ConocoPhillips (COP), Oasis Petroleum Inc. (OAS): Massive July Jump in Bakken Oil Production

Obstacles still to overcome
That being said, there is still one major issue holding the Bakken back and that’s infrastructure. For example, while North Dakota produced a record 9.7 billion cubic feet of natural gas per day in July, nearly a quarter of that was flared. Part of the problem was that Oneok Partners LP (NYSE:OKS) ran into some mechanical problems at one of its natural gas processing plants. However, the overarching issue is that there still isn’t enough processing capacity or pipelines to get the gas to market.

It’s not just the gas either. Nearly 67% of the oil produced in July was shipped by rail. While that has been a boom for railway companies like Warren Buffett’s Berkshire Hathaway Inc. (NYSE:BRK-B), it has the potential to become a big future problem. It was Bakken oil that was to blame for the tragic disaster in Canada’s Lac Megantic. The problem that regulators are finding is that the railway cars carrying Bakken crude are not always properly labeled, which was the case in the oil carried by the runaway train in Canada. If another disaster of that magnitude were to occur it could put the brakes on the crude-by-rail phenomenon, which could also put a halt on production growth as there just aren’t enough pipelines yet built to carry all the crude oil.

Final Foolish thoughts
Those issues aside, the Bakken continues to deliver game-changing oil production. It’s the leader of the oil boom that no one saw coming. It’s also a boom that’s showing no signs of slowing down.

The article Massive July Jump in Bakken Oil Production originally appeared on Fool.com is written by Matthew DiLallo.

Fool contributor Matt DiLallo owns shares of ConocoPhillips. Matt DiLallo has the following options: long January 2014 $70 calls on Berkshire Hathaway. The Motley Fool recommends Berkshire Hathaway and ONEOK Partners, L.P.. The Motley Fool owns shares of Berkshire Hathaway.

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