AS I SEE IT
By Neal A. Shipman
For the first time since 1995, the United States produced more crude oil in October than it imported. That alone is a staggering feat considering how dependent this country has been on oil from the Middle East and the rest of the oil-producing countries for decades. But it also points to the new role that North Dakota, thanks to the development of the oil shale deposits in the Bakken and Three Forks formations, has taken to help this country achieve this level of energy independence.
According to the Energy Information Administration, U.S. crude oil production reached 7.74 million barrels a day in October, down slightly from September because of disruptions from Tropical Storm Karen, but up 17 percent from the year before. In all, U.S. production in October was at the highest level of any month since May 1989.
The turnaround in United States oil production has been very rapid. Five years ago, U.S. oil production hit a 62-year low. Since then, domestic production has increased by more than 50 percent.
And being less dependent on foreign oil suppliers is good news financially for the United States.
According to Mark M. Zandi, chief economist of Moody’s Analytics, rising domestic oil production means that the U.S. will have a smaller trade deficit, which is a big plus for the economy and that this country’s economy will be less sensitive to increases in global oil prices.
According to figures compiled by Zandi, the oil import bill as a percentage of the gross domestic product in the third quarter of this year was lower than any quarter since 1986. The firm estimates that shale oil output will result in an $80 billion reduction in imports this year.
To put North Dakota’s increased role into the national perspective, it needs to be pointed out that during the month of September, the state’s oil wells pumped out just short of one million barrels of oil per day. That means that North Dakota is producing just under one-seventh of this nation’s total oil production.
And even more impressive is the fact that, according to Lynn Helms, director of Mineral Resources for the North Dakota Industrial Commission, 93 percent of the amount of oil being produced in North Dakota is coming from the Bakken and Three Forks formations. And of that production, the vast majority is coming from the four counties of McKenzie, Williams, Mountrail and Dunn.