Department of Mineral Resources: pipeline limits, Bakken inventory and EOR pilots shape outlook

Nathan Anderson, director, Department of Mineral Resources, told the North Dakota House Appropriations Committee that oil production in the state is holding near 1.15–1.2 million barrels per day and that gas capture in the state “remains very positive and solid at 95%.”

Anderson said those figures, combined with an increasing gas‑to‑oil ratio, mean the state could become “pipeline limited” if production reaches about 1.3 million barrels per day — a threshold he and agency staff project could arise in the current biennium if production and gas ratios continue their trends. He said the potential constraint could reduce oil volumes if additional takeaway capacity is not developed.

Why it matters: North Dakota produces the vast majority of its output from the Bakken/Three Forks system, and Anderson told the committee that roughly 97% of the state’s production comes from that pool. That concentration makes access to gas‑takeaway infrastructure and technologies to use or export associated gas central to sustaining production and related state revenues.

Anderson reviewed several technical and policy items: updated inventory estimates for the Bakken/Three Forks; longer lateral drilling trends; ongoing enhanced oil recovery (EOR) pilot projects; and federal Infrastructure Investment and Jobs Act (IIJA) funding used to plug and reclaim legacy wells. He said DMR staff updated a Bakken/Three Forks inventory that shows about 2,600 remaining wells in the core “Tier 1” area and a broader inventory of roughly 23,000–24,000 wells when tiers 2 and 3 are included. He described Tier 2 as about 50% developed and Tier 3 as fringe areas with sporadic economics.

On EOR, Anderson said several pilot projects are underway and highlighted that the first four‑mile lateral in the state was recently completed. He cautioned that CO2‑based EOR and CO2 pipeline infrastructure are promising but remain long‑lead, maturing technologies in the Bakken: “Do I think it’s ready for prime time next year? No,” he said, noting pilots and testing will be critical.

Anderson summarized IIJA activity in North Dakota. He said an initial $25 million IIJA plug-and‑reclaim grant had been used to plug 73 wells and reclaim 114 sites with North Dakota contractors. He said a larger formula grant has been awarded but that the Interstate Oil and Gas Compact Commission is negotiating grant requirements with the U.S. Department of the Interior because federal stipulations under the National Historic Preservation Act and the Endangered Species Act have made some member states reluctant to accept formula grants as currently written.

On infrastructure, Anderson asked the committee to consider ways to incentivize gas utilization and takeaway projects. He cited a slide prepared by pipeline staff showing gas‑to‑oil ratios increasing faster than oil production and said that, without additional takeaway capacity, growth in oil production could be capped by the inability to move associated gas from the field. Justin Kringstad, identified in the presentation as representing the pipeline authority, was referenced as the staff member with detailed pipeline and takeaway data.

Committee members questioned Anderson about gas export policy, federal leasing, the potential impact of offshore restrictions and sanctions, and the role of mergers and capital flows in future activity. Anderson discussed industry consolidation, saying large multinational companies can shift capital among global assets and that may influence activity levels in North Dakota.

The presentation also covered non‑Bakken activity (Madison zone pilot wells and scattered plays), drilled‑but‑uncompleted well trends, rig and frac crew counts (Anderson described these as roughly steady, with modest changes as companies complete DUCs), and historical drivers of production. He repeatedly framed many items as contingent on price, capital decisions, pipeline capacity and technological advances in EOR.

The committee and Anderson agreed to follow up: committee members asked DMR and pipeline staff for a consolidated list of gas‑utilization and takeaway opportunities, and Anderson said DMR will coordinate with Justin Kringstad and other agency staff to provide further details to legislators and to Government Operations in an upcoming session.

Ending: Anderson closed by saying he will continue reviewing inventories and projects as DMR updates its forecasts with OMB and other agencies. The committee scheduled further briefings with DMR and related agencies to examine budget and program details in subsequent hearings.