Bismarck, North Dakota
Billions of dollars earmarked for investment in the US Midwest oil boom state of North Dakota could be shelved the longer crude prices stay low.
North Dakota’s oil industry operates on high break-even margins because it uses expensive technology to extract oil from rocks deep underground in hard to reach places. US crude has slightly rebounded in February to sit above $50 (Dh183.50) a barrel but is still down on last year’s high of $107.26.
“If this continues to happen year after year we will have to change how we fund government,” said State Senator Mac Schneider in January when crude was below $45 a barrel.
State officials warn that it would only be able to meet two years of funding commitments if oil prices stay low. The state taxes the oil industry less as margins tighten.
Schneider said the state would lose more than $3 billion in revenue over two years if prices stayed between $44 and $54.
Schools
Divide County, on the northwestern fringes of the oil boom state, is gearing up to invest $18 to $20 million expanding its elementary and high schools.
Enrolment is up 65 per cent since 2011 with many young families moving into the community to work in the oil industry.
But sustained low crude prices put many of those jobs at risk. Only three oil rigs were drilling last week in Divide County, down from 12 last August, according to state data.
Divide County Public Schools Superintendent Sherlock Hirning said he is concerned students could be pulled out of school if parents lose their jobs and decide to move home.
“If this oil price continues to decline or stay low at some level that it is at right now, I can’t help but believe it will have some impact on us,” he said.
