Currently viewing the category: "NATURAL GAS"

First, be sure to look at the report below this one. It was also just posted and covers the city sales taxes for July as well as the First Quarter 2014 state sales taxes.

As for this report, it is the most recent report about North Dakota oil and gas production. Another million barrels a day report. Even a little better than when North Dakota finally broke through that milestone last month. With more and more wells being completed we can expect that figure to continue increasing. Of course as more and more wells move into that post twenty month age that will lead to a daily decline, but we should have enough wells by then to stay in that category for many years for now.

Now the next interesting thing is what will happen to the natural gas production. We should see that become a major business in the state.

At this point it is just watching the market maturing.

 

.

First, this is the third post I have made to the website today. Below this you will find a posting on U.S./Canadian border crossings, and below that a posting on the city sales taxes in selected North Dakota cities.

NOW, after that terrible winter, after all those announcements from those who couldn’t wait for the fact to occur before they reported it, now it has happened. North Dakota, in April averaged producing over one million barrels of oil per day. Only three other states have ever done that, Texas, California, and Alaska.
Today it is only North Dakota and Texas.

Right now the production in Texas is significantly greater than in North Dakota. Some think that North Dakota can eventually pass Texas in total production. That will take a lot. In 2013 Texas produced in excess of two and one-half million barrels a day.

In the meantime, we will not worry about who is first. Instead, we need to make sure North Dakota production continues to drill new wells on a business like basis, and most importantly that the United States continues to apply new technology in all the oil patches for the good of our economy and for the safety of our armed service members who then will not have to go in places we are not wanted. Let those places sell those barrels to others, or even shut their wells off.

 

Close but no gold ring yet. Some of the press are putting out stories about reaching the million barrel mark, and realizing it is just a number, that it doesn’t make that much difference really, but the reality is North Dakota still isn’t there.

Why? Hard to say for sure without a valid review, but really, that review isn’t worth the cost. In all likelihood it is simply given the continuing weather problems it hasn’t been worth the cost of making that mark. Now, if this was WW II and we needed that oil for the war we would be there and well beyond. Today, however, it simply as I said, not worth the cost, not worth the effort in terms of the economic costs, and probably the human costs. Oil drilling is dangerous enough, but it is not worth the chance of serious injury, or even death to reach a particular number.

Anyway, we are nearly there and probably will be next month unless this weather is still with us. As the data from the other oil patches shows, the Bakken continues to be America’s largest oil field. It will continue to be the largest unless there is some human interference.

Those who want to celebrate can probably do so soon. Very soon. We will see next month.

By the way, I have added the gas flaring information so we can watch that continuing reduction

 

According to Kyle C. Wanner the director of the N.D. Aeronautics Commission North Dakota airline passenger numbers for April 2014 were 94,720, or an increase of nearly 14 per cent over April 2013. Five of the commercial airports had their best numbers on record this April.

Dickinson continued to be the biggest gainer as the oil patch activity continued moving south. Of course Williston “slowed” to just short of a 30 per cent increase.

Williston and Dickinson are important to follow as their increase demonstrates that the oil increase is still occurring. It and agriculture remain the two important cornerstones of North Dakota’s economy.

To me the interesting comparisons is looking at Fargo with its nearly 23 per cent for April and nearly 14 per cent for the year and comparing that to what is happening in Grand Forks. Minot and Bismarck are more complicated because of the oil expansion and Minot’s rebuilding from flooding.

The real comparison is between Grand Forks and Fargo. For the year the increase is less than 2 per cent for Grand Forks. As I noted above, it is nearly 14 per cent in Fargo. Why such a difference?

We know that Fargo has been growing. We also knew that Grand Forks had started to grow, and while I expected Fargo to continue its larger growth I didn’t expect that kind of difference. I think if Grand Forks does not want be left behind it is important for them to take a serious look at their economy and see what is driving it, or what is not driving it. What can Grand Forks do to increase its economy?

Given what is happening in North Dakota, Grand Forks is not in a position to allow those kinds of differences without looking for the whys. It is time for a serious review of the city’s economy, otherwise it may be the least important “big” town in the state.

The Chamber of Commerce, or the the local and state economic development organizations all look good in a booming economy. On the other hand, when the economy looks like it does in North Dakota on the one hand, and as it does in Grand Forks on the other, well it is time to prove your worth.

 

Another month and another opportunity to see how fortunate North Dakota has been for these past few years, and how far off they are in the projections of revenues they have purchased.

First of all, concerning the revenues, even after some very large tax cuts put in place by the last legislative session and signed by the Governor, revenues are up by nearly 21 % compared to the same time as the last biennium.

Now that is just over 7 % of the projected amounts. Compared to what we thought we purchased some will say that is pretty good, at least compared to previous projections. However, as always, the devil is in the details, and I don’t think that is so good.

Sales taxes are off by less than 4 % and that is not bad. Auto purchases, or the revenues from them are off by less than 11 % and that isn’t bad either.

The other big categories are corporate and individual income taxes and they are off about 37 % and 42 %. That is, the revenues from these taxes are that much more than expected and yet the total revenue is only up about 7 %. That means that without those large amounts of extra revenue we would be in a deficit situation and that would be a critical situation, a very critical deficit situation. If the economy slows down with three fourths of the biennium left North Dakota will need its reserve revenues and the psychological effects of that will be very difficult on its economy.

I do not want to be the boy who cried wolf, but I think this proves again the critical need to get a better economic projection. We are, I think, living off our good fortune. We can not continue doing this, or so I think.