A shortage of workers has contributed to a significant crude oil production slowdown in North Dakota, the second-largest U.S. oil hub behind only Texas.
The labor shortage has caused oil output to become “flat as a pancake,” North Dakota State Mineral Resources Director Lynn Helms told The Bismarck Tribune. Energy companies have struggled to find workers needed to do the laborious work — injecting water, sand and chemicals into wells to extract oil — associated with fracking.
“Most of these folks went to Texas where activity was still significantly higher than it was here, where they didn’t have winter and where there were jobs in their industry,” Helms said, according to the Tribune. “It’s going to take higher pay and housing incentives and that sort of thing to get them here.”
There were eight crews statewide working on fracking oil from North Dakota wells, Helms told the Tribune. However, at least 20 crews would be necessary to keep up with the current oil production demand, he added. (RELATED: ‘A Good Sign’: Fewer People File For Unemployment In States Cutting Federal Bonus, Data Shows)
While the state’s economy has recovered from the pandemic-induced downturn, North Dakota’s oil output only increased slightly in May, recent data show, according to the Tribune. North Dakota production increased by 4,000 additional barrels per day in the state, a minor uptick compared to the 1.13 million barrels produced per day.
North Dakota was responsible for 10.4% of all oil produced in the U.S. last year, the second-most among all states, according to the Energy Information Administration (EIA). Texas produces 43% of the U.S. oil reserves.
In addition, the U.S. was the largest oil producer in the world last year, accounting for 15% of the world’s supply, the EIA said.
The oil and natural gas industry is a major driver of economic activity in North Dakota, two recently published studies found. The industry produced $40 billion in gross business volume, created 60,000 jobs and resulted in $3.8 billion in tax revenues in 2019, the most recent year where such data was available.
“These studies underscore the critical importance of the oil and gas industry to our state’s budget, economy and communities, as well as the need for state and federal policies that encourage responsible development of our abundant mineral resources,” North Dakota Lt. Gov. Brent Sanford told reporters in March.
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