Harold Hamm, the Oklahoma-based founder and CEO of Continental Resources, the 14th-largest oil company in America, is a man who thinks big. He came to Washington last month to spread a needed message of economic optimism: With the right set of national energy policies, the United States could be “completely energy independent by the end of the decade. We can be the Saudi Arabia of oil and natural gas in the 21st century.”

“President Obama is riding the wrong horse on energy,” he adds. We can’t come anywhere near the scale of energy production to achieve energy independence by pouring tax dollars into “green energy” sources like wind and solar, he argues. It has to come from oil and gas.

You’d expect an oilman to make the “drill, baby, drill” pitch. But since 2005 America truly has been in the midst of a revolution in oil and natural gas, which is the nation’s fastest-growing manufacturing sector. No one is more responsible for that resurgence than Mr. Hamm. He was the original discoverer of the gigantic and prolific Bakken oil fields of Montana and North Dakota that have already helped move the U.S. into third place among world oil producers.

How much oil does Bakken have? The official estimate of the U.S. Geological Survey a few years ago was between four and five billion barrels. Mr. Hamm disagrees: “No way. We estimate that the entire field, fully developed, in Bakken is 24 billion barrels.”

If he’s right, that’ll double America’s proven oil reserves. “Bakken is almost twice as big as the oil reserve in Prudhoe Bay, Alaska,” he continues. According to Department of Energy data, North Dakota is on pace to surpass California in oil production in the next few years. Mr. Hamm explains over lunch in Washington, D.C., that the more his company drills, the more oil it finds. Continental Resources has seen its “proved reserves” of oil and natural gas (mostly in North Dakota) skyrocket to 421 million barrels this summer from 118 million barrels in 2006.

“We expect our reserves and production to triple over the next five years.” And for those who think this oil find is only making Mr. Hamm rich, he notes that today in America “there are 10 million royalty owners across the country” who receive payments for the oil drilled on their land. “The wealth is being widely shared.”

One reason for the renaissance has been OPEC’s erosion of market power. “For nearly 50 years in this country nobody looked for oil here and drilling was in steady decline. Every time the domestic industry picked itself up, the Saudis would open the taps and drown us with cheap oil,” he recalls. “They had unlimited production capacity, and company after company would go bust.”

Today OPEC’s market share is falling and no longer dictates the world price. This is huge, Mr. Hamm says. “Finally we have an opportunity to go out and explore for oil and drill without fear of price collapse.” When OPEC was at its peak in the 1990s, the U.S. imported about two-thirds of its oil. Now we import less than half of it, and about 40% of what we do import comes from Mexico and Canada. That’s why Mr. Hamm thinks North America can achieve oil independence.

The other reason for America’s abundant supply of oil and natural gas has been the development of new drilling techniques. “Horizontal drilling” allows rigs to reach two miles into the ground and then spread horizontally by thousands of feet. Mr. Hamm was one of the pioneers of this method in the 1990s, and it has done for the oil industry what hydraulic fracturing has done for natural gas drilling in places like the Marcellus Shale in the Northeast. Both innovations have unlocked decades worth of new sources of domestic fossil fuels that previously couldn’t be extracted at affordable cost.

Mr. Hamm’s rags to riches success is the quintessential “only in America” story. He was the last of 13 kids, growing up in rural Oklahoma “the son of sharecroppers who never owned land.” He didn’t have money to go to college, so as a teenager he went to work in the oil fields and developed a passion. “I always wanted to find oil. It was always an irresistible calling.”

He became a wildcat driller and his success rate became legendary in the industry. “People started to say I have ESP,” he remarks. “I was fortunate, I guess. Next year it will be 45 years in the business.”

Mr. Hamm ranks 33rd on the Forbes wealth list for America, but given the massive amount of oil that he owns, much still in the ground, and the dizzying growth of Continental’s output and profits (up 34% last year alone), his wealth could rise above $20 billion and he could soon be rubbing elbows with the likes of Warren Buffett.

His only beef these days is with Washington. Mr. Hamm was invited to the White House for a “giving summit” with wealthy Americans who have pledged to donate at least half their wealth to charity. (He’s given tens of millions of dollars already to schools like Oklahoma State and for diabetes research.) “Bill Gates, Warren Buffett, they were all there,” he recalls.

