Herald editorial board
Gov. Doug Burgum on Wednesday repeated his challenge to the North Dakota oil industry, urging it to reach at least 2 million barrels of oil production per day. The governor's comments came during the Bakken 2.0 conference, where hundreds of industry leaders gathered to discuss energy production.
We like that the governor has issued the challenge. We wish, however, there was more behind it. When asked after the speech if he had specific ideas in mind to help spur the development, the governor said "we have to look at everything."
That was Wednesday.
On Tuesday, the day before Burgum's speech, the Herald editorial board hosted North Dakota Petroleum Council President Ron Ness. He referenced Burgum's original challenge, which came earlier this year.
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"A governor who puts out a goal of doubling oil production, and a president that wants to produce oil - that means a lot to boardrooms," Ness said. "Knowing that North Dakota wants you to grow your production means a lot to the climate."
At present, oil production in North Dakota is around 1 million barrels per day. The high-water mark for production was three years ago, at around 1.2 million. The decline came with the decrease in price - from $100 per barrel to around $45 - which resulted in a decline in rigs.
Ness was asked Tuesday if the governor had yet given specifics on the challenge. No, he said, "but we'll see what he has to say (Wednesday). My sense is that it's an open challenge."
When Burgum again referenced the challenge Wednesday, he still didn't give specifics. We think he should, and we think he's justified in providing some sort of aid or incentive to help achieve his challenge for more oil, which has proven so lucrative to the state's economy.
Our preference? State investment in research, and specifically at UND.
The extra oil exists in the Bakken, and the next great boom will occur when the price rebounds, or on the heels of another technological breakthrough. Fracking, after all, was the breakthrough that spurred the Bakken boom in the first place.
As an example, Ness said agriculture technology developed at North Dakota State University has redefined the ag industry.
"It changed the way we produce crops, and that all came out of NDSU," he said.
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UND, through its Energy and Environmental Research Center and Department of Petroleum Engineering, already is a leader in oil-industry technological development. More state funding could speed up the release of new technologies, several of which already are being tested in the field.
It could lead to enhancements in oil recovery, getting more oil out of the ground and increasing profit. The improved return on investment would better protect the industry-and the state economy-against future cyclical price swings.
Tax incentives to the oil industry probably could help, too, but more breaks for the oil companies might not float with North Dakotans.
Incentives for the state's flagship university to speed development of new and innovative oil-field technologies?
That's the better method.
