Federal Commodities Regulator Believes US Oil Industry Can Wait for Prices to Improve

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One of the nation’s leading commodities market regulators said Monday he’s confident the American energy industry can remain stable through the current period of lower oil prices, despite what overseas competition believes.

Christopher Giancarlo, a commissioner on the U.S. Commodity Futures Trading Commission, discussed North Dakota’s role in world oil markets with Sen. Heidi Heitkamp and two of the state’s energy industry leaders at the Dickinson Public Safety Center before getting an oil rig tour in Dunn County.

“Some of our overseas competitors are hoping we can’t wait it out — that we can’t wait out the low prices,” Giancarlo said. “I think they’re going to be surprised when they see this type of ingenuity, preparing ourselves for the lower prices. We can wait it out.”

Giancarlo received a crash course in the state’s oil and gas industry Monday as part of a visit to the upper Midwest that also included agricultural stops in western South Dakota and northwest North Dakota.

“You can’t really understand how to assist a business with the regulatory concerns if you don’t actually understand how they make their money, how they get up in the morning and put food on the table at night,” Giancarlo said.

‘All about survival’

North Dakota Petroleum Council President Ron Ness and Justin Bethancourt, the Bakken operations and maintenance superintendent for ConocoPhillps in Dickinson, gave Giancarlo a nuts-and-bolts walkthrough of how the North Dakota oil industry came to be and how its economy has been shaped by the most recent boom of the past decade.

Giancarlo said a sluggish world economy is keeping oil prices from climbing back to levels seen when the Bakken oil play boomed. He said volatile currency prices around the globe have spilled over into commodity prices of all kinds and has forced producers to hedge their risks.

“You guys have done enormous, fantastic work in supply — both in terms of discovery and production, and then also in terms of productivity and efficiency,” Giancarlo said. “So the supply side of the equation is in really good shape. The problem is the demand side. The demand side is caught in this sort of sluggish global growth that we’re seeing across the western world, across the developing world. Part of the times we live in right now is that anxiety over that missing global growth.”

Ness and Bethancourt said an oil producer’s ability to drill more than a dozen oil wells on a single well pad, an unheard of practice of at the start of the Bakken oil boom, has helped drive profits while lowering production costs.

“I do come away proud of American ingenuity,” Giancarlo said. “The ability to first ramp up and then build this amazing infrastructure. Then, almost as a reward for their success, to see the fall in prices and then once again readjust to that is tremendous. I don’t know if any other country in the world could have done what we’ve done. But we’re a victim of our own success in some ways.”

Ness said oil companies involved in the Bakken shale play are in a better place now than they were at the beginning of 2016.

“The independents, their stock value has been decimated, their balance sheets have been decimated,” he said. “If you would have been here in January or February, we were at risk of losing two or three of our top-five producers to bankruptcy.”

Ness added later that one of the latest trends in the state’s energy market is that operators are selling interests in their drilled-but-uncompleted wells to hedge funds as a way to finance wells that haven’t been brought into production.

“At this point, it’s all about survival,” he said.

Saudi Arabia’s role 

Heitkamp and Giancarlo also delved into Saudi Arabia’s role in guiding the world oil markets. The senator said she frequently hears from North Dakotans who are quick tell her the Saudis are forcing oil prices down in an effort to push the American shale producers out of the market.

“I think the Saudis have been driving the market down. I’m not convinced the Saudis can drive the market back up,” she said. “At some point, they’re going to have more competition than what they want.”

Giancarlo and Heitkamp both said the Saudis, much like North Dakota, are creating value-added industries to help them move past this period of lower oil prices instead of relying solely on crude oil production.

Heitkamp said she also believes the Saudis have recalibrated their long-term price expectations.

“They’re looking at this as transitional,” she said. “They’re trying to figure out what the new Saudi economy is going to look like. They look at the long-term trends in supply and demand.”

Giancarlo added that the Saudis are fine with prices where they are right now “because it’s causing all this pain in the most innovative oil production area in the world, which is right here. It’s causing a lot of pain. It’s an ideal situation for them to be in. They want to maintain their distribution relationships.”

Burgum Showed North Dakotans Want to Get Back to Business

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Color me shocked that Doug Burgum defeated North Dakota Attorney General Wayne Stenehjem so soundly in the state’s Republican Party gubernatorial primary.

While we all knew it was possible, I never thought Burgum — a millionaire businessman and entrepreneur — would carry nearly every North Dakota county.

A friend, who is a huge Burgum supporter, asked me on Election Day how I thought it would all play out. I told him there’s no way western North Dakotans would vote for a Fargo tech millionaire to be their governor.

Boy was I wrong. And I wasn’t alone.

Few predicted a Burgum win, let alone a Burgum rout.

From the moment Burgum announced his candidacy, he just seemed to me like a guy with some good ideas who wasn’t going to get the chance to act on them. Sure, he had the money to win an election, but were small-town North Dakotans really going to turn out for this guy at the polls?

Perhaps the answer, in the end, is Burgum simply wanted it more.

He by no means ran a perfect campaign, but he did what North Dakotans wanted him to do — he went and talked to them.

He loaded up his crew in a 1974 bus and visited as many people in the state as he could. He went to places like the Dakota Diner in Dickinson to tell voters his vision for North Dakota. He made visiting small towns a priority, even going to Amidon (where he just happens to own a nearby ranch).