When it was Mr. Hamm’s turn to talk briefly with President Obama, “I told him of the revolution in the oil and gas industry and how we have the capacity to produce enough oil to enable America to replace OPEC. I wanted to make sure he knew about this.”

The president’s reaction? “He turned to me and said, ‘Oil and gas will be important for the next few years. But we need to go on to green and alternative energy. [Energy] Secretary [Steven] Chu has assured me that within five years, we can have a battery developed that will make a car with the equivalent of 130 miles per gallon.’” Mr. Hamm holds his head in his hands and says, “Even if you believed that, why would you want to stop oil and gas development? It was pretty disappointing.”

Washington keeps “sticking a regulatory boot at our necks and then turns around and asks: ‘Why aren’t you creating more jobs,’” he says. He roils at the Interior Department delays of months and sometimes years to get permits for drilling. “These delays kill projects,” he says. Even the Securities and Exchange Commission is now tightening the screws on the oil industry, requiring companies like Continental to report their production and federal royalties on thousands of individual leases under the Sarbanes-Oxley accounting rules. “I could go to jail because a local operator misreported the production in the field,” he says.

The White House proposal to raise $40 billion of taxes on oil and gas—by excluding those industries from credits that go to all domestic manufacturers—is also a major hindrance to exploration and drilling. “That just stops the drilling,” Mr. Hamm believes. “I’ve seen these things come about before, like [Jimmy] Carter’s windfall profits tax.” He says America’s rig count on active wells went from 4,500 to less than 55 in a matter of months. “That was a dumb idea. Thank God, Reagan got rid of that.”

A few months ago the Obama Justice Department brought charges against Continental and six other oil companies in North Dakota for causing the death of 28 migratory birds, in violation of the Migratory Bird Act. Continental’s crime was killing one bird “the size of a sparrow” in its oil pits. The charges carry criminal penalties of up to six months in jail. “It’s not even a rare bird. There’re jillions of them,” he explains. He says that “people in North Dakota are really outraged by these legal actions,” which he views as “completely discriminatory” because the feds have rarely if ever prosecuted the Obama administration’s beloved wind industry, which kills hundreds of thousands of birds each year.

Continental pleaded not guilty to the charges last week in federal court. For Mr. Hamm the whole incident is tantamount to harassment. “This shouldn’t happen in America,” he says. To him the case is further proof that Washington “is out to get us.”

Mr. Hamm believes that if Mr. Obama truly wants more job creation, he should study North Dakota, the state with the lowest unemployment rate in the nation at 3.5%. He swears that number is overstated: “We can’t find any unemployed people up there. The state has 18,000 unfilled jobs,” Mr. Hamm insists. “And these are jobs that pay $60,000 to $80,000 a year.” The economy is expanding so fast that North Dakota has a housing shortage. Thanks to the oil boom—Continental pays more than $50 million in state taxes a year—the state has a budget surplus and is considering ending income and property taxes.

It’s hard to disagree with Mr. Hamm’s assessment that Barack Obama has the energy story in America wrong. The government floods green energy—a niche market that supplies 2.5% of our energy needs—with billions of dollars of subsidies a year. “Wind isn’t commercially feasible with natural gas prices below $6″ per thousand cubic feet, notes Mr. Hamm. Right now its price is below $4. This may explain the administration’s hostility to the fossil-fuel renaissance.

Mr. Hamm calculates that if Washington would allow more drilling permits for oil and natural gas on federal lands and federal waters, “I truly believe the federal government could over time raise $18 trillion in royalties.” That’s more than the U.S. national debt, I say. He smiles.

This estimate sounds implausibly high, but Mr. Hamm has a lifelong habit of proving skeptics wrong. And even if he’s wrong by half, it’s a stunning number to think about. So this America-first energy story isn’t just about jobs and economic revival. It’s also about repairing America’s battered balance sheet. Someone should get this man in front of the congressional deficit-reduction supercommittee.

Written By STEPHEN MOORE

online.wsj.com/article/SB10001424052970204226204576602524023932438.html

Unemployment is a national problem in the United States, but you wouldn’t know that if you traveled through North Dakota.

Suddenly, people are moving to the Peace Garden State, where an oil boom has immunized residents from the most severe recession in decades. Wages are up, and work is plentiful.

The state’s unemployment rate recently hovered a little above 3%, and “Help Wanted” signs litter the landscape of cities such as Williston in the way “For Sale” signs populate the streets of Las Vegas.

