Letter From North Dakota: The Oil Party Rocks On
WILLISTON, N.D., Nov 13 (Reuters) - Falling oil prices have spooked Wall Street and even parts of Texas. But in North Dakota's booming oil patch, the crude-fueled party carries on.
Since June, the price of crude oil has fallen 30 percent to about $75 a barrel, raising fears that oil production would slow across the United States. But you wouldn't know it here. The state's economy remains the fastest growing in the nation, thanks to more than 1 million barrels of oil produced each day.
Billions of investment dollars continue to flow to new wells, apartments and shopping centers, a bet that development of the state's prolific Bakken shale formation, which the U.S. government believes could hold more than 7 billion barrels of oil, will abide.
"The oil price drop is a topic of discussion here," said Joel Lundeen, an owner of The Bakken Club, a $5,000 initiation fee dining establishment in Williston, the de facto capital of the state's oil boom "But people aren't freaking out."
One reason: The price of oil would have to fall considerably before a major impact. While analyst projections vary widely - some focus on costs to continue drilling; others to build new pipeline - state officials consider $42 per barrel the price at which most production would cease. That's about $35 below the current price for benchmark American crude, a level many are betting won't be reached due to insatiable global energy appetite.
Simply put: community leaders and industry executives are confident - despite two previous oil busts - that the oil and natural gas buried miles underground here will remain profitable to extract for years to come.
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