Has North Dakota Hit The Bottom Of The Oil Downturn?
“The number of rigs actively exploring for or producing oil and gas in North Dakota held steady for the third straight week, state data show,” reports UPI today. “The North Dakota Industrial Commission reports 68 rigs in service as of Monday, unchanged for the last three weeks.”
Here’s what that looks like in chart form. It does indeed seem as though the fall in drilling activity has leveled out. Oil production, meanwhile, has hardly faltered:
One major challenge lawmakers faced earlier this year was budgeting amid falling oil prices with no really good way to be sure about what the “new normal” for the state would be as we descended from the peak of the oil boom. Now, months later, as general fund revenues come in under projections (latest numbers here) anxiety among policymakers is running high.
While the state certainly has billions in reserves tucked away in various funds, much of those funds are restricted by statute or the state constitution. Dipping into those funds would require serious policy decisions, and it would likely be embarrassing for lawmakers making it seem as though they weren’t appropriately conservative in their budgeting.
The new biennium just began on July 1, so there’s a long way to go before we understand how accurate revenue projections are and whether or not the budget will need tweaking. But if the bleeding in oil activity has stopped, if we are truly at rock bottom when it comes to drilling, then that’s good news.
One thing is certain: If this is as bad as the oil downturn is going to get, it’s not that bad at all. Though I suspect certain political interests – Democrats, I’m talking about the Democrats – are rooting for disaster for the sake of inspiring a shift in the state’s political allegiances.