North Dakota launched a task force on May 6 set to outline a recovery plan for the state’s oil and gas industry and supporting sectors impacted by the COVID-related demand shock.

The group, named the Bakken Restart Task Force, will play a critical element for protecting the over 72,000 jobs contributed by the oil and gas industry in North Dakota, the second largest oil-producing state.

WTI crude futures were trading around $23.26/bbl on May 6, down from $61/bbl at the start of the year. The plunge in prices, below many producers' cost of output, has forced several companies to halt activity and curtail production by shutting in wells.

According to Lynn Helms, director of the state’s Department of Mineral Resources, North Dakota currently has 6,800 wells shut-in, which amounts to 450,000 bbl/d of oil production.

”There are still 27 rigs operating and five frac crews running—these are staggering numbers impacting North Dakota production,” Helms said in a statement.

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North Dakota’s oil and gas industry was forecasted to generate $4.9 billion revenue to the state from July 1, 2020 through June 30, 2021, which comprises 57% of all revenue collected by the state, according to a release from the Department of Mineral Resources.

The Bakken Restart Task Force will focus on three core areas:

  • Regulatory Relief, focused on assembling regulatory agencies to work as one toward identifying and streamlining regulatory requirements, clarifying and communicating existing relief efforts;
  • Economic Stimulus, identifying all existing programs and funding sources, investing in projects with long-term benefit to the state such as abandoned well plugging, environmental remediation, research pilot projects, etc., to get the service industry back to work with the added benefit of investing in needed projects at a time when labor and service costs to the State are at an all-time low; and
  • Bakken Smart Restart, focused on the long-term recovery of our oil and gas industry, includes proposals for tax relief, low-cost financing.

The task force is comprised of representatives from the Mineral Resources, Public Service Commission, Environmental Quality, Trust Lands, Pipeline Authority, Office of Management and Budget, Tax Department, Commerce, Bank of North Dakota plus input requested from various industry subject matter experts.

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