FARGO — Oil prices have fallen since March when the coronavirus pandemic struck, dipping below zero dollars in April. In North Dakota, the No. 2 oil-producing state in the country, about 6,900 of the 16,000 wells are shut in as oil activity plummets.
In her decades of involvement with North Dakota oil, Kathleen Neset hasn’t seen a plunge or downturn like this before.
Neset, the president of Neset Consulting Service in Tioga, N.D., which provides wellsite geologic and geosteering services to the oil industry, spoke at a virtual 1 Million Cups event Wednesday, May 13, about the present situation in the Bakken amidst COVID-19.
The state is down to about 17 drilling rigs, with 60,000 barrels of oil a day being shut in.
“We believe that that estimate is very conservative, and there's over a half a million, maybe 600,000 barrels a day shut in,” she said. “That is going to hurt this country.”
The pandemic has upended the oil and gas industry, which is facing an unprecedented financial hit as demand has significantly dropped.
“Our travel and economic restrictions, both federal and state, are creating situations that are killing our demand side of the industry,” Neset said via YouTube Live.
People are holed up at home. Aircrafts are grounded -- wingtip to wingtip, nose to tail, parked.
“That is what is causing the demand to drop,” Neset said. “We are not in business.”
The price of crude oil here at the end of April was $-38.76. As May contracts were being built out, nobody could take that crude oil, Neset said.
“What was happening is the oil buyers were saying, not only will we not take your crude oil, we're going to charge you if you send it to us,” Neset said. “That $-38 a barrel, I've never seen that before in my life. I don't think any of us have. It’s just incredible.”
What’s at stake? Our national security, said Neset, who is also a member of the North Dakota Petroleum Council executive board.
“All of the work we have done for the last 16-17-18 years has been to make North Dakota and the United States energy independent. We need to preserve that,” she said. “... With North Dakota being the No. 2 oil-producing state in the nation, this is the time for us to step up.”
Still, Neset is optimistic. North Dakota was producing an average of 1.5 million barrels of oil daily earlier this year before the pandemic struck, which has now been slashed by almost a third.
“We came into this difficult time, this downturn, so strong,” she said. “This industry is strong, the state is strong and the national economy is strong. And I think coming into it smart and strong, we will be able to step out of this. There is a great big world and this world will continue to spin, and it needs oil and gas. It needs energy.”
What can North Dakotans do about this? Support each other’s businesses. Support the workers, Neset said.
“University of North Dakota and North Dakota State are doing wonderful work in research,” she said. “Let’s get this research and continue to work with the (Energy and Environmental Research Center) and help bring better technology.”
A local entrepreneur is carrying out that goal. Ray Berry of OmniByte Technology is offering his company’s mobile application, FormsPro, to oil and gas industry companies for free, which allows technicians to complete forms online or offline.
Every person who sets foot on a rig has to fill out a job safety form, Berry said, a lot of which is done on paper. Now, in the age of coronavirus where workplaces will have to screen workers for COVID-19 symptoms in addition to the traditional documentation, FormsPro will help by taking the paper forms and putting them into a digital format.