North Dakota Oil news – February 2, 2012

Latest news for North Dakota oil:

A NPR report says that the bottle-neck in Canadian and North Dakota oil has caused “helped lower U.S. gasoline prices”, although the report also says that the lower oil and gas prices haven”t touched California , New York and the midwest. The AAA reports that Cheyenne, Wyoming has some of the least expensive gasoline in United States.

Apparently you would have to be in the midst of the Rocky Mountains to get the deal on cheap gasoline, such as Casper, Wyoming, a city with around 56,000 people. The average cost of gas is $1 less than the price that east and west coast cities are paying.

So why is gasoline so cheap for these cities?
The Canadian tar sands and North Dakota”s oil from the Bakken are flooding into the Rockies and unable to leave because the pipeline capacities are unable to drain it out fast enough and level out the oil to the rest of the country. According to the Michael Green of the AAA, the pipelines were typically built to only run oil from the east and west coasts and not in reverse. “You have all of these supplies that are building up as well, and they”re trapped in the region”.

The result of this is Oil companies and oil refineries that are profiting from great deals on crude oil and can process and sell it at the pump at a lower rate.

“There”s pipeline construction going on all over the place trying to get that crude moved out of North Dakota” said  Jim Ritterbusch, president of Ritterbusch and Associates in Galena, Illinois.

There are many proposed pipeline projects, such as the Keystone XL pipeline which would carry both Canadian and North Dakota oil to the Gulf Coast for refining and have a big impact on the US oil supplies.

In the last 6 years North Dakota has went from the 9th to the 2nd oil producing state, only trailing Texas. At this point North Dakota oil makes up 12% of oil production compared to 1% 5 years ago.

Fracing and direction drilling technologies have been at the tip of the growth of North Dakota”s oil and gas reserves, allowing unprecedented extraction from wells that once would have produced a fraction of the oil they now can. To help boost the development of oil and gas in North Dakota, there is rising pressure on the pricing of oil and natural gas which is causing large growth spurts in employment and projects. Towns and cities once scraping by are now filled with open jobs and housing problems from over-population. Other factors do have an impact that are not within our control though, such as the refinery fire in California last year or upset in the middle east, also cause the prices to rise swiftly and dramatically.

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