North Dakota will begin putting at least some of its unemployed oilfield workers back to work starting the third week in July, right about the same time as Paycheck Protection Funding is expected to run out.
The North Dakota Industrial Commission on Friday, June 19, approved confiscation of 239 wells, all part of a CARES Act funded Bakken Restart program designed to retain at least some of its oilfield service workers.
The state had 368 wells on its list for confiscation, but Department of Mineral Resources Director Lynn Helms said that the well confiscation hearing June 10 prompted some companies to return 17 wells to production and to plug 19 others on their own.
The operators of another 93 wells asked the state for more time to pursue obtaining either a single-well bond or plugging and reclamation. They will have until Sept. 1 to do that, or Helms will be authorized to seize the wells for the plugging and reclamation program.
Operators of another 87 wells, meanwhile, have asked the state to add their wells to the list for confiscation.
There must first be a public hearing for those, Helms said, before they can be added to the list for the program.
North Dakota first approved $30 million in CARES ACT funding to plug abandoned and orphaned wells last month from a portion of its $1.25 billion in CARES Act funding. On Friday, the Emergency Commission approved $409 million more in CARES Act spending, of which another $33 million was directed to the Bakken Restart program. Those funds are being earmarked for reclamation of plugged wells.
Helms estimates the plugging program will employ 550 people for six months. The reclamation funds, meanwhile, will support another 600 jobs for the same length of time, likely starting around Aug. 1.
Helms said data will be tracked daily on each well, including how many workers were on site, what work was done, what equipment was confiscated if any, and how much money was spent. That data will be included in each well file.
Helms will also tap North Dakota companies to create smartphone forms for the reporting forms. He’s also working with North Dakota consultants to check each site for contamination issues, to ensure it is removed before sub and top soil are put down.
His field inspectors, meanwhile, will be able to review each plug, ensuring it is done to specs.
“Our goal is to have the top soil on by the end of the year and have it ready to be seeded in the spring for crops,” Helms said. “Or to have native grasses already seeded and ready for fall rains.”
North Dakota has identified 549 abandoned wells in all, Helms told Commissioners, spanning 70-some years of oilfield production. Just over half of the wells, which are mostly in Renville, Bottineau, Burke, and McKenzie counties, date back to the 1950s.
North Dakota has fewer orphaned wells than other oil and gas states, Helms said. Texas, the No. 1 oil producer in the nation, has 6,200 orphaned wells, while Kentucky has 13,000.
Pennsylvania has 9,000 confirmed orphaned wells, but likely has more than 100,000 in all, as the locations of many of its earliest wells were never recorded.
Helms estimated the Bakken Restart program will reclaim about 2,200 acres of agricultural land for the 239 wells it’s starting with.
“It is a very small problem compared to other states,” Helms said. “But it is a very large problem if you are a farmer or rancher in oil and gas country.”
The state will no longer, as of April 1, allow abandoned wells to transfer without single-well bonds, Helms said. He believes that will resolve 99 percent of the problems that led to this situation.
Helms added that North Dakota’s approach to the oil and gas downturn is being considered as a model for the nation.
“Congress is right now writing a bill modeled on your program to put roughly $1.8 billion through the Department of Energy and Interstate Oil and Gas Compact Commission to the other states to do the same thing you are undertaking here today,” he said.
North Dakota public officials estimate the state has more than 9,200 unemployment claims related to the oil and gas sector.
That number is expected to rise as the Paycheck Protection Program runs out.
A task force was begun to look at how to keep at least some of those individuals working in the state, to help restart the oil and gas sector when it eventually recovers.
Among other ideas the task force is considering is a thief hatch replacement program, which for $10 million would support 200 to 400 jobs for two to three months, and reduce fugitive methane emissions by 15,000 tons per year.
They are also considering three WAWS projects for $19.5 million which would support 100 to 150 jobs at 100,000 man hours or four months of work.
Neither of the latter two projects have been submitted for CARES Act spending yet.