The debate over whether North Dakota should declare oil production with current low commodity prices a waste and limit production pitted the state’s No. 1 O&G producer against the state’s biggest O&G association, Kallanish Energy reports.
Continental Resources said it is in favor of the state taking action, while the North Dakota Petroleum Council representing 650 companies disagreed during Wednesday’s day-long hearing before the North Dakota Industrial Commission.
The commission is considering a request to declare oil produced below market cost and in excess of market demand to be waste that must be prevented by the state.
North Dakota is the third U.S. state to consider helping the struggling oil and gas industry.
No decision has been made by the commission.
Continental Resources, the largest producer in the Bakken Shale, said it wants North Dakota to intervene, perhaps by limiting production or restricting flaring of unwanted natural gas.
The association said many producers have already cut production and urged the state to let the markets rebound without government intervention. It was joined by the American Petroleum Institute.
North Dakota production has fallen by 510,000 barrels per day since prices dropped in March due to the coronavirus pandemic and the oil price rout, state officials said.
About 6,900 producing wells have voluntarily shutdown.
It is the No. 2 oil-producing state in the United States behind only Texas.
Earlier this month, Texas rejected a proposal to impose state-mandated production cuts.
Oklahoma is considering two applications for government intervention to stabilize markets.
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