    “Oil production from the Bakken shale oil play in North Dakota is increasing at an exponential rate.”

    It was, but not anymore.

  2. Perk Earl on Tue, 27th May 2014 10:22 am 

    “We’re in the crosshairs,” Continental’s Hamm said. “If we have anything [go wrong,] they’re going to shut us down.”

    Stop the flow of oil? Is this guy kidding or something?

  3. Beery on Tue, 27th May 2014 11:49 am 

    It sounds to me like an attempt to start the propaganda war over the upcoming peak of shale oil. What they want to do is blame government regulation, environmental fearmongering, weather, rail disasters, crime rates, etc., for the fact that they can’t continue to produce at the rates they have been doing. Anything to distract people from the reality, which is that all those shale oil plays are about to go bust. If they can keep the music playing for a bit longer, they can get a few more rubes to buy into the shale oil boom.

  4. Northwest Resident on Tue, 27th May 2014 11:59 am 

    Beery — Be careful, or you’ll soon be under investigation for the crimes of clear level-headed thinking, failure to buy the propaganda, ability to see through the bullshit and most dire of all, the crime of not marching in lockstep with the rest of the lemming herd.

  5. Juan Pueblo on Tue, 27th May 2014 12:45 pm 

    I wish I could believe that 2 million bpd by 2020 story. Not that it would make much difference to the world since by then a million more or less per day would only buy us weeks or months at the most considering shale wells’ production declines.

  6. Juan Pueblo on Tue, 27th May 2014 12:47 pm 

    Beery, you are right. That’s all it is. Double Speak!

  7. MKohnen on Wed, 28th May 2014 12:50 am 

    This article tickles my funny-bone! I’m sure the US is going to derail its perceived oil life-line because of the problems Harold Hamm outlined. That’s like saying junkies might stop using because they found out that there was violence involved in the drug trade. Ain’t gonna happen! The only reason for issuing this side-splitting narrative has to be the one Beery has already stated. More propaganda.

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