Oil-field worker shortage affecting industry comeback in North Dakota

A shortage of oil-field workers is threatening the North Dakota petroleum industry's continuing recovery from the COVID-19 crisis.

That was the word Tuesday from Lynn Helms, North Dakota's mineral resources director, as the state released anemic gains in oil output for May.

Oil companies "are trying to hire with all their might, but they are not finding employees in the industry who want to come back," Helms said, referring to oil-field workers who left North Dakota after oil jobs dried up in 2020.

North Dakota pumped 1.13 million barrels of oil per day in May, up less than a half percent from April. "It was a flat as a pancake," Helms told reporters. Natural gas production was up 1% during the same time.

The lethargy was surprising, he said, given that seasonal road restrictions in the oil fields had been removed by May — and crude prices were rising as the economy grew.

West Texas Intermediate (WTI) — the benchmark U.S. oil price — stood at an average of $65.06 a barrel in May, up from $61.65 in April. WTI rallied as high as $75 last week before falling and closing Tuesday around $67.

North Dakota's drilling rig count rose from 15 to 19 from April to May. It stands at 23 today, a growth rate that Helms called "very slow." The drill rig count is an indicator of new production.

Helms said North Dakota only has eight fracking crews at work; at current oil prices, normally there would be 20 to 25. "We continue to see serious problems with fracking crews."

When U.S. oil production plummeted in the spring of 2020 — a reaction to the economic downturn caused by the coronavirus pandemic — oil-field hands were laid off throughout the country. Many of those workers left North Dakota.

And "they are slow — if at all — to come back," Helms said.

The shale oil industry in Texas and New Mexico have come back stronger than North Dakota, absorbing oilfield workers. And those workers might also prefer the warmer climates of the southwest to North Dakota.

"There's some concern that this could be a long-term trend," Helms said, adding that "it will take some pay and housing incentives" to lure oil-field workers back to North Dakota.