Oil brings good and bad...

Posted 12/15/20 (Tue)

Some disturbing news came out of the North Dakota Department of Mineral Resources this month. The agency reported that as of Dec. 8, there were only 16 active oil rigs drilling in the state.

That’s down more than 80 percent from two years ago when there were 64 active rigs. On Dec. 8, 2019, it had dropped to 55.

You can blame COVID, you can blame OPEC, you can blame over production in the U.S. oil market and some have even blamed it on the stalling of the Keystone XL pipeline.

Whatever it is, the number of drilling rigs has tanked when you consider that at the height of the boom in 2013, there were more than 200 active drilling rigs in North Dakota.

If you look specifically at McKenzie County, it depends a great deal on oil revenue as well as the jobs created when rigs are drilling in the Watford City, Alexander and Arnegard areas.

However, those jobs have dried up. They are gone. In fact, Whiting Petroleum announced this fall it has laid off 16 percent of its work force, which is about 100 people.

Enbridge, the Calgary oil company that once had a strong presence in western North Dakota, has also made some drastic changes.

It has laid off a number of people, closed an administrative building in Minot and dropped to a bare bones staff at its Berthold holding facility.

We can probably expect to see population increases in the west tapering off now that support staff is no longer needed. That means, Williston, Tioga, Watford City, Alexander, Killdeer, New Town, Stanley and Crosby most likely won’t see additional population until the next boom and we don’t know when that will happen.

Communities like Kenmare, Beulah and Sidney are on the fringe of oil production and haven’t seen the drastic ebbs and floes in revenue, population, crime and new business.

But, it isn’t all gloom and doom. There are some interesting numbers that need to be presented here that indicate North Dakota’s oil production remains very solid.

In other words, those rigs that are pumping oil are continuing to produce just like Holstein cows in a dairy barn.

The state’s barrel-per-day output has tapered off, but still remains 1.2 million barrels. Our state remains a solid second place in the nation in oil production, behind only Alaska.

According to the Department of Mineral Resources, 16 counties in the state are producing oil. They include Billings, Bottineau, Bowman, Burke, Divide, Dunn, Golden Valley McHenry, McKenzie, McLean, Mountrail, Renville, Slope, Stark, Ward and Williams.

Two other counties, Adams and Hettinger, are on the list, but haven’t produced oil in several years. Hettinger County’s last production was May 2002 and Adams County stopped producing in August 1996.

Regardless, some of these county numbers are impressive, most notably McKenzie, Dunn, Mountrail and Williams counties.

When you consider barrels of oil produced per month, McKenzie  County dwarfs anybody else.

The latest numbers available are from the end of July when McKenzie County produced 12.1 million barrels of oil. That was up considerably from June when it was 9.6 million barrels.

Dunn County’s production was 6.3 million barrels in July, Mountrail’s output was 5.3 million barrels for the month of July and Williams churned out 4.8 million barrels.

None of the other counties really come close to those four, but when you consider the others, they are producing a tremendous amount of crude oil in their own right.

Take for instance Burke County. It had 2.9 million barrels of oil in July and Divide County produced 3.9 million barrels in July.

The lowest number on that list is Ward County, which produced a modest 1,500 barrels in July.

These production statistics go all the way back to April 1951 when Williams County produced 3,092 barrels of oil that month.

In fact, it wasn’t until a year later, in April 1952, that McKenzie County joined production with 1,998 barrels.

When the next boom occurred in 1983, production numbers were very similar to what they were in July of this year.

The activity of drilling has certainly diminished, but the barrels of oil produced hasn’t.

And just because the rig counts have dropped, it doesn’t mean production hasn’t. It means the state is still getting oil tax revenue, but Main Street is missing out on a lot of local paychecks that are gone.