North Dakota exploration and production activity moving lower as the state struggles with emerging fiscal strains from lower crude oil prices. File photo by Gary C. Caskey/UPI | License Photo
BISMARCK, N.D., Aug. 22 (UPI) -- For the third week in a row, state data show the number of rigs actively exploring for or producing oil and natural gas in North Dakota declined.
A metric that offers a loose picture of the level of confidence for energy companies, rig counts across North America have increased along with crude oil prices. State data for North Dakota, however, show 32 rigs in service as of Monday, one less last week for third straight week of decline.
North Dakota in June, the last full month for which state data are available, posted an average rig count of 28, one higher than the state average in May. The rig count statewide, however, is down 84 percent from the all-time high of 218, set in May 2012.
Oil production in June, meanwhile, declined 2 percent from the previous month to around 1.03 million barrels per day and more than 15 percent lower than the all-time high reached in December 2014.
The decline in energy sector activity is spilling over into the state economy. Gov. Jack Dalrymple has called on state leaders to find ways to cut costs given the lower cycle for the oil market. Without a course correction, the state estimates its general fund will be short about $310 million by the end of the current biennium.
State data show an expected decline in revenue from oil and gas taxes, with the two years ending 2015 the likely peak for oil and gas taxes and the state general fund.
North Dakota depends primarily on rail deliveries to get oil out of the Bakken shale reserve area to regional markets. That capacity is "adequate," according to state regulators, though the state is working to expand pipeline access to the rest of North America.
Pointing to concerns about public safety tied to protests against the Dakota Access Pipeline, the governor last week stopped short of enacting the state National Guard, but issued a restricted emergency declaration as a preventive measure.