MOORHEAD - Low oil prices have North Dakota's energy industry in survival mode, but the situation is not shaping into a bust like the one the state suffered in the 1980s.
That's the assessment of Ron Ness, president of the North Dakota Petroleum Council, who assured a gathering of area business people here Tuesday that oil prices will normalize at some point.
"This is not a collapse, it's a dip in the road. Producers will survive; they know how to hunker down," Ness said during an Eggs & Issues breakfast hosted by the Fargo Moorhead West Fargo Chamber of Commerce.
With the price of oil around $37 a barrel, down from nearly $100 a barrel in mid-2014, Ness acknowledged things are becoming increasingly difficult for businesses tied to the western North Dakota Oil Patch. He said oil prices will have to increase significantly for recovery to happen.
"I think we have to make this work at $60 (a barrel)," Ness said.
In the meantime, North Dakota's energy sector is losing skilled people, which Ness said is exacerbating an already critical workforce shortage.
"This has got to be a focus of the state," he said. "We need to continue to grow our workforce base."
North Dakota Tax Commissioner Ryan Rauschenberger also spoke at Tuesday's forum, saying that while the price of oil has fallen dramatically, North Dakota's oil output has been stable.
And that, he added, is a major difference between the situation today and what happened during the bust years of the 1980s.
"Production hasn't fluctuated with price," Rauschenberger said, noting that oil and gas taxes represent the No. 1 tax type collected in the state of North Dakota.
He said less than 8 percent of oil tax revenue goes to the general fund, which he said keeps budget volatility low in that area.
Besides low oil prices, Ness said North Dakota's energy sector continues to face other issues, including the problem of spills.
"It's a tough issue. We gotta get better at it," he said.
Flaring also remains a problem, but the industry is working to address it, according to Ness, who said the burning of natural gas at oil production sites dropped 65 percent last year and the industry spent $13 billion on the problem.