“It’s a zoo,” said Terry Ayers, who came to town from Spokane, Wash., slept in his truck and found a job within hours of arrival, tripling his salary. “It’s crazy what’s going on out here.”

Billions of dollars are coming into the state and thousands of people are following — all because millions of barrels of oil are flowing out.

The result: An old-fashioned oil boom.

There’s little available housing in parts of North Dakota, so newcomers sleep in truck stops and parking lots of Wal-Mart stores. Developers are building hundreds of houses and thousands of apartment units.

The McDonald’s in Williston is one of the busiest in the country, and it needs to pay $15 an hour just to attract employees.

And then there are the trucks — thousands of them — on the state’s roads. One left turn in Williston gets so backed up with truck traffic that it can take hours to get through the intersection.

And then there are the trucks — thousands of them — on the state’s roads. One left turn in Williston gets so backed up with truck traffic that it can take hours to get through the intersection.

Managing growth

“If you’re not making money now, there’s a major problem,” said Williston Mayor Ward Koeser, who is overwhelmed with managing the city’s growth. Among the problems Koeser is grappling with are sewage treatment, building permits and an exponential increase in traffic violations.

As for the oil itself, it comes from the Bakken rock formation, which spans 14,000 square miles in North Dakota, Montana and Canada. The U.S. Geological Survey says there are at least 4 billion barrels of recoverable oil in the Bakken, but other estimates indicate that it could be four to five times that.

“Clearly, it is the largest oil field we’ve found in North America in the last 40 years,” said Bud Brigham, the founder and chief executive of Brigham Exploration(BEXP +0.66%, news), which has staked the company’s future on the Bakken oil business. “If it’s more than 15 billion barrels, it may be the biggest oil field found in America ever.”

Fortunes tied to ‘fracking’

The Bakken has been a known source of oil for decades, but only in recent years has it become feasible to profitably get the oil out of the ground. There are two reasons for this: oil prices and drilling technology.

Oil companies, including Brigham, Continental Resources (CLR -0.80%, news), Hess (HES -0.14%, news) andEOG Resources (EOG -0.35%, news), drill two miles down and two miles horizontally. Then, they use hydraulic fracturing, or “fracking,” to create space for oil to flow out of the rock — hundreds of thousands of barrels a day, literally one drop at a time.

“In a couple of years, the Williston Basin (where the Bakken is located) will surpass the oil production out of Prudhoe Bay, Alaska,” said Rick Muncrief, senior vice president at Continental.

Of course, that’s as long as prices remain relatively high and fracking is allowed to continue.

“Where we are today, we can generate really solid returns at $65 to $70 a barrel,” said Bud Brigham.

As for fracking, it is the process that makes oil extraction possible in the dense rock and shale of the Bakken. Basically, equipment creates thousands of fissures in the rock, and then sand, water and even ceramics are blasted into the formation to prop open the fissures to let the oil flow.

There are chemicals in the “frack water,” and there has been someenvironmental backlash. So far, it looks like the drilling method will be permitted, but if fracking were limited or disallowed, the Bakken boom would go bust.

For now, it is full speed ahead, and that means hiring will continue at a rapid clip. The trickle-down is ubiquitous, and the money is eye-popping.

Shelter for workers

If you have a license and no criminal record, you can get a six-figure trucking job almost overnight. Real-estate construction is almost as frenzied as the oil drilling, and there’s a huge business in housing the workers.

The business is sometimes referred to as providing “man camps,” although some women stay there, too. It’s a lot like most people would think: trailers in rows, with workers sleeping in simple single rooms or bunking with others.

Food is served in a cafeteria, and companies such as Halliburton (HAL +1.35%, news) andSchlumberger (SLB +1.87%, news) pay an average of $120 per person per night to safely house and feed their workers.

“We have almost 3,000 bedrooms under management, covering over hundreds of miles in the Bakken,” said Brian Lash who runs Target Logistics, the biggest “man camp” provider in the Bakken. (It describes the camps as “lodges.”)

Lash has dealt with booms before, and his company’s actions indicate that he believes the Bakken has room to grow.

“We’ve got almost $100 million in buildings and underground infrastructure so far in the Bakken,” he said in August. “We have another three projects that we’re about to start.”

In Williston, the “man camp” is a better place to be than the Wal-Mart parking lot or the back of a pickup. But most people don’t care, as long as the work continues and the money continues to flow with the oil.

