American Oil and Gas Reporter - September 2022 - 44

ConventionSec tion: North Dakota Petroleum Council
N.D. Industry Going Strong,
But Still Not Full Throttle
By Del Torkelson
BISMARK, N.D.-It has been less than
a year since Fredrickson & Byron P.A.
attorney Lawrence Bender accepted the
North Dakota Petroleum Council chairmanship
in September 2021, but the
feeling pervading the industry sure has
changed, he assesses.
" People are much more excited and
optimistic, " Bender says, noting that
upbeat attitude has been clear as NDPC
prepares for its 2022 Annual Convention,
scheduled for Sept. 20-22 at the Rough
Rider Center in Watford, N.D.
That excitement also shows up in how
busy the industry has become. " North
Dakota is seeing a tremendous comeback
in drilling activity, " Bender describes. " It
did not happen immediately because everyone
was a little skittish about how long
higher commodity prices would last. Beyond
that, there also have been issues with
getting back all the necessary services that
disappeared during the last downturn. That
is particularly the case for workover rigs,
which have become very hard to get. "
NDPC President Ron Ness suggests
that crude oil prices near $100 a barrel ordinarily
would prompt a sudden and massive
wave of new activity. Although the
state's industry has quickened its pace, he
contrasts, various burdens have prevented
it from breaking into an all-out sprint.
" Workforce and supply-chain issues
have meant a slower climb, " Ness detailed
in early August. " North Dakota is almost
back to 50 rigs, compared with 55 rigs
before Covid. The Bakken's economics
are still extremely good. We have seen a
transition of assets between operators in
consolidations, mergers and more, but
overall, we hope to see the monthly production
curve trend upward again. "
Numerous factors have kept that production
curve flatter than it should be, he
adds, including major April snowstorms,
logistical constraints and federal permitting
difficulties. " The industry's economic
health has improved, but we are still
emerging from the Covid phase and fog
that has affected everything, " he says.
44 THE AMERICAN OIL & GAS REPORTER
Cooperative Culture
Ness indicates that more than a handful
of members have grumbled about how
long the North Dakota Department of
Mineral Resources' Oil and Gas Division
is taking to process applications for
permits to drill. " I hear a lot of that, " he
acknowledges. " Certainly, state agencies
also are having workforce issues. "
Personnel restraints may be a factor,
but Bender says extraneous requirements
slow both regulators and the regulated
community. " Permitting is difficult and
time-consuming, " he describes. " Companies
say not everything required (for
an APD) is actually necessary, and that
approval should not take so long. "
However, NDPC is working with the
state regulators to streamline APD processing,
and NDPC is working with the
North Dakota Industrial Commission,
Bender reports. He points to the commission's
cooperative history as reason
for encouragement. " It simply may be a
matter time for permitting to accelerate, "
Bender reflects. " Maybe the industry can
put together a task force to discuss how
companies can speed the process, as well
as what the commission can do. The
commission needs to be able to do its job
and we should be able to work things
out. "
Ness cites NDIC's cooperation with
industry to improve gas capture rates as
an example of successful collaboration
between the industry and state regulators.
" Companies can live with a lot of rules and
regulations if they know what they are upfront.
It is difficult for a company to invest millions
of dollars into developing an oil and gas play
only to see the rules change. "
-Lawrence Bender
NDPC Chairman
" They gave us the latitude to follow
through on our promises, " he recounts.
" It takes time to build pipelines and other
infrastructure, and we said continued investment
into oil and gas would attract
capital and allow the build-out to happen.
As bad as a bathroom remodel can be,
you have to allow the project to continue;
now it's done. "
North Dakota companies' gas capture
ratio averages about 95%, he reports, a
huge step forward from a recent history in
which only a few companies could reach
90% and many were closer to 60%-70%.
" But we put $24 billion into North
Dakota natural gas infrastructure at the
same time that companies changed their
mindsets of how to bring wells on line, "
Ness details " They have made reducing
emissions a focal point. It is a sea change
I never expected to come this fast, but investment
and mindset matter. "
Bender also expresses appreciation for
the state's collaborative approach to slash
venting and flaring. " It got industry's involvement
and worked with us to determine
the best way to regulate flaring, " he recalls.
" That has been handled appropriately. "
While the industry will face ups and
downs, Bender continues, its members
can navigate choppy waters more easily
if they have predictable rules and regulations.
" Companies can live with a lot of
rules and regulations if they know what
they are upfront, " he emphasizes. " It is
difficult for a company to invest millions
American Oil and Gas Reporter - September 2022

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