And he spelled out his vision to North Dakotans, who it seems clearly aren’t happy with the Republican Party’s wish for the status quo in the days following the oil boom.

Stenehjem — one of the biggest political faces of the oil boom as a member of the Industrial Commission — didn’t even come close to equaling Burgum’s campaign presence either in person or in advertising.

To his credit, Stenehjem should be commended for taking his job as the state’s attorney general seriously during campaign season and not shirking his duties to endlessly campaign.

Though if he wanted to be governor, perhaps he should have.

The biggest shift from this election, though, was that Democrats crossed the aisle in droves and cast votes for Burgum, who has many moderate to libertarian viewpoints. What that means for the general election, we don’t quite know yet, but signs sure seem to point to a Burgum landslide.

As Forum News Service columnist Mike McFeely put it Wednesday, Democratic governor candidate Marvin Nelson isn’t finding $8 million in a ditch in Rolette County anytime soon.

Sorry Marvin. But he’s right.

Republicans and Democrats came together to send Burgum on the general election, giving one of the state’s top politicians in Wayne Stenehjem a collective thumbs down and signaling a return to a business leader in the same vein as former governors John Hoeven and Ed Schafer.

Remember, neither Hoeven nor Schafer had political experience prior to taking over as governor, but were both well-known business leaders.

So now it’s time for Burgum to do what his Republican outsider counterpart on the national level can’t seem to do — unite his party (and others outside of it) behind him.

Then, should he win in November, he needs to make sure his money was spent wisely and actually do something to help North Dakota.



Simons, Schatz Win GOP Nomination in District 36 House

The two Republican Party-endorsed candidates for District 36 House of Representatives are moving on to the general election.

Rep. Mike Schatz and Luke Simons gained the party’s nominations on Tuesday, each garnering more than 1,800 votes in a three-person race.

Rep. Alan Fehr, who did not receive the party’s endorsement during the district convention, will not return the Legislature next session after finishing third in the voting with just over 1,200 votes.

Simons, a rancher from rural Dickinson and a self-described Constitutionalist, received the party’s nomination earlier this year over Fehr.

He said he has spoken with several people on the campaign trail who agree with allegiance to the U.S. Constitution and conservative Christian philosophies.

“I think I’m explaining some principles we used to hold to be self-evident to a lot of people,” Simons said.

Schatz, a retired teacher and football coach from New England, said it was the most interesting race and first contested primary he’s ever been a part of.

There was a lot of time and effort put in by everybody,” Schatz said. “I want to thank Alan and Luke for being such gentlemen during the campaign. It was a well-run primary.”

Fehr, a Dickinson psychologist and retired U.S. Navy officer, said he was grateful for the opportunity to serve in the Legislature over the past four years, and for the people who supported him.

“It’s one of those things that a lot of people don’t have the opportunity for, and I’m grateful for the opportunity,” he said. “I learned a lot doing that and it was a great experience.”

Sen. Kelly Armstrong, the state Republican Party chairman, ran unopposed in the primary.

On the Democrat-NPL side, Senate candidate John D.W. Fielding received just 224 votes while running unopposed. House candidates Dean Meyer and Linda Kittilson received 208 and 207 votes, respectively, to move on to the general election.

Watch: Trump answer our questions

Forum News Service reporter Amy Dalrymple, who is a lot smaller than me, were front-row at the Donald Trump press conference Thursday. In a room full of national and state media, Amy kept getting overlooked by Trump. So, she showed me the question she wanted to ask and, moments later, the Republican presidential candidate pointed to me and I asked what the federal government’s role should be in the oil industry.

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Toward the end of the press conference, I had the chance to ask him what North Dakota Congressman Kevin Cramer’s role would be in a Trump administration, as Cramer has been eyed as something of an energy advisor by Trump. While Trump didn’t answer that question, it created an interesting moment where Trump brought Cramer to the podium to speak in front of the national media.


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This is everything we compiled from Trump’s visit to North Dakota, including the protests outside.

Holtz motivates energy conference in leadup to Trump

BISMARCK — Lou Holtz joked Thursday that the last time he was in North Dakota, oil was $100 a barrel and he wasn’t homeless.

The former college football coach and ESPN commentator, who lost a Florida home in a fire last summer, encouraged energy industry leaders and workers to take the recent oil downturn in stride during a speech preceding Republican presidential candidate Donald Trump’s appearance at the Williston Basin Petroleum Conference.

“Quitting is a permanent solution to a temporary problem,” he said. “Until you fly on solar energy, oil is going to continue to be very, very important.”

Holtz, a former board member for Watford City-based Nuverra Environmental Solutions, only lightly touched on energy in his speech and went through standard motivational material that has made him a sought-after speaker nationwide.

Holtz peppered multiple jokes throughout his 40-minute speech. His few moments speaking about oil were tied into his motivational theme, and for a moment, Holtz even got political.

“We all have injustices done,” he said. “It would bother the daylights out of me in this oil business, where our government subsidizes all kinds of fancy things and puts all kinds of restrictions on me. But you can’t be bitter about it.”

Continue reading “Holtz motivates energy conference in leadup to Trump”