“I have a bed in the back of the camper shell,” Terry Ayers said as the sun began to set on the back end of the Wal-Mart parking lot. “You just can’t get back there (right now). It’s still too hot. You have to wait until the sun drops.”

After a little back-and-forth banter, he sums it up: “All for a job.”

Story written by  Brian A. Shactman, CNBC.com

money.msn.com/investing/unemployed-go-to-north-dakota-cnbc.aspx

He says states could learn from this “boom we can only hope it infects the rest of the country.”

The host of the CNBC show let more than North Dakota know about the land of oil and honey while taping on location at a pumping unit outside Killdeer. His national program aired at least twice Wednesday.

“The recession could still beckon in part because the price of oil is way too high,” Cramer says. “Hey, good for the 660,000-some people who live here, in the great state of North Dakota, but not so good for the 310 million other Americans who don’t.”

The show was just one more way for people to know that it isn’t hopeless, there are jobs to be had and Gov. Jack Dalrymple, who Cramer invited on as a guest, let the world know this is a hot spot.

When Cramer asked about the “magic formula for growth” and “to find out what the heck is going on here,” Dalrymple said, “You’ve got to focus on job creation. In our whole orientation for the last 10 years has been creating jobs in North Dakota and let everything fall into place behind that.”

There are 31,000 jobs available in North Dakota in all sectors, the governor says, and most of them are in the Red River Valley in the eastern portion of the state.

Cramer asked if the state can handle an influx of workers.

“We’ve got people coming this way every day,” Dalrymple said. “They’re finding great jobs and we’re finding places for them to live and things are going very well.”

We can agree with some of this. There are great jobs and some things are going very well, but “we’re finding places for them to live?”

Housing is a challenge for those in the oil industry and outside of the oil industry. Housing is not falling into place behind job creation as the governor implies.

If the state can help find housing there are likely many who will take advantage of this service — like the man who erected a tent in a small cove of trees off of an Interstate 94 ramp last week, the family of four living in a camper and the people who reside in an apartment building in east Dickinson who got a surprise letter a few days ago that states their rent has been bumped up $150 per month.

Maybe the state is helping find places to live, but what about affordable places?

Part of what Dalrymple was referring to was the Department of Commerce’s services for those interested in relocating, Jeff Zent, the governor’s spokesman, said Friday.

The DOC will direct people (and walk them through the site if needed) to www.experiencend.com. Here they can get information about job resources and input on finding rentals and homes for sale.

The Dickinson Chamber of Commerce distributed 66 relocation packs in July and received 436 calls — 90 percent of them regarding relocation, according to Chamber staff.

The Dickinson Press gets calls from out-of-staters wondering where they can find housing. It’s likely a number of other businesses do, too and are facing the same challenges — how do we pay an employee enough money to keep up with rent. Rent is sky-high and increasing.

Renters will do their share of waiting if on a low income housing waiting list in the area. A person is fortunate to find apartments that cost less than $800 per month and many one-bedrooms go for more than $1,000 per month.

There is this euphoria about how great things are in the oil patch and it is easy to get caught up (maybe even more so when you are sitting behind cameras and a film crew follows your every move) and we believe the governor got caught up in it.

“Mad Money” has made an impact. The DOC has fielded calls from viewers over the past few days regarding jobs, Zent said.

If people come piling into North Dakota to get one of these 31,000 jobs mostly in the eastern part of the state, what will housing be like there? It is not pretty here.

There needs to be a balance as western North Dakota is on a fast track to change, but there should also be an option for current residents who want to keep their way of living. There are many stories of those who are leaving to find reasonably priced places to live.

We will be grateful if the rest of the country learns from North Dakota’s successes. But let’s also make sure the Roughrider State learns from those coming in with a fresh set of eyes.

We can only hope someone relocates here and figures out a long-overdue solution to a housing crunch that is kicking western North Dakota’s butt.

Dickinson Press Publisher Harvey Brock and Managing Editor Jennifer McBride are on The Press Editorial Board.

BISMARCK, ND – “One of the great myths is that somehow green energy jobs are going to replace the jobs of the past,” said North Dakota’s Public Service Commissioner Kevin Cramer. “They have to fit into the context of the whole.”

Green energy raises the price of energy itself, which actually hurts jobs, since practically every sector needs energy. But more importantly, green energy production technologies are much less labor intensive than traditional means, such as coal and gas.

