High oil prices spark North Dakota crude output — and motorists' fuel bills

North Dakota's oil production rose decently in March. Gasoline prices in Minnesota recently crossed the $4 barrier.

May 13, 2022 at 9:37PM
High energy prices, leading to Minnesota gasoline prices of more than $4 a gallon, also led to higher oil and gas production in North Dakota, according to state officials. (Greg Gilbert, TNS/The Minnesota Star Tribune)

North Dakota's oil and gas production climbed in March, sparked by high energy prices that are a boon to the state's tax coffers.

But those same high oil prices are keeping U.S. gasoline prices historically high. In Minnesota, gasoline prices Friday were at $4.10 a gallon, according to AAA.

While that's not a record, average gas prices in Minnesota recently climbed above $4 a gallon for the first time since 2013, according to GasBuddy, a fuel price tracker. And unlike 2013's brief spike, this spell of $4-plus prices started a week ago and could last.

"Gas prices are at record highs, and there is little to no relief in sight," Lynn Helms, North Dakota's state minerals director, told reporters in a web conference Friday. "The high crude oil prices are sustaining high gasoline prices."

West Texas Intermediate — the benchmark U.S. crude price — hovered around $110 a barrel Friday, up from about $77 at the beginning of 2022. Oil prices in March and now are nearly 110% higher than prices in North Dakota's tax revenue forecast.

High petroleum prices have not spurred a drilling frenzy, though. Burned before by such behavior, oil companies are being financially disciplined — and reaping big profits.

Still, oil and gas production is rising, primarily in Texas and New Mexico, and to a lesser extent in North Dakota. The state churned out 1.12 million barrels of oil a day in March, up 2.8 % from February, data released Friday shows. Natural gas production rose 4.6 % during the same time.

"March was a very good month," Helms said.

The number of drilling rigs — harbingers of future production — currently stands at 40, up from 34 and 38 in March and April respectively. The rig count last hit 40 in April 2020 before falling precipitously as COVID-19 upended the economy.

Helms said he expects continued production gains, but April's output data, due out next month, will be ugly. Two April blizzards within a week knocked out power to the oil fields.

At one point, daily oil output fell from around 1.1 million barrels to 300,000 barrels, and many producers took well over a week to return to full production, Helms said. Even now, about 10 % of producing wells remain offline because of residual storm issues.

about the writer

about the writer

Mike Hughlett

Reporter

Mike Hughlett covers energy and other topics for the Minnesota Star Tribune, where he has worked since 2010. Before that he was a reporter at newspapers in Chicago, St. Paul, New Orleans and Duluth.

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