Every day there is more bad economic news it seems, and even President Obama started campaigning for reelection a year early. But things are different in North Dakota. The only things they worry about there is whether they can hire enough people to meet the labor demand and can they build the pipeline and other infrastructure needed to turn their black gold into real gold fast enough.
Welcome to America’s domestic energy production economics lab experiment!
This science experiment in the potential for putting American technology and entrepreneurship to work in unconventional oil and gas is going well—real well. Monthly oil production is ahead of year over year levels by 23% and up 78.5% over the past two years according to the North Dakota Department of Mineral Resources. Oil production in 2011 has averaged 10.5 million barrels per month, twice the 2008 levels, and three times the rate of five years ago.
President Obama would certainly like to take credit for the growth in jobs and personal income in North Dakota. Oil related jobs more than doubled from 6,800 jobs in May 2009 to 15,200 jobs in May of 2011. North Dakota’s unemployment rate is 3.2% compared to the Us average of 9.1%.
In the first quarter of 2011, North Dakota personal income grew faster than anywhere else in the US at a 6.9% increase four times the national average of 1.8%. As the ripple effect of high employment rolls through the North Dakota economy overall state employment level reached an all-time high in May 2011 and is now 2.5% above the June 2009 level when the recession officially ended.
When that oil gets to market and taxes are paid, North Dakota’s treasury ended up with $237.5 million MORE than projected over the last two years. For May 2011 state income tax revenues beat expectations by 10.6% and sales tax revenue was up 13%.
Maybe that is why resistance to unconventional oil and gas production using horizontal drilling and hydraulic fracturing long stalled in New York State suddenly seems to be easing. Why Pennsylvania is seeing the same signs of growth from its own rationalization of policies and regulations that held back domestic energy production in the Marcellus shale and Utica Shale.
America gets it!
Domestic energy production is one of the most promising avenues for climbing out of our economic hole. Even better it uses American technology, American entrepreneurship, using American workers to harvest American energy and keep American money at home rippling through our economy.
Now that’s a stimulus program we can believe in!