Almost a decade ago, Clint Hacker traded the Arizona sunshine for the subzero temperatures of the North Dakota winter, migrating north along with thousands of others to join in a modern-day gold rush as oil production boomed in the Bakken shale. This year, he was forced to lay off two-thirds of workers at his oilfield services company as the Covid-19 pandemic pushed the state’s oil sector into a downturn unprecedented in both speed and magnitude.
“I think it’s probably the worst times the Bakken has seen — or maybe that the oil and gas industry, in general, has seen,” said Mr. Hacker, now chief executive of Nodak Oilfield Services. The price crash triggered by the pandemic has been brutal for the oil industry across the US, but nowhere more so than North Dakota. Here, the explosive growth of the Bakken — the first big oilfield to emerge during the shale revolution — has placed the sector at the heart of the state’s economy.
Now, as North Dakota emerges from the downturn, the oil industry’s prospects seem far less certain. Investment has dried up, political support is waning, and the future of a key pipeline transporting crude from the state hangs in the balance. This year’s pain arrived quickly. North Dakota entered 2020 at record production levels. Output was second only to Texas as it pumped out almost 1.5m barrels of oil a day, or 12 percent of the nation’s total. “March changed everything,” said Lynn Helms, director of the North Dakota department of mineral resources.
The crash sent North Dakota oil production to a seven-year low
That was when a Saudi-Russian crude price war erupted and stay-at-home orders imposed across the country to stem the spread of Covid forced cars off the roads and grounded planes, crippling oil demand. US oil traded in negative territory for the first time. North Dakota operators shut almost a quarter of their wells, four in five rigs were laid down and production slid 40 percent. By most metrics, said Mr Helms, “the numbers for 2020 are the worst they*ve ever been”.