“We know now of a large solar company that has just gone bankrupt. We know that wind farms don’t employ nearly as many people per megawatt produced as coal or nuclear plants,” said Cramer. “It is an experiment that has failed. It was predicted by lots of people, but now we have the experience to know that it has failed.”

Evergreen Solar Inc. filed for bankruptcy in California this month, and last month Green Vehicles of Salinas, California closed its operations, despite having been heavily subsidized by taxpayers. At the Johnson Controls plant in Michigan, which Obama recently praised to as an example of green job creation, over $300 million in grant money yielded the creation of only 150 jobs manufacturing electric car batteries. in Seattle, Washington, a $20 million grant for home weatherization created only 14 jobs and refitted three homes. “Stimulus funds intended to boost the green economy haven’t been well spent,” summarized a recent article in Investor’s Business Daily.

At last week’s The State of Energy Summit in Fargo, Basin Electric CEO Ron Harper illustrated this point well. While reaffirming the importance of having a diversified energy portfolio, Harper told conference attendees that green energy does not produce nearly as many jobs for people as lignite coal energy production or natural gas. Basin Electric has built two large wind projects, one each in North Dakota and South Dakota. The generating capacity of the two wind projects totals about 287 megawatts and employs only 19 people. “Renewables are an important part of a generating portfolio, but coal certainly creates more jobs,” said Harper.

North Dakota is an energy exporting state, rich in natural resources including very large deposits of lignite coal, natural gas, and sweet crude oil. Many citizens are concerned that the world’s non-renewable energy resources are being rapidly repeated, but Cramer says that is just another myth.

“Right here in North Dakota we have an 800 year supply of lignite coal that is economically recoverable with today’s technology at today’s burn rate,” said Cramer. “Frankly, I think it would be irresponsible to leave 800 years of coal underground or to leave billions of barrels under the ground. I believe those resources are as natural and as much a part of this earth’s creation as wind, and biomass and corn are.”

The United States boasts a full one quarter of the world’s coal deposits. North Dakota’s lignite is the second largest deposit of lignite coal in the world.

Written by Kate Bommarito

The signs of huge growth are everywhere.

Travel down a county road or along the west bypass in Williston and one is bound to see convoys of semis and oilfield trucks stretching for blocks.

Pull into any restaurant or store and one will see massive sales being rung up daily.

Drive out of town and one will see shops, pipe yards and industrial lots stretching outward for miles. The sight of oil rigs drilling and wells pumping black gold dot the landscape.

Those living and working in the Williston Basin are bound to call what is happening an oil boom.

However, the current run of record oil activity and investment in the Williston Basin to some does seem different.

This is the third go-around for western North Dakota oil activity. Two previous booms, one in the 1950s and the other in the late 1970s and early 1980s, faltered.

Could the third time be the charm? Could this oil boom be something more?

SIGNS OF A BOOM

An oil boom takes two things to happen. Those two things are oil and growth.

The oil is there. In 2008 the United States Geological Survey estimated there to be 2.1 billion barrels of recoverable oil in the Bakken Formation. In 2010 the North Dakota Geological Survey and Department of Mineral Resources put the recoverable amount of oil in the Three Forks Formation at 1.9 billion barrels.

The growth is also here.

Williston Mayor Ward Koeser said the growth the city is experiencing is at a level beyond that of previous booms.

“I think it’s actually going to get bigger, especially on the commercial side of things. I think developers from across the country are starting to realize there are some real opportunities here,” Koeser said.

Williston Economic Development Director Tom Rolfstad said the city is likely to see continued growth in housing and of infrastructure to new developments on all ends of town.

Rolfstad said the city is definitely looking to see a growing trend for the foreseeable future.

“In general at this point and time, most in the industry think this is going to be around for a long period of time,” Rolfstad said.

DIFFERENCES FROM PAST BOOMS

While the current oil activity has all the signs of a typical boom, there are indications that a more permanent oil industry in the region may be set to emerge.

Williston City Commissioner Brad Bekkedahl said the level of activity, and the types of investments being made, are signs that things may be different this time around.

“I think for the level of need for housing infrastructure and city infrastructure it’s very similar to the 1980s oil boom,” Bekkedahl said.

However, Bekkedahl said there are also differences from the past.

In the previous oil boom, he said companies were trying to utilize existing buildings while finding oil in the Williston Basin.

