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3/18/2013



Rail News: Rail Industry Trends

EIA: North Dakota set crude oil production record in December


Crude oil production in North Dakota averaged an all-time high of 770,000 barrels per day in December, according to the U.S. Energy Information Administration (EIA).

Total annual production more than doubled between 2010 and 2012 via horizontal drilling and hydraulic fracturing operations in the Bakken Formation's Williston Basin, the EIA reported. North Dakota production in 2012 trailed only Texas and the U.S. federal offshore region, and accounted for 10 percent of the nation's total crude oil production.

Most crude oil produced in North Dakota is gathered and transported by truck to rail cars leaving the state. In the four counties where production is concentrated — Dunn, McKenzie, Montrail, and William counties — about 75 percent of produced oil is transported by truck, causing supply chain problems at times, EIA officials said in a report.

"Severe weather can impede truck travel, which may lower oil production in the state," they said. "Once on-site storage tanks at production sites are full, production stops until the trucks can move again."

Because more than 80 percent of North Dakota's wells are located in only four counties in the northwest area of the state, harsh weather in the areas can reduce the state's total crude oil production, as happened in November 2012 and again in January 2013, EIA officials said.


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