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Burgum: Goal of doubling oil production in North Dakota 'may be too low'

North Dakota Gov. Doug Burgum speaks Wednesday at the Alerus Center in Grand Forks during the North Dakota Petroleum Council meeting. April Baumgarten/Forum News Service

GRAND FORKS, N.D.—North Dakota Gov. Doug Burgum's goal to double North Dakota's oil production may have been too low, he said Wednesday in Grand Forks.

"People might say, 'Hey, that is a big dream. That's too far away,' " Burgum said of his challenge to the oil industry. "The world can change pretty quickly."

Burgum made the comments in a nearly hourlong speech during the annual North Dakota Petroleum Council meeting at the Alerus Center. In July, he challenged the oil industry to bring the state's production from roughly a million barrels a day to 2 million barrels a day.

But after hearing the enthusiasm from earlier speakers, including state Department of Mineral Resources Director Lynn Helms, Burgum said his initial challenge might be too low.

"You can just see the rate of change in technology," he said of the oil industry.

The goal was set to "aspirationally challenge" the industry to think about the next milestone, Burgum said after his speech. Research and further advances in technology are keys in reaching that benchmark, he said.

"We don't get there by doubling the number of wells," he said. "We get there by getting more production per well."

He said he didn't have an updated number in mind, nor did he offer any specific strategies to make the goal.

North Dakota is in competition with other oil plays in the country, including the Permian Basin in Texas, which has lower taxes than North Dakota.

When asked if he would be in favor of lowering the oil extraction tax, Burgum said the state needs to look at a holistic view to be competitive with other oil plays in attracting oil drillers.

"We have to look at everything," he said. "The tax rate is only one of those elements."

The goal is not legislation, Burgum said during his speech. He also noted criticism that he didn't collaborate with the oil industry before announcing the goals several months ago.

"I'm all for listening. I'm all for input," he said. "This is an industry. You're a private sector. You guys get to decide if your businesses really want to grow, stay the same, shrink, sell. You get to do what you want to do. That's the beauty of the private sector.

"I'm just standing in the back over here and saying as a state what we want to do, what would the state be able to do."

The meeting also included two speakers with ties to President Donald Trump.

The U.S. Department of Interior is going through a transformation to change the culture, said Vincent DeVito, counselor on energy policy for the agency.

"The Department of Interior being a better business partner for investors, those that want to develop on federal land, is the key to our strategy to energy dominance," he said, adding his department is focused on responsibly developing federal land.

Todd Leake, of the Sierra Club's Dacotah Chapter, questioned that move, saying the department is trying to sell public land and is treating North Dakota "like a Third World country."

"They are going to take all of our resources and leave us with ... a mess," said Leake, who lives in rural Emerado, N.D. "That's all that has happened in North Dakota. We're broke. We're in distress. It's the curse of oil."

His comments drew boos from the crowd, with DeVito informing the farmer there would be an opportunity to ask questions after his speech.

The Sierra Club issued a news release ahead of DeVito's visit to North Dakota, calling on the Interior Department to keep in place rules that reduce flaring and natural gas waste. There have been attempts in Congress to repeal and rewrite the rules.

Another audience member appeared to criticize DeVito, saying his business model would increase carbon emissions and put food sources in danger.

When asked by the audience member what the U.S. would do when it ran out of oil, DeVito referred to other claims the U.S. would run out of oil by 2000.

"Guess what, it didn't happen," he said.

Stephen Moore, an economic analyst who served as a policy adviser for Trump during the presidential campaign, lauded North Dakota's energy sector, saying American oil and gas output is soaring. He criticized efforts by President Barack Obama and his administration to promote renewable energy.

"I'm not against renewable energy, I just don't think the government should be subsidizing it," he said, calling for a level playing field in the energy sector. "We should let the free market work. If coal is cheap, we should use that."

April Baumgarten

April Baumgarten joined the Grand Forks Herald May 19, 2015, and covers business and political stories. She grew up on a ranch 10 miles southeast of Belfield, where her family continues to raise registered Hereford cattle. She double majored in communications and history/political science at Jamestown (N.D.) College, now known as University of Jamestown. During her time at the college, she worked as a reporter and editor-in-chief for the university's newspaper, The Collegian. Baumgarten previously worked for The Dickinson Press as the Dickinson city government and energy reporter in 2011 before becoming the editor of the Hazen Star and Center Republican. She then returned to The Press as a news editor, where she helped lead an award-winning newsroom in recording the historical oil boom.

Have a story idea? Contact Baumgarten at 701-780-1248.

(701) 780-1248
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