Report: New Mexico Threatens North Dakota's No.2 Oil Ranking

BISMARCK, N.D. (AP) — North Dakota has ranked as the nation’s second-biggest oil producer for nine years, but it’s on the verge of losing that status because oil production is soaring in New Mexico.

Texas continues to lead the nation in oil production. The Permian Basin spans parts of New Mexico and Texas, and it’s arguably the biggest competition for North Dakota’s Bakken oil patch. The southern oil-producing region is closer to major refineries and export terminals, and it attracts significant drilling and investment within the oil and gas industry.

The U.S. Energy Information Administration reported Monday that New Mexico produced 1.16 million barrels of oil per day in March, the most recent month for which data is available from all states. North Dakota’s daily oil output that month was 1.11 million barrels, according to data from the state Oil and Gas Division.

But the figures reported by the federal government for New Mexico differ from the numbers produced by the state’s own regulators. A state agency there put New Mexico’s output at 1.05 million barrels per day, the Bismarck Tribune reported.

It’s unclear what accounts for the discrepancy. North Dakota officials say they believe the federal government takes estimates into account. Either way, the states are neck and neck.

“It’s a horse race,” said Lynn Helms, North Dakota’s mineral resources director.

“At the rate that they’re growing production, they’re going to pass us unless our pace picks up,” Helms said.

Aside from bragging rights, a state's position holds other implications. Rankings can affect an oil company’s ability to find investors to fund a project in a state, Helms said. And North Dakota’s ranking matters as the state seeks to “flex its muscle” with federal agencies on issues such as methane emissions rules and oil leasing on public lands, he said.

North Dakota became the nation’s second-biggest oil producer early in the Bakken oil boom as horizontal drilling and fracking technology sent the state's oil production skyrocketing. It surpassed Alaska to take second place in 2012.