On occasion I talk about the impact the oil industry has had on North Dakota. Texas may produce more oil than North Dakota, but the impact will be much, much greater on my home state. A reader recently noted the same thing and sent me the following:
While having coffee and getting my morning fix of news I wondered what
the numbers would be so I did a little quick research to put ND oil
production in perspective.
I don't recall ever seeing these numbers and
this is my math so it's subject to error but what I found is
astounding.
Texas with a population of about 28 million and oil
production of about 2.8 million barrels per day produces about 1/10th of
a barrel per resident per day.
North Dakota with a population of about 700,000
and oil production of about 1 million barrels per day produces about 1.4
barrels per resident per day.
This means ND produces about 14 times as
much oil per resident as Texas. Wow, talk about story lines. If I had a
little more time I'd do the population ratio for taxes collected but my
two oldest grand kids have a break from school
(girl, 5 and boy, 6) and I sense two more engineers in the family so we
are going to be very busy in Fargo for the next week.
(I purposely left a bit of identifying data of the reader off the note.)
In fact, the spread (1/10 vs 1.4 bbls) could widen. It might be an interesting metric to track.
I agree completely with the writer. I post a lot of stories about how others (New Yorkers, for example) perceive "us" but the bigger story is the impact the oil and gas industry has on a very, very small state. In addition, it isn't really "North Dakota" but rather four, or five, or six counties in western North Dakota, and perhaps one or two counties in eastern Montana. But even that's a stretch: one could argue that right now it's all about Williams County, McKenzie County, one-half of Mountrail County, and one-half of Dunn County. Of course, over time, the southwestern counties in North Dakota will also play a bigger role, but the vast majority of oil is being produced in 2 + 1/2 + 1/2 counties.
Just from the drilling alone, almost $2 billion/month is being spent in western North Dakota (200 wells x $10 million/well). Yes, the actual number is slightly less than 200, and the operators say they are bringing the cost of wells down to $7 million, but ...
In addition, the state is pouring money into highways (new highways, widening, and maintenance) in a very small area. Texas, on the other hand, the highway money is spread across a much bigger state, and might even be concentrated in the DFW area, relatively far away from the oil fields.
On the other hand, of course, the ports along the Texas coast and the refineries are a whole different story.
