BISMARCK - North Dakota oil production returned to near-record levels in 2017, which one industry leader credited in part to the Dakota Access Pipeline.

"It has been a game-changer," said Ron Ness, president of the North Dakota Petroleum Council.

The pipeline system connecting North Dakota with Gulf Coast markets has lowered transportation costs, making the price for Bakken crude more competitive.

Justin Kringstad, director of the North Dakota Pipeline Authority, said before Dakota Access began service in June, the price for a Bakken barrel was about $7 to $8 lower than the West Texas Intermediate price.

From June through October, the most recent data available, the average discount was $5 a barrel, Kringstad said.

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"That means getting more and more revenue out of each barrel," said Ryan Rauschenberger, North Dakota tax commissioner.

State tax revenues have increased about $43.5 million for the first five months that Dakota Access operated, according to Kringstad's analysis.

That does not include the impact of increased revenue for oil producers and royalty owners.

Dakota Access, developed by Energy Transfer Partners, can transport up to 470,000 barrels a day from the Bakken to Patoka, Ill., with the ability to expand to 570,000 barrels a day. From Patoka, oil is transported on the Energy Transfer Crude Oil Pipeline to Nederland, Texas.

Native American tribes continue to challenge Dakota Access in federal court. In early December, a judge granted a tribal request to require the U.S. Army Corps of Engineers and Energy Transfer Partners to complete an oil spill response plan for the stretch of pipe beneath the Missouri River. Tribes unsuccessfully sought to shut down the pipeline while additional review is conducted. The response plan is due in April.

Kringstad plans to keep watching the impact of Dakota Access, and expects to see some price fluctuations.

"I do continue to expect the market to ebb and flow as it readjusts," Kringstad said.

Ness said the increased competitiveness of the Bakken is one reason North Dakota oil production increased in 2017. Production was nearly 1.2 million barrels a day in October, the most recent figure available, about 42,000 barrels a day shy of the record set in December 2014.

Ness also attributes production gains to advancements in technology and optimism in the industry spurred by President Donald Trump's rollback of regulations.

North Dakota is ending the year with about 53 drilling rigs operating, compared with the average rig count in January 2017 of 38.

Lynn Helms, director of the Department of Mineral Resources, anticipates the rig count will stay in the mid- to upper 50s in 2018.

The state struggled in 2017 to recruit enough qualified workers for hydraulic fracturing crews to keep up with drillers, but caught up in the third quarter to about 30 crews, Helms said.

Even with the additional workers, companies still had a backlog of 889 wells that were drilled at the end of October but waiting on fracking crews.

Natural gas production continued to break records in 2017, as producers focused more on the core area of the Bakken where wells produce more gas. The state produced more than 2 billion cubic feet per day of natural gas in October, an all-time high.

Natural gas flaring also increased in 2017, with more than 320 million cubic feet per day flared in October.

Reducing flaring is expected to be a significant challenge for the industry in 2018. The industry was barely meeting the gas capture targets set by the North Dakota Industrial Commission in the fall of 2017, and those targets are scheduled to become more aggressive in November 2018.

The Petroleum Council plans to make reducing flaring a priority for 2018, re-forming a flaring taskforce to identify bottlenecks, and will work to encourage additional investments in natural gas processing plants and other infrastructure, Ness said.

"We're going to need to have massive investment on the natural gas side," Ness said.