As the coronavirus (COVID-19) pandemic spreads across North Dakota, some industries on the Western Edge struggle to maintain staff and employees.
The free falling oil prices only further exacerbate the economic woes of Dickinson as layoffs and site closures in the Bakken are reminiscent of the most recent collapse in 2015.
"These prices clearly are much below the revenue forecast," Lynn Helms, director of the North Dakota Department of Mineral Resources, said in his monthly briefing on oil production and outlook on Tuesday, March 17.
Helms added that prices are currently about $20 per barrel below the forecast used to set the current state budget.
While the rig count in the Bakken hovers in the 50s, it is expected to be down to the low 20s within the next three months according to Helms.
The energy industry isn't alone in their troubles brought about by the virus pandemic sweeping the globe. Unemployment insurance rules were relaxed following an executive order signed by North Dakota Gov. Doug Burgum last week as many industries and small businesses are facing layoffs and closure.
North Dakota Job Service officials in Stark County shared with The Press predictions that have significant increases in the number of claims filed in the last two weeks and well into the foreseeable future.
Initial unemployment claims statewide for the week ending March 7 sat at 508, but those numbers continue to climb at unprecedented rates — with local impacts being felt in Dickinson by some of its largest employers.
“Absolutely the global virus pandemic combined with an oil price collapse have taken a toll on many companies, industries and families in particular,” Paul Eidenschink, co-president of Steffes, said. “It’s absolutely something we are facing today. ... This week we did go through a layoff and were forced to rightsize operations to match the business levels we are seeing today and in the near term.”
Steffes wouldn’t disclose the numbers of layoffs resulting from the economic downturn following the pandemic. Regarding any potentials on ceasing or temporarily suspending operations, Eidenschink said that it was a fluid situation being closely monitored by executives hourly.
“We are really looking at a number of things with the spread of the virus,” Eidenschink said. “Our first priority would be for the safety of our employees, that is something we are looking at. Of course we want to take care of our customers and preserve the business, so we are monitoring the situation. We are watching the market and keeping a close eye on that today.”
Should Gov. Doug Burgum enact similar mandates to neighboring states of Montana and Minnesota with a complete non-essential employee shut-down of the state, Steffes said that they would certainly comply with any guidelines issued by executive order.
“We see all our employees as essential and certainly see this as short-term and temporary, are are most concerned about the impacts to our families. We don’t just see them as employees, we see them as people and the human impact is the most important to us,” Eidenschink said. “Whether we are considered essential manufacturing or not, there are certain definitions and we would need to look into that. We are going to make those choices on the safety of our employees, the needs of our customers and the preservation of our business.”
Addressing the layoffs, Eidenschink wanted to be clear that the decisions made were the result of the tremendous economic impacts facing many industries, including manufacturing, and not reflective of the quality of work performed by those former employees.
“The people that were released for productive, hardworking employees who contributed a great deal to the company over the years. We are just appreciative of them and we are faced with the reality of the market,” Eidenschink said. “We are going to try to preserve our business so that we can employ the most amount of people that we possibly can and give them a bright future.”
Other major employers contacted for the story were unavailable for comment, including Killdeer Mountain Manufacturing and TMI Systems Corporation.