Wells in the remote US state of North Dakota have hit new record highs in oil and gas production.
The North Dakota Industrial Commission gushed over pumping a record 793,000 barrels of oil in April 2013 – up 1.3% from the month before – while natural gas production was up 1.7% to nearly 840,000 cubic feet a day.
Oil production is expected to keeping rising as new wells are drilled, with almost 500 awaiting completion and the all-clear to start pumping.
The commission warned gas exploration is still not economic in the state, although prices are low, so is storage capacity.
Most of the drilling is in the Bakken and Three Forks fields.
Bad weather has hampered exploration and production. North Dakota was blitzed by heavy snow that blocked main roads until the end of April, while May was the wettest month recorded in the state.
The US government is hanging high economic hopes on the Bakken fields, with predictions that output will surge to 10 million barrels of oil a day from 2020 until 2040.
However, some prospecting firms are lagging because they feel federal tax and fracking policies need clarification before they can commit millions of dollars to drilling exploratory wells.
“The federal budget proposes to stop oil and gas corporations setting off intangible drilling expenses and depletion allowances, which is causing some concern,” said a commission spokesman.
Meanwhile, market experts are warning the boom in shale oil Stateside still leaves America vulnerable to disruption in supplies from Saudi Arabia.
Amy Myers Jaffe, executive director for energy and sustainability at the University of California, explained shale oil had shifted the balance in the market away from the Saudis; however the extent of their reserves still left them as a major supplier.
Whereas the Saudis could take up the slack if a neighbouring supplier reduced supplies, no other oil exporting country could step in if the Middle East kingdom had to turn off the tap.
“Saudi Arabia may have problems with competing on price, given the US has a local supply and the fewer miles Americans are driving due to financial problems and a changing lifestyle,” she said.
“We should also keep in mind disruption may happen. Several North African and Middle Eastern countries have already seen uprisings over official corruption, oppression and unemployment. It would be wrong to think this could not happen in Saudi Arabia at some point.”
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