North Dakota oil output drops as state falls in national crude production rankings

North Dakota's petroleum output fell 5% in July to the lowest mark in a year, while New Mexico officially passed the state as the nation's No. 2 oil producer.

"I looked at it and kind of said, 'Uff da,'" Lynn Helms, North Dakota's mineral resources director, said of July's weak performance. "We were expecting to see an increase in production in July."

Oil production in North Dakota and the rest of the United States plummeted for a time in 2020 as COVID strangled global fuel demand, but then began recovering in the year's second half as oil prices rose.

Still, in 2021, North Dakota's oil production has been lackluster compared with the relatively strong growth in New Mexico and Texas, both part of the largest and lowest-cost U.S. shale oil range, the Permian Basin.

This year, New Mexico has been challenging North Dakota's long-held second ranking to Texas.

"We are no longer No. 2," Helms acknowledged Friday in a conference call with reporters. "It's a long-term trend, not something that is a quick flash, and we are back at No. 2."

North Dakota churned out 1.08 million barrels of oil per day in July, down from 1.13 million in June, which had marked 2021's best showing, data released Friday show. "It was a fairly significant drop," Helms said.

The state's natural gas production fell 4% from 2.99 million MCF per day in June to 2.87 million in July. An MCF is 1,000 cubic feet of natural gas.

North Dakota has 27 oil drilling rigs in operation, up from 23 in July. The drill rig count is an indicator of new production. But to underscore New Mexico's oil surge, Helms said that state has 82 drilling rigs operating.

Natural gas flaring — a negative — rose in North Dakota in July to 10% of all gas produced, higher than the state's goal of 9%. When excess gas is burned off or flared, resources are wasted and carbon dioxide is emitted into the atmosphere.

North Dakota officials said flaring increased beyond state standards largely because several natural gas processing operations were down for maintenance in July.