Looking back on a turbulent year for the oil and gas sector
BISMARCK, N.D. (KFYR) - Uncertainty, volatility, and disruption: these key words describe the difficult year the nation’s energy industry has undergone.
And North Dakota’s is no different.
Oil and gas industry leaders have had to maneuver through a tough year, which started by being put in the middle of a price war between Saudi Arabia and Russia and is ending with an administration keen on ensuring clean energy trumps fossil fuels, effectively shutting down the Keystone XL Pipeline and leaving producers uncertain of Dakota Access’ future.
A price war between Saudi Arabia and Russia was the first sign of trouble, leaving North Dakota in the middle and causing a fall in oil production.
All of this hit right before the state had its first COVID-19 case.
As quarantine began and travel stopped, demand for oil dropped to a historic low. Having nowhere else to go, storage tanks filled with oil.
“We’ve never been at this level at this time of the year in history,” said Department of Mineral Resources Director Lynn Helms on March 15, 2020.
WTI market price then dropped from an already unstable $20 a barrel to just 20 cents.
“Nobody expected crude oil to drop to basically a penny,” said North Dakota Petroleum Council President Ron Ness.
The price then shockingly dipped even lower to negative $37 a barrel.
The Petroleum Council’s Ron Ness recounts this moment.
“You start worrying about, are we going to have to shut everything down? And from there it just escalated into people having to lay people off and shut down their rigs, shut down their activities, so it was a pretty incredible shock. I would say there was shock and awe to all of us,” said Ness.
There’s been about 13,000 unemployment claims since the beginning of the pandemic in the energy sector alone, mostly stemming from the Bakken area.
One rig worker reflects on this past years’ drop in production compared to 2015.
“When it died out the last time it shut down fast, but not this fast,” said former rig consultant Kevin Syverson, whose worked in the oil and gas sector in the Bakken for nearly 40 years.
Industry leaders and producers are still uncertain what a full recovery will look like, but believe they won’t see a hint of it until sometime next year.
Under a Biden administration, Ness said the state may be pushed to focus on renewable energy, but said North Dakota has been a leader in ensuring our energy sources are clean ones.
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