Oil Production is Down in North Dakota
With room for improvement, the state has not received federal leases since 2016
BISMARCK, N.D. (KVRR) – As gas prices continue to rise, oil production has steadily decreased in the state of North Dakota and the United States.
With the Biden administration’s ban on drilling permits and hydraulic fracturing on federal lands, North Dakota could miss out on at least $570 million over the next 15 years. That’s according to the state’s Department of Mineral Resources.
“A little troubling that our U.S. producers are finding it so difficult to ramp up production when you see 90 or 100 dollar oil. But, the finance years and the investors are saying no, this is a short-term problem. We’re thinking long-term and long-term this administration doesn’t want your business and the workforce is not really there to push it much higher in the short term,” Director of the North Dakota Department of Mineral Resources Lynn Helms said.
Half of the royalties on federal land typically goes to the state while the other half goes to the county where oil is produced.
“We haven’t added any federal producing leases since 2016. For the U.S. in total, it’s the lowest number in producing leases since 2010,” Helms said.
He adds the COVID-19 pandemic played a major effect in the shift of less production and says you can expect drilling activity to increase slowly, but the Biden administration has full control if drilling is allowed on public land.
“We’re not just not leasing, but we’re not permitting wells either on public lands. So, that’s consistent with the strategy I guess or the attitude of the current administration,” says Helms.
In his first day in office, Biden banned drilling on public lands saying our country has waited too long to deal with its climate crisis. Helms also implies the federal government is missing a big opportunity by blocking off areas that are ready for drilling.
“Total, we’re talking about 1,100 wells, just under 1,100 wells from being drilled. Some of those are incredibly productive areas like under the vanwood yard where there’s two entire sections that are nominated, they’ve been cleared by the U.S. Army of Engineers and they’re ready for leasing. That would provide an immediate target for our gas operators,” Helms said.
The Energy Information Administration projects oil production in the U.S. will rise significantly with a forecast increasing up to 630,000 barrels per day to average 12.6 million barrels per day.