This time, he said many companies are investing huge amounts of dollars into new permanent facilities as well as long-term housing for their employees.

Koeser said the trend toward setting up more permanent facilities is definitely a promising sign of a more long-term oil play.

“Major companies are investing huge sums in the area. They don’t make these kinds of decisions without a lot of background and research,” Koeser said.

North Dakota Petroleum Council President Ron Ness pointed toward signs of long-term stability as well.

Ness said the infrastructure investments show that the Williston Basin figures to be a long-term part of the country’s energy production in the future.

“I think the Bakken has proven that it’s an incredible resource and these wells are going to be here a long time,” Ness said.

WORKING TO CATCH UP

To make sure that the activity in the Williston Basin doesn’t stall, western North Dakota communities are working to address growth as fast as possible.

These efforts are possible with state oil tax dollars. The investments are being made into water and sewer lines as well as roads and other essential infrastructure needed to keep the Williston Basin running.

Koeser said in the 1980s the city put in millions of dollars’ worth of infrastructure. When the oil went bust, the developers walked, leaving the city with a crippling level of debt.

“This go-around what we’re attempting is to get water and sewer to the developments and have the developer be responsible (for it),” Koeser said.

He added that companies are looking to have permanent housing built for employees willing to stay in the area long-term with their families. This is a new trend in the oil industry, he said.

Ness noted that while permanent housing lags, man camps have become the new short-term solution in western North Dakota.

“These man camps have provided a valuable tool,” Ness said.

If not for man camps and temporary housing, Ness said people would be living in their vehicles and tents. He said the camps have prevented this from happening on a large scale.

Ness also said another sign of the Williston Basin’s long-term viability is the Western Area Water Supply (WAWS) Project.

The $150 million WAWS Project was approved by the Legislature this past spring. The project will consist of pipelines running from Williston’s water treatment plant to rural communities throughout the area. Water depots will also be set up for oil industry use.

Money from industrial water sales will pay off the project while providing a long-term water system to the region.

“That Western Area Water Supply Project is going to be critical here,” Ness said.

LOOKING FOR LONG-TERM STABILITY

Rolfstad said there are two main concerns that could put the boom at risk.

Those two concerns are a sudden drop in oil prices and federal regulations on fracking.

If those fears are not realized, Rolfstad said he sees the city continuing its historic growth.

“I don’t think there’s any question in my mind that we’re going to (nearly) double our size to about 25,000,” Rolfstad said.

Koeser said the city needs to continue to move forward and not think of past failures.

“You can’t just sit back and let the fear of failure hold you back,” Koeser said.

He said drilling companies are continue to improve their techniques of extracting oil. This, coupled with the massive investments being made, are means for what he calls “cautious optimism.”

“If they continue to be as successful as they are, I think it bodes well for the industry,” Koeser said.

Bekkedahl said he sees the signs of the Williston Basin becoming an industry as well.

“I see the trend to being a lot of new large corporations coming into the area for what I’d see as a long-term stay,” Bekkedahl said.

Rolfstad said oil companies are in a chaotic early stage of development right now, securing leases throughout the region. This will likely begin to change within the next few years, he said.

“I think you’ll see more methodology to it, where they’ll fill in those areas and ship more by pipeline versus trucks,” Rolfstad said.

Boom or industry, Rolfstad said these are unprecedented times in the Williston area and western North Dakota.

“To a degree we’re making history. It’s an unconventional oil play,” Rolfstad said.

By Nick Smith
Williston Herald

That is six more rigs than the previous record earlier this year and the first time it’s gone above 180.

The industry rule of thumb holds that each drilling rig represents 120 jobs, directly and indirectly, so the total rig count indicates about 22,000 jobs in the Oil Patch.

Meanwhile, crude oil production also hit a record in May of 361,438 barrels per day, after falling back a little in April due in part to the wet spring conditions. That represents about 6.5 percent of U.S. crude oil production, another record for the state.

The May production figure, the most recent available and released by the state’s Department of Mineral Resources, shows a 21 percent increase over May 2010 daily production and a 76 percent increase over May 2009 numbers.

May production also was up from 351,244 barrels per day in April, and 360,102 in March and shows that monthly production totals are now above 11 million barrels.

The number of producing oil wells also hit a record of 5,329 in May.

