ADVANCING THE POSSIBILITIES
A Leader in Energy Security
The oil and natural gas found right here in North Dakota is getting us closer to energy independence, allowing the U.S. to lessen dependence on foreign energy sources. North Dakota produces on average about 1.12 million barrels of oil per day in 2021, making it the number three oil producer in the U.S. behind only Texas and New Mexico.
North Dakota’s rise as a leader in oil production has helped the country as a whole become the world’s No. 1 producer in both oil and natural gas, strengthening the nation’s energy security. In fact, for the first time since at least 1949, the U.S. became a net exporter. In 2020, annual petroleum net imports were actually negative (at -0.65 MMb/d), the first time this occurred since at least 1949.
Energy security also allows an additional $400 billion to stay in the U.S. economy each year.
North Dakota Production at a Glance
BARRELS PER DAY PRODUCED
MCF OF GAS PER DAY
LARGEST U.S. PRODUCER
How does North Dakota’s production compare on a global scale?
Nearly 100 countries in the world produce oil, but in 2020, five countries accounted for about 50% of the world’s total crude oil production.
Through 2020, the United States was the world’s largest oil producer, and Texas alone would rank as the fourth largest producer in the world while North Dakota ranked in the top 20 world producers.
This graph shows just how important North Dakota is to our nation’s energy security.
2020 CRUDE OIL PRODUCTION
(including lease condensate)
|Ranking||Country||Barrels Per Day|
|7||United Arab Emirates||3,138,223|
|Ranking||Country||Barrels Per Day|
Frequently Asked Questions About the Current Energy Crisis
What’s going on with gas prices?
The short of it: There are several factors that impact the price of gasoline at the pump, including the grade of oil produced (light, sweet vs heavy, sour); transportation costs; refining costs; distribution and marketing; and, taxes. Ultimately, the largest of those factors is global supply and demand of crude oil. Crude oil is a commodity that is traded on a global scale, and events, weather, politics, and economics in nations throughout the world can all have an impact on the price of crude produced right here at home. That is the largest factor driving the price of crude oil up, which, in turn, increases the cost of gasoline prices at the pump.
How does U.S. oil production help global oil prices?
The short of it: U.S. oil production can help overall crude prices by adding more supply to the global market to meet the demand. We’ve seen the result of that over the past decade when technology and innovation helped unlock vast resources of crude oil. The U.S. went from being a net importer of oil, often relying on countries for crude oil, to being a net exporter. By 2018, the U.S. had become the largest oil and natural gas producer in the nation, helping increase our energy security and that of our allies. This past year, however, federal restrictions, decreased demand, and poor economics forced U.S. producers to reduce their output and it can take time to ramp up production.
Why aren’t U.S. producers increasing production then?
U.S. oil production is undertaken primarily by companies that are under obligation and pressure to operate within budgets that are set at least a year in advance and meet the objectives of investors and shareholders, which includes hundreds of thousands of Americans (i.e. almost anyone who has a 401k or other investment accounts). If a company can’t meet its financial obligations, it ultimately could go out of business.
There are also several other factors that influence when, where, and how a company can develop our petroleum resources. Exploration and development is an expensive process that requires a large amount of investment, and they must often rely on capital from banks and other investors. Regulations also play a large part in oil and gas development. Federal and state regulations can hinder or even prohibit oil and gas development, making it even more expensive or impossible to develop resources. Even one drilling rig and well requires hundreds of trained and qualified workers. All factors add to the amount of time, planning, and training needed to ramp up activity. And finally, oil producers need infrastructure to get their products to market.
What will it take for the U.S. to ramp up its production again?
The short of it: In one word: Certainty. Oil and gas development is a complex process and requires many things for a company to increase production, but they all have one thing in common, and that is certainty.
Anyone who is going to invest in a large undertaking, whether they are building a house, or deciding to drill an oil will want and crave certainty. They need to be certain they have the money or investment to pay for that undertaking. They want certainty that the permitting will come through, and they need certainty that they will have the workforce to complete the task. In turn, workers will want to be sure that they will have a job in the long term to provide for their families, pay their bills and pay for their education or training.
Can North Dakota really make a difference?
The short of it: North Dakota is the country’s third-largest oil-producing state in the nation behind only Texas and New Mexico. In 2021, North Dakota produced on average 1.12 million barrels of oil and 2.9 billion cubic feet of natural gas per day. Compared on an international level, North Dakota ranks in the Top 20 oil producers in the world. With a sound regulatory framework, investment, and infrastructure, increased production from North Dakota and other U.S. states could help replace oil from OPEC countries, enhancing energy security for the U.S. and its allies.