A gas flare lights up the countryside in North Dakota.Nathan VanderKlippe For The Globe and Mail
North Dakota is an oil hot spot. Its production has climbed every year since 2003, with annual output growing by five times between 2003 and 2011. If optimists are right, it will be a huge help in the United States' dream of shunning foreign oil. But this growth put enormous pressure on the continent's pipeline network.
Scott Saxberg, Crescent Point Energy Corp.'s chief executive, thinks North Dakota's prospects are overblown – a scenario which, if correct, will ease the pipeline conundrum.
"A lot of the growth projections are overstated in the U.S., in North Dakota in particular," he said in an interview Wednesday. "You'll see change of slope of the growth of North Dakota over the next years that won't, obviously, be as great as the previous years when it was sort of the gold rush era."
North Dakota publishes monthly production statistics, and the numbers support his prediction. North Dakota's daily oil production in February was 39 per cent higher than in February 2012. By comparison, daily production in February 2012 was 60 per cent higher than the same month in 2011.
Growth, Mr. Saxberg said, is waning because companies no longer have to drill to secure land tenures. Further, the land is now held by big oil and gas companies rather than smaller outfits or private equity.
"We're past the gold rush stage," he said. Crescent Point holds leases in North Dakota, Saskatchewan, Alberta, Manitoba, and Utah. It is best known for its work in Saskatchewan.
It is too early to tell is Mr. Saxberg is right. If he is, North America's pipeline congestion problem could ease – and the dream of energy independence in the United States will lose momentum.
(Carrie Tait is a Globe and Mail Energy Reporter.)
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