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North Dakota: Legendary. Follow the trail of legends

How Petroleum and Natural Gas Production Affect the People of North Dakota

Bakken Pumpjack Aerial
Bakken Pumpjack Aerial: An aerial view of a pumpjack in Western North Dakota. Photo courtesy of Marathon Oil.
  • The biggest source of energy in the United States is petroleum, which accounts for 37.8 percent of U.S. energy usage.
    • North Dakota is the second leading oil-producing state in the nation, producing 12 percent of all U.S. oil.
    • North Dakota reached the milestone of 1 million barrels per day in June 2014.
    • Texas and North Dakota are the only states to produce more than 1 million barrels of oil per day.
photo of multiple well pads
Multiple Well Pads: North Dakota Department of Mineral Resources has developers plan well sites along a corridor to disturb as little land as possible. See a stretch of well pads off a single road in this aerial shot. Photo courtesy of Vern Whitten Photography.
  • A typical Bakken well drilled today may produce for 44 years.
    • During that time, it could generate about $20 million net profit; pay approximately $5,339,000 in taxes; and pay $7,845,000 to the mineral owners.
  • North Dakotans benefit in many ways from oil and gas production in the state.
    • Homes, schools, and businesses are heated with natural gas.
    • North Dakotans use petroleum-based products in all phases of everyday life.
    • Each barrel (42 gallons) of petroleum can make about 19 ½ gallons of gasoline.
    • Over half of the remaining petroleum is used to make other products.
Mandan Refinery: Mandan’s refinery began operations in 1954. This two-minute video clip describes how the Bakken oil boom affected refinery operations. Video courtesy of Tesoro Corporation.
  • Because of the oil and gas industry, the economy of North Dakota is booming.
    • North Dakota has the fastest growing economy of any state in the United States.
      • The economy of North Dakota increased at five times the national average in 2012.
      • One million barrels of oil produced per day will add $50 million per day to the economy of North Dakota.
        • One million barrels per day will add more than $11 million per day in taxes to North Dakota’s treasury.
      • Many states are deeply in debt; however, the state of North Dakota has a one billion dollar ($1,000,000,000) budget surplus.
        • Tax revenue from oil and gas production and oil extraction totaled $1.66 billion ($1,660,000,000).
        • Money in the state Legacy Fund totaled $1.77 billion ($1,770,000,000) as of March 2014. Certain restrictions limit the spending of these funds.
Mandan Refinery
Mandan Refinery: More than 350 people are employed by Tesoro in the Bismarck-Mandan area and western North Dakota. Photo courtesy of Tesoro Corporation.
  • The oil and gas industry has funneled millions of dollars into local economies.
    • Hundreds of new businesses have opened to support the oil industry and its workers. Existing businesses have expanded.
    • Tesoro Corporation has estimated that the Tesoro Refinery in Mandan generates $22 million each year in wages and property taxes.
    • The population of North Dakota has reached a record high of over 700,000.
  • The oil and gas industry in North Dakota provides employment for thousands of people.
    • The energy boom has attracted workers from all over the country.
      • The unemployment rate in North Dakota is the lowest in the nation at 2.6 percent, compared with the U.S. average of 6.3 percent (April, 2014).
    • About 55,000 people work in the oil fields of western North Dakota.
      • North Dakota’s 17 oil and gas producing counties account for almost one-third of all the job openings in the state.
      • Each drilling rig creates approximately 120 direct and indirect jobs.
      • Wages are higher in parts of North Dakota than in most other states.
Rig WCSCrossroads
   
 
  • North Dakota’s oil and gas boom also brings challenges.
    • Because of all the workers moving to western North Dakota, there are housing shortages.
      • Some of the workers are living in campers and other temporary housing.
    • Water supplies, sewage systems, and government services are being strained in oil patch regions.
    • There is a shortage of hospitals and doctors because the population has increased.
    • Prices have gone up on rent, products, and services.
      • Many businesses are having difficulty finding enough workers because of the low unemployment rate.
Rig Floor Operators
Rig Floor Operators: Rig floor operators (also known as roustabouts) handle operations on a drilling rig. Photo courtesy of Whiting Petroleum.
  • In spite of the challenges, the oil boom has opened up career opportunities for young people in North Dakota.
    • By the year 2020, the state could see a peak of 65,000 well-paying jobs related to the oil and gas industry.
      • The oil and gas industry offers a higher average industry wage at every level, compared with all other industries.
      • Energy courses and training programs are offered at several North Dakota colleges and universities including those at Bismarck, Minot, Fort Yates, Devils Lake, Wahpeton, Fargo, Grand Forks, and Williston.
      • Drilling new oil wells, building pipelines, constructing housing, and creating more businesses will continue to bring opportunities to the people of North Dakota far into the future.