Legislators Get Overview on Oil in ND - KXNet.com - Bismarck/Minot/Williston/Dickinson-KXNEWS,ND

Legislators Get Overview on Oil in ND

Posted:
Dir. State Mineral Resources, Lynn Helms Dir. State Mineral Resources, Lynn Helms
Bismarck, ND -

Oil revenues in North Dakota have meant some amazing things to the state.

But before lawmakers make any budget decisions, they get the low down on North Dakota's oil production.

The future is promising, but the reality of loosing production is also on lawmakers minds.

The North Dakota six pack is a big deal, but State Mineral Resources Director, Lynn Helms says get ready for something bigger.

"This is going to look small. The pad will be 8-10 acres with four rows on it like this," says State Director of Mineral Resources, Lynn Helms.

Continental Resources is currently working on 14 wells on one site.

Later this year some sites will host 24 pumping units.

While the Bakken is still the largest oil play being developed in the nation. Helms says lawmakers need to know there's competition. North Dakota has one of the highest oil tax rates in the nation. Which could be a factor in loosing rigs to other states, namely Texas.

Helms says, "With a single decision in a board room you could see a company shift to another play. Be cautious as approach policy and regulatory measures."

Currently, the Eagle Ford play in Texas is the Bakken's greatest competitor.

"Eagle Ford is better, lower drilling costs, and higher productivity." says Helms.

Helms also identified other risk factors that could impact production, all which deal with federal regulations.

Helms says the fiscal cliff is a top concern.

Proposed tax changes that could reduce drilling capital by 35-50%.

Helms says, "what if all risk factors happen? Couldn't sustain very long, if none happen. Then hallelujah we could be at 1.6 million barrels of oil a day or more."

But Helms is giving lawmakers a more conservative projection of 850,000 barrels of oil a day by 2015.

That projection helps lawmakers make their budget and planning decisions.

Helms says western North Dakota needs 6,000 miles of gravel road.

And two oil trucks a day need to be added to keep up with the current growth.

While he says the state has caught up on temporary housing. The lack of permanent housing and apartments is keeping non oil workers away.

Helms says, "we are crowding out a tremendous amount of income and taxes we could have in the state if we'll step up and build out the stuff we need."

In 2012 -- 110,000 people were working in oil and secondary jobs, but according to Helms -- 40,000 jobs could be here if North Dakota had the room.

Helms is asking lawmakers to keep a $1 million fund available to challenge the federal government if it imposing additional hydraulic fracturing regulations.

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