BISMARCK, N.D. — Decades-old oil wells that pump low-grade North Dakota sour crude are in danger of being shut down if prices hold at near worthless levels, the state’s oil industry group said Tuesday.
Sour crude is oil that’s high in sulfur and more difficult to refine than low- or no-sulfur sweet crude. Sour crude represents about 0.5 percent of North Dakota’s oil production and most of the 754 wells pumping it are in aging fields on the northern edge of the state’s oil patch in Bottineau and Renville Counties, near the U.S.-Canada border.
Sour crude prices slipped to $1.50 a barrel on Friday but rebounded to $8.50 a barrel on Tuesday. North Dakota sour crude fetched about $14.80 in January 2015.
North Dakota Petroleum Council President Ron Ness said if sour crude prices were to hold at just a couple of dollars a barrel, the wells will likely be shut down until prices rebound.
Some of the wells have been producing since oil was first discovered in North Dakota in the 1950s, he said.
“It would be a horrible deal for producers and mineral owners but those wells would be shut in, waiting for a better market,” Ness said.
North Dakota’s Department of Mineral Resources said the state produced an average of 1.1 million barrels of oil daily in November, the latest figures available. Agency spokeswoman Alison Ritter said sour crude make up only 7,400 barrels of that daily production.
Oil companies stopped shipping sour crude on North Dakota pipelines in 2011 to make way for the higher quality and more plentiful crude from the state’s oil patch.
Justin Kringstad, director of the North Dakota Pipeline Authority, said most of North Dakota’s sour crude is hauled to Canada by truck, where it’s transferred to other pipelines destined for U.S. refiners.
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