Gov. Doug Burgum thinks there’s a possibility that federal stimulus dollars could be used to help restart North Dakota’s oil industry, once demand rises and prices recover.
The state’s Industrial Commission – chaired by Burgum – met to look at what actions it could take, after oil prices went negative Monday. The Commission considered a 40-day emergency rule, to declare oil as waste, when the price goes south the way it did. But the Commission didn’t take any immediate action, and will wait to see what other oil-producing states and Canadian provinces propose.
Right now, about one third of North Dakota’s oil wells – 5,000 out of 16,000 – are now idled.
State mineral resources director Lynn Helms told the Commission he would like to see if some of the stimulus money could be used to help the oilfield services industry.
"We're looking at $25,000 to $50,000 per well to restart production," Helms told the Commission. "We're looking at $100 million to $250 million to restore production."
Burgum said he could see paying for those wells to come back on line.
"If we look at the revenue the state depends on from oil taxes, spending money on kickstarting oil production could be the fastes way to return the state's economics," Burgum said. "The opportunity to use federal stimulus finds would mean a huge return on investment, versus any other thing we can spend a dollar on in speeding the recovery."
Burgum said he could see the federal stimulus dollars being used for this, because the pandemic has severely reduced the demand for oil.