“It certainly appears some additional rigs are moving in because things are starting to dry out a little bit,” Hicks said Wednesday. Some roads in the Oil Patch had to be closed because the wet conditions made them unusable this spring.

“We are seeing oil companies start to work with township boards and some counties to try to maintain certain roads,” Hicks said. “I think through those partnerships we will be able to realize better avenues to get in and out with truck traffic.”

If the production keeps increasing at the same pace it has through May, total output for 2011 will hit about 133 million barrels, up from 113 million in 2010 and 80 million in 2009 and a tripling of the 40 million produced in 2006 when the boom in the Bakken formation got under way.

“We should be easily able to attain that,” Hicks said.

North Dakota trails only Texas, Alaska and California in terms of state oil production.

Texas is at 417 million barrels, Alaska at 219 million and California at 204 million. North Dakota produced 113 million barrels in 2010.

With about 600,000 barrels a day, Alaska and California likely will hold on to the No. 2 and No. 3 spots for two or three years, Hicks said.

The nation’s top oil-producing spot isn’t a state — it’s the Gulf of Mexico at 598 million barrels.

But North Dakota is seeing more growth than any of the nation’s 31 oil-producing states or off-shore, said Richard Rathge, director of the North Dakota State Data Center in Fargo, in a news release.

“North Dakota is the only state among the largest oil-producing states to have increased (output) from 2000 to 2010,” Rathge said “For example, during that period, Alaska dropped its production by 38 percent, California 25 percent and Texas 6 percent. Meanwhile, North Dakota increased production by 242 percent. If these trends continue, North Dakota could outpace both California and Alaska within four years.”

Since annual oil output in the state dropped to a longtime low of 29 million barrels in 2003, it’s increased about 22 percent each year.

Meanwhile, nationwide oil production dropped every year but one (1991) from 1985 to 2008. U.S. oil output was up 7 percent in 2009 and 3 percent last year, according to Rathge’s report.

Last year, Mountrail County led the state’s 17 oil-producing counties with 46 million barrels, nearly 41 percent of the total; McKenzie County was second with 16 million, Dunn at 15 million, Bowman at 11 million and Williams at 10 million.

The price of crude oil has remained high, spurring the development in western North Dakota. Although the price for the traditional benchmark West Texas crude has slipped below $100 a barrel, the more recent world price maker, Brent crude taken from the North Sea, remains $20 a barrel higher. North Dakota’s sweet crude that comes from the Bakken formation typically gets discounted $8 or so per barrel from the West Texas crude price because of the higher cost of transporting it to major terminals.

By: Stephen J. Lee, Grand Forks Herald

North Dakota Gov. Jack Dalrymple touted the state’s economy during an appearance this morning on CNBC’s “Squawk Box” TV program.

Squawk Box co-anchor Becky Quick asked Dalrymple on the show to explain North Dakota’s 7 percent jump in Gross Domestic Product in 2010, which stands in stark contrast to more dire economic conditions in other states.

Dalrymple credited the state’s job creation efforts that he was involved in beginning in 2000 when he was lieutenant governor under former Gov. John Hoeven. Dalrymple said North Dakota has increased employment statewide by about 15 percent since 2000, while the nation has lost about 2 percent of its jobs during the same period.

“It’s about job creation,” Dalrymple said during his response. “The nation as a whole seems to be talking like it’s a new idea, but we’ve been working at it for years.”

Jeff Zent, communications director for the governor’s office, said Dalrymple’s cable TV appearance was just the latest in a long line of national and local stories or interviews centered on the state’s strong economic performance.

“North Dakota is in a position unlike most other states,” Zent said. “The state’s economy is outperforming most other states. That has generated quite a bit of media attention.”

The state’s booming oil activity was also highlighted on the cable program. Guest host David Gerstenhaber asked Dalrymple how the state has managed to triple its daily oil production and if the state will be able to sustain its oil production.

“The play that we have in North Dakota right now in the Bakken formation is definitely not short term,” Dalrymple responded. “It is a major new discovery, the largest reserves of oil and gas now in the United States. … Production is rising daily, and we are currently now the second largest state in land drilling behind Texas. So we think it’s a long play, and one that is going to be very significant to the United States.”

Dalrymple said that horizontal drilling and hydraulic fracturing techniques haveyielded a success rate of “about 98 percent” of new wells drilled in the Bakken, adding that “it’s really almost more like mining for oil than drilling for oil.”

