BISMARCK, N.D. (AP) — North Dakota’s oil production may peak within five years as companies finish drilling the most prolific portions of the state’s oil patch, state and industry officials told lawmakers Tuesday.
Mineral Resources Director Lynn Helms, the state’s top oil regulator, said about 20% of drilling activity is now outside of the “core” areas of the western North Dakota’s oil producing region.
“The end of (core area-drilling) is on the horizon; we can see it from here,” Helms told the Legislature’s interim Government Finance Committee.
Though a typical well can have a lifespan of about three decades, the amount of oil that comes from it decreases by about half in the first two years, officials say.
Helms said the outlook now is for oil production to “plateau” for about a dozen years after a peak, then slowly decline by the end of the century to 1980 and 1990 levels of less than 150,000 barrels daily.
The state is producing a near-record average of 1.5 million barrels of oil each day. In interviews, Helms and North Dakota Petroleum Council President Ron Ness estimated production would peak at about 1.8 million barrels daily if prices hold.
Ness and Helms said technology to enhance oil recovery could help stem some production losses over time.
Oil is a key contributor to the wealth of North Dakota, the No. 2 producer in the U.S. behind Texas. North Dakota’s oil production has exploded in the past decade with improved horizontal drilling techniques into the Bakken shale and the Three Forks formation below it.
The state’s fortunes from oil have seesawed for almost 70 years. The state’s first boom began in the late 1970s and it went bust a few years later.
Just three years ago, lawmakers raided state savings, and enacted other…
Source: FuelFix
