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The “Economic Miracle State” of North Dakota pumped another record amount of oil during the month of June at a rate of more than 660,000 barrels per day, which was an increase of 3.2% compared to oil production in May (see chart above). North Dakota’s record-setting oil output in June was noteworthy for several reasons:
1) The year-over-year increase in oil production of 71.1% in June followed annual increases of 75.5% in May and 73.5% in April, and those are the three largest increases in North Dakota history.
2) North Dakota produced almost 34% more oil than Alaska in June, marking the fourth consecutive month that North Dakota out-produced Alaska. The Peace Garden State surpassed Alaska’s oil production for the first time in March to become the country’s new No. 2 oil state, behind only Texas.
3) The number of producing oil wells in the state surpassed 7,000 for the first time ever, setting a new record high of 7,130 wells in June. Over the last year, an average of 5 new oil wells have been put into production each day, and each new well is the equivalent of adding a new $8-10 million business to the state’s economy, see recent CD post for more details.
4) The amount of oil produced per oil well in the state increased to a new record high of 93 barrels per day, an increase of 29% compared to a year ago, and a sign that the efficiency of shale oil production is increasing significantly. Both the increasing number of wells and the increasing output per well is contributing to record high production levels. Over just the last two years since June 2010, daily oil production in North Dakota has more than doubled.
As a result of the ongoing oil boom in the Bakken area, North Dakota continues to lead the nation with the lowest state unemployment rate at a four-year low of 2.9% in June, and more than five percentage points below the national average of 8.2%. There were nine North Dakota counties with jobless rates at or below 2.0% in June, and Williams County, which is at the center of the Bakken oil boom, continues to boast the lowest county jobless rate in the country at just 0.9%. The exponential growth in North Dakota oil production has fueled exponential growth in the state’s “Natural Resources and Mining” employment, which has tripled in less than three years, and reached almost 22,000 in June. Overall, North Dakota state employment has increased by 6.5%, almost five times the 1.3% increase in jobs nationally.
Bottom Line: The ongoing record-setting oil production in North Dakota continues to make it the most economically successful state in the country, with record levels of employment and income growth, a labor shortage, increasing tax revenues, the lowest foreclosure rate in the country, a strong housing and construction market, and jobless rates in nine counties of the Bakken region at or below 2.0%. Call it the “Dakota Model” of job creation and economic prosperity that is based on developing America’s vast energy resources, which is an economic model that could easily be replicated elsewhere if more domestic energy resources were opened up to exploration and drilling. Under a Romney-Ryan administration, North Dakota’s job-creating, energy-based economic prosperity will likely spread to new parts of the country in 2013.
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