When asked if labor, housing or infrastructure challenges in oil producing areas would slow the state’s rate of growth, he said he believes the state “can keep up with it.” Dalrymple mentioned the “several hundred millions of dollars” invested in western North Dakota during the most recent state legislative session as evidence.

“It’s a relatively sparsely populated area of the country,” Dalrymple said on the show. “It does have a huge impact, but our strategy is to stay ahead of the pace of development rather than slow it down.”

When asked about flooding in the state, Dalrymple mentioned the dramatic flooding experienced in parts of the state this year, including the devastation in Minot, calling it “kind of apocalyptic.”

“We will, of course, get through it, and we will move on, and it will not slow our state development down, but it’s a tremendous hardship on a lot of people,” Dalrymple said on the show.

Despite the widespread destruction and loss of economic activity from closed businesses and the suspension of this year’s state fair in Minot, Dalrymple said on the program that the natural disaster may not have that sharp of an impact on the state’s economy or GDP.

“It’s funny about disasters,” Dalrymple said. “You would think it would have a big impact on GDP, but actually, as you know, it stimulates construction and recovery spending, and when all is said and done, you know, it probably will have less impact on our state economy than you might think. But that doesn’t measure, you know, the impact on an individual community or on people’s lives, which is, you know, very serious.”

By: Ryan Schuster, Grand Forks Herald

Published July 12, 2011

> Energy Producers
The State of Energy Summit is designed to attract the marquee players in the energy arena. The event offers an almost unprecedented opportunity to share knowledge, debate topics and work to enhance the livelihood of North Dakotans everywhere.

> Supply Chain Companies
With augmented production and research comes the need for infrastructure. Attendees of the summit will grasp the potential projects and current needs of energy producers statewide. Participating in North Dakota’s energy expansion helps reinforce North Dakota’s robust economy.

> Inventors, Entrepreneurs and Small Businesses
Vendors at the Innovation Expo and Job Fair gain access to key representatives of one of the diverse energy populations in the nation. Through this concentrated exhibit, inventors, entrepreneurs and small businesses can learn about the needs of individual energy industries as well as how to enrich the communities where there is the most growth.

> Policy Makers and Elected Officials
Policy will be paramount in propelling North Dakota into the future of energy. Public officials can observe all sides of energy production and begin to understand the importance of progressive, pioneering policies.

> Human Resource Organizations
North Dakota’s success has always started with people. To become the global leader it can be, North Dakota will need to enlist the best talent from around the state, around the country and around the world.

Join us August 17 at the Ramada Plaza & Suites and Conference Center as we explore what energy means for North Dakota.

Cazalot joined Marathon Oil in March 2000. Prior to his work with Marathon, Cazalot was vice president of Texaco Inc. and president of Texaco’s worldwide production operations, a position he was appointed to in 1999. Cazalot serves on the Boards of Directors of Baker Hughes Incorporated, the American Petroleum Institute and the Greater Houston Partnership. He is also a member of the American Association of Petroleum Geologists, the Texas Governor’s Business Council and the National Petroleum Council.

“Mr. Cazalot’s expertise will be greatly beneficial in exploring the economic impact and job creation effects that the energy sector will have on North Dakota,” said Chamber President/CEO Craig Whitney. “Our Chamber is very supportive of a commitment to infrastructure in the West. Attention to this area is key to the economic vitality of the entire state.”

Marathon Oil Corporation is an integrated international energy company engaged in exploration and production, oil sands mining, integrated gas and refining, marketing and transportation.  Based in Houston, Texas, Marathon is the fourth largest United States based integrated oil company and the nation’s fifth largest refiner.

Marathon holds approximately 391,000 net acres in the Bakken Shale oil play in North Dakota and eastern Montana. Marathon’s drilling operations began in the Bakken in 2006, leading to the first production from Marathon-operated Bakken wells in August 2006. The company currently has six rigs drilling in the Williston Basin. Marathon anticipates drilling approximately 275 gross wells over the next five years with the potential to have approximately 22, 000 barrels of oil equivalent per day by 2013.

The Chamber’s State of the Energy Summit brings together energy leaders to discuss how new technologies will lead to next generation of jobs in North Dakota. U.S. Senator John Hoeven will be on hand to keynote the summit’s luncheon and discuss the global implications and economic benefits of job creation through North Dakota’s expanding energy sector.