Well, folks, the “Top five Bakken stories of the week” has made a comeback after an indefinite hiatus (it’s a long story). Oil prices are still low, layoffs still haunt the industry, and the state of North Dakota is facing it’s own heap of crises (just to name a few). Since it’s been awhile, we’ve reached back a couple weeks in order to roundup a few of the most important and most viewed stories from recent weeks. View the list below to see if there’s any news that slipped past your attention, and don’t forget to check back next week for the recap! So, without further ado, we present to you…
5. Eminent domain possible issue in pipeline’s passage in Iowa
DES MOINES, Iowa (AP) — Iowa utilities regulators are considering whether to allow a Texas company to bury 346 miles of a crude oil pipeline under farmland and give it authority to use eminent domain to force unwilling landowners to sign easements.
Iowa is the only state yet to approve the permit for the $3.78 billion Bakken pipeline, which will carry about a half-million barrels of oil per day from North Dakota to Illinois, crossing through Iowa and South Dakota. The pipeline, to be built by Dakota Access, would stretch diagonally across 1,300 parcels of land and 18 counties in Iowa at a cost of $1 billion.
4. ‘We really don’t plan on giving up our lead,’ EOG chief says
William Thomas, chairman and CEO of Houston-based EOG Resources, told the audience at the 2016 NAPE Summit that he does not plan to surrender the lead his company has made as the largest onshore oil producer in continental United States.
“We really don’t plan on giving up our lead,” Thomas said at the George R. Brown Convention Center in Houston.
At the summit, Thomas spoke about the future of horizontal oil drilling in the United States.
3. Low-volume North Dakota oil wells may suspend production
BISMARCK, N.D. (AP) — Hoping to help North Dakota’s struggling oil industry, state regulators on Tuesday decided to allow owners of low-volume “stripper” wells to suspend production while they await a rebound in crude prices.
After being idle for 12 months, a North Dakota oil well has to resume production or be abandoned and plugged. North Dakota’s Industrial Commission agreed to extend that another year.
Gov. Jack Dalrymple, Attorney General Wayne Stenehjem and Agriculture Commissioner Doug Goehring — all Republicans — make up the commission.
2. Global oil production cash negative at current prices
3.4 Million barrels per day (b/d) of oil produced globally is produced at cash negative number, according to an analysis by Wood Mackenzie. This has resulted in an unexpectedly low rate of stopped production of less than 100,00 b/d globally. Companies continue to pump oil despite these low rates in hopes oil prices will rebound. Restart costs and covering fixed costs also influence the decision to continue production.
1. North Dakota “Great Recession” real estate crisis?
The North Dakota Office of State Tax Commissioner recently reported a $63 million shortfall in anticipated sales tax collections in December of 2015. Sales tax collections have declined by over 50 percent in some oil patch cities. Even with a massive state investment program and projects that were financed prior to the recent decline in oil prices, sales tax revenues still collapsed.
Plunging sales tax revenues may only be the tip of the iceberg of what may be an even larger systemic problem starting to develop in the formerly “white hot” North Dakota real estate market. If sales tax collections are any indication of what the future holds, there may be big trouble on the horizon for local real estate markets and local governments who rely on property taxes to finance budgets.
Bonus — Watford City sustains growth despite downturn
McKenzie County is still seeing growth, despite recent layoffs and budget cuts that have dominated recent news headlines. While drilling has indeed slowed, production holds steady. As a result: permanent jobs and a steady stream of economic growth in the region.
People might not be flocking to the Bakken like they were two years ago, but population in McKenzie County is now beginning to stabilize. Located in the heart of the oil patch, about half the current rigs in operation are located there. While many companies have cut back their total number of employees, those who are left are in for the long haul, and those who are still working are really good at what they do. They’re not going anywhere.