N.D. oil output drops due to cold weather in December

  • Article by: DAVID SHAFFER , Star Tribune
  • Updated: February 14, 2014 - 8:51 PM
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North Dakota saw oil production fall last month, missing expectations to reach a milestone of 1 million barrels of daily production. File photo of an oil drilling rig near Watford City, N.D.

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North Dakota oil output dropped 5.5 percent in December as severe winter weather made it hard to work at wellheads, slowing the state’s march toward the symbolic benchmark of 1 million barrels per day.

Lynn Helms, director of the state Department of Mineral Resources, said output was 923,227 barrels per day (bpd), down from November’s 976,453 bpd. Natural gas output also dropped, and the amount of gas flared, 36 percent, tied for the record high.

“It was one Alberta clipper after another,” Helms said in his monthly “Director’s Cut’’ report on the state of North Dakota’s oil industry.

Oil industry officials believe it’s inevitable that North Dakota soon will surpass 1 million bpd. Helms said he expects the state to pass the milestone in the first quarter of 2014.

In the United States, only two other places, Texas and the separately counted Gulf of Mexico, exceed 1 million bpd in output. The combined output of western North Dakota and eastern Montana exceeded 1 million barrels bpd late last year.

Helms said snow, high winds and extreme cold all hindered oil production crews. He said it is impossible to inject hydraulic fracturing fluids when the temperatures hit 20 to 30 below, as happened in December several times.

It was the first decline in North Dakota output since January 2013. The latest slowdown has created a bigger backlog of wells that are drilled, but need to undergo hydraulic fracturing using water, chemicals and sand, he said. That means there likely will be a spurt of new oil production this spring as fracking crews catch up, he added.

U.S. oil consumption is expected to be 18.91 million barrels per day in 2014, according to a new U.S. Energy Information Administration estimate. At that rate, North Dakota should supply about 5 percent of the nation’s oil this year.

Crane Energy, in a recent production forecast, projected that North Dakota oil output will increase to 1.32 million barrels per day by 2027, and then begin to decline.

David Shaffer • 612-673-7090 • @ShafferStrib

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