Dakotas officials weathering ups and downs of oil industry
MINOT, N.D. — Four years ago, 64 rigs were actively drilling in the oil field in North Dakota. As of earlier this month, 17 rigs were actively drilling.
The current downturn has had an impact on North Dakota’s oil patch but yet the state produced 1.083 million barrels of oil a day in February, the most recent numbers released by the state last month.
“Right now it’s all about staying within cash flow and staying within trying to survive and trying to restore some economic strength,” said Ron Ness, president of the North Dakota Petroleum Council in Bismarck.
The North Dakota Petroleum Council provides governmental relations support to more than 525 companies involved in all aspects of the oil and gas industry including oil and gas production, refining, pipeline, mineral leasing, consulting, legal work, and oil field service activities in North Dakota, South Dakota, and the Rocky Mountain region.
When an earlier downturn occurred, Ness said companies were financially strong. But in the more current downturn, he said there have been a lot of bankruptcies, the Minot Daily News reported.
“Service companies that have survived are here — they’re focusing on production,” he said, adding that “no one is building a gas plant or pipeline.”
Yet, the Williston Basin is an area to be showcased, according to Ness.
“What it’s really all about is showcasing that our asset here is still a top asset anywhere you go in the world,” Ness said. “The Bakken is going to be developed and we’re going to have to survive these upturns and downturns.”
“Waking up every day knowing the federal government is trying to crush you doesn’t help. But as a state we’ve got to stand up and be stronger,” Ness said.
Ness noted a motion by the Mandan, Hidatsa and Arikara Nation (Three Affiliated Tribes) “standing up strongly with the State of North Dakota” to continue the use of the Dakota Access Pipeline, which flows north of the Standing Rock Indian Reservation that straddles the Dakotas.
Mark Fox, tribal chairman, in a sworn statement for documents filed in court last month, stated he opposed any shutdown of the pipeline which transports to market more than 60% of oil produced on the Fort Berthold Reservation. A shutdown would be a loss in revenue to the tribe exceeding $160 million in a year and $250 million in two years. A large percentage of the tribe’s budget comes from oil and gas revenues and royalties.
Progress in the state in regard to the oil field is the state has a lot of great technology, Ness said.
Ness said efforts are being done in the state to inform students about opportunities in the energy industry. He said he was in Watford City for T4-Tools, Trades, Torque, Tech, a conference that brought together 900 students from across western North Dakota to talk to them about technical-type career opportunities.
But, he said, he has been hearing from hotel and apartment developers, and others saying, “Hey, we’re starving up here. What’s going on? When are we going to see something happening?”
“What we’re seeing now is we’re seeing a lot of resistance,” he said. “McKenzie County is taking a little bit of heat. It’s been a very progressive supportive county and all of a sudden they’re rejecting projects at the zoning level and some resistance from the county commission.”
“There are some frustrations creeping in,” he said, but adding, “We’ve had some changeover in terms of assets, which is good.”
“We’ve got to get through these downturns,” he continued.
But when one looks at the big picture, he said they can say, “Wow, we’re still at it.”
“What we’ve been through the past year was drilled 1.1 million barrels a day. We still employed 55,000 workers in northwestern North Dakota,” Ness said.
He said North Dakota’s Legacy Fund is all about oil and there’s now about $8 billion in the Legacy Fund.
The Legacy Fund is a perpetual source of state revenue derived from oil and natural gas tax revenue.
“There’s a lot coming back to North Dakota,” he said, referring to the state oil tax distributions.