Montana News

Bakken Oil play five times larger than 1980's boom

Posted: Jan 22, 2013 8:45 AM by Jay Kohn - MTN News
Updated: Jan 22, 2013 8:45 AM

BILLINGS - Congress is likely to take a serious look at expanding U.S. natural gas exports this year, focusing on the issue of exports of Liquefied Natural Gas (LNG).

President Obama wants to harness the domestic oil and gas boom to turn U.S. into a major exporter.

The U.S. Chamber of Commerce is pushing the White House to expand LNG exports, feeling exports would provide a nice shot in the arm for the U.S. economy.

But some chemical and other major manufacturing companies urge caution. They believe a significant increase in exports will increase natural gas prices on consumers and industry.

A new report out this month from the Federal Reserve Bank of Minneapolis indicates that the Bakken oil boom is now five times larger than the area's oil boom of the 1980's.

That same report offers some interesting statistics coming out of the Bakken. Oil production from the Bakken increased 16 % from May thru October of 2012, while the Bakken area now accounts for 11 % of total U.S. oil production.

Meanwhile, the unemployment rate for the Bakken region has now dipped to just 1.8%, down from 2% last April, and as for the number of drilling rigs currently working the Bakken, as of last Friday North Dakota's count was at 185. In Montana the number of rigs last week was at 18.

One area where economic activity appears to have leveled off since June, is online job postings in the Bakken. While there are still plenty of online job postings, the rate of increase has slowed.

As one economist put it - "It's letting companies catch their breath."