North Dakota’s growing prosperity continues to be on full display for the world this month. As we wrote previously, the state’s freedom to drill for oil has made it the 2nd largest producer of oil in the U.S. Recently, a North Dakota oil official publicly predicted that the state could come close to doubling current oil production to 1 million barrels per day by 2015. This would be an enormous achievement considering in 2003 production was just under 30 million barrels of crude oil for the entire year. This represents a 12-fold increase in just over a decade.
This year there are more North Dakotans than there have ever been, and with a 3% unemployment rate and a year-on-year job increase of 7.2%, almost all are working. The state is forecast to experience a 60% rise in population in the coming years as service and manufacturing industries build up around the over 200 rigs drilling now and slated to continue drilling for over 16 years. If producers are left free, there is no reason to believe this success will not continue.
Last week the biggest ever Williston Basin Petroleum Conference was held with attendees from nine countries, 47 states and nine provinces eager to learn from North Dakota’s success. Some exhibitors and presenters indicated that the state may not be as free to develop as it has been in the past. Attendees were warned that the threats offered by those opposed to the oil industry, especially hydraulic fracturing, should be taken seriously. Other looming infringements on the rights and productivity of North Dakotans are the proposed federal tax changes that would specifically discriminate against the industry, long delays from federal permitting regulations, and the Environment Protection Agency’s recent efforts to usurp state regulatory agencies jurisdictions and expand its powers over the hydraulic fracturing industry.
The cause of North Dakota’s abundance was the rights of mineral holders to lease their properties to people willing to risk money on innovations in oil producing technology. When outside forces threaten to suppress these relationships it may be time to re-think our energy policy. As American Petroleum Institute (API) president and CEO, Jack Gerard, said this week, “We can have more North Dakotas. We can have more opportunities if we have the political will.”
I’ll rephrase that as the “The political will to leave them free.”