I Hope Its a Calculation Error
Most of us who spend a lot of professional time analyzing projections and forecasts are used to poking holes to bring them down to earth. I hope that’s the case here and I’m just missing something obvious. I’ve been following the oil boom in North Dakota since 2008 and despite the hyperbolic headlines lately, had assumed that the state of North Dakota would slowly overtake each of the top oil-producing states over the next decade if its oil production kept rising and those same states didn’t drill more new wells. But, according to Mark J. Perry, a professor of economics and finance in the School of Management at the Flint campus of the University of Michigan and visiting scholar at the American Enterprise Institute that’s going to happen a lot sooner than any predictions I’ve read lately:
At North Dakota’s blazing current pace of monthly increases in oil production, the state will be producing more than 560,000 barrels of oil per day by January 2012 and will then pass #3 California (540,000 barrels per day) and #2 Alaska (550,000 barrels per day) to become America’s second-largest oil producer. North Dakota Department of Mineral Resources Director Lynn Helms is even more optimistic and predicts that the Peace Garden State could actually be producing as much as 800,000 barrels per day by the end of this year!
I’m used to oil producers being on the high side of optimistic about production forecasts, but this quote is from a state employee. I keep waiting for the black cloud in the silver lining and, so far, it doesn’t seem to be happening. Hat tip to the Bakken Blog for the consistent tips.