This winter as I watched the weather channel from my comfortable, relatively warm home in Houston, Texas, I was dazzled by the bright-white wonderlands being created elsewhere in the US. I was a little jealous at first. But as I watched the news unfold, I began to see how the pretty photos of snow my friends were posting from Virginia differed from the blizzards occurring in the Midwest.
Sure, every winter is frigid in some northern US cities like Williston, N.D. – the heart of the Bakken oil boom. But it got a little bit worse this year, according to the US Energy Information Administration (EIA).
The EIA reported in its March 11 Short-Term Energy Outlook that colder weather experienced from October 2013 to February 2014, particularly east of the Rocky Mountains, put a strain on the consumption and prices for fuels used for space heating. It also reported that it was significantly colder in states such as North Dakota. It was colder, in fact, than “both last year and the average for the past 10 years,” according to writer David Shaffer in his Feb. 14 Minneapolis Star Tribune article, “N.D. oil output drops due to cold weather in December.”
Oil and gas companies took a big hit on their bottom lines as they shelled out the extra cash to keep their crews warm and fed (you have to consume many extra calories to stay warm in below-freezing places like Williston in the winter). Production declined substantially while the crews were forced to wait out the worst of the winter storms in areas heated by the expensive fuel.
Shaffer reported that the “snow, high winds, and extreme cold” ultimately caused a 5.5% drop in output for North Dakota oil in December. This unfortunately slowed the state’s “march toward the symbolic benchmark of 1MMb/d,” he wrote.
As of press time, production in the Bakken reservoir had not yet achieved the million-barrel-a-day goal. But with a record-high production rate topping 900,000 b/d recorded in August 2013, it’s only a matter of time.
Spring will soon scatter the snow and ice into the annals of weather history, and the oil and gas companies working in the Bakken play will have a better shot at reaching the 1 MMb/d milestone. It will be quite an achievement for a play that wasn’t even really on the map 10 years ago. It certainly makes weathering these ice storms worth the effort.
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