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EPA Threatens North Dakota Oil Boom

Oil production in North Dakota has boomed to the point that the state now produces nearly as much oil each day as OPEC member Ecuador.

But a decision by the Environmental Protection Agency (EPA) could bring a halt to the boom that has virtually eliminated unemployment in North Dakota.

The state now has 200 rigs pumping 440,000 barrels of oil daily in the Bakken shale formation, according to the Heartland Institute. The state’s unemployment rate is holding at just 3.5 percent, with many oil industry jobs paying more than $100,000 a year, and “we have 18,000 jobs looking for people,” North Dakota Republican Rep. Rick Berg told The Hill.

“If our country’s GDP grew at 7 percent, as it does in [my] state, most of our problems would be over in two years.”

The North Dakota legislature is using some of the state’s oil revenue to fund $1.2 billion in infrastructure improvements, including roads and schools. Public schools will receive $340 million in oil-related revenues over the next two years, and oil money will pay for a disaster relief fund and a reduction in property taxes.

Also, the legislature has ordered that 30 percent of the funds from the state’s 6.5 percent oil extraction tax be sent to the state’s Legacy Fund, which cannot be touched until 2017, when accrued interest will become available for spending.

One reason for the boom: “The regulatory environment was already low in North Dakota, certainly better than California’s and some other oil-producing states,” said Brett Narloch, executive director of the North Dakota Policy Council.

“As we move forward with oil production, I expect the business environment to get better."

Most of the Bakken shale production is occurring on private land, but analysts and state legislators fear the EPA may still seek to shut it down, the Institute reported.

The federal agency is currently investigating hydraulic fracturing (fracking) production techniques, which are used in shale oil production.

Narloch said: “If the EPA decides to ban fracking, that shuts down the entire industry since so many of the wells operate by that procedure. It would kill this once-in-a-lifetime opportunity.”

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