As Bismarck, ND prepared this week for another Williston Basin Petroleum Conference (Tuesday-Thursday), North Dakota oil/natural gas stakeholders continued to deal with the longer-term economic impacts from low commodity prices: thousands of job losses, reduced public sector tax revenues and the need to keep some economic momentum.

The state and local communities rode a bubble of five to eight years of unprecedented growth turning the state into the nation’s biggest oil producer after perennial champ Texas.

From the state’s and the industry’s standpoint, it has been jobs and tax revenues that have had the most immediate impact from the slowdown, but longer-term ramifications involve a broader souring of the mindset and momentum that had built up in local communities around the oil/gas boom, said Lynn Helms, director of the state Department of Mineral Resources and the state’s chief oil/gas regulator.

“If you look out just the next two years, we are on the brink of losing interest in housing investment and the momentum of local communities being really engaged in growth, planning and all of that,” Helms said. He noted that for years these local areas in the heart of the Bakken were struggling to bring services up to speed, and they were just beginning to make real headway when the global oil price crash hit two years ago, albeit with somewhat of a delayed impact on production in the state compared to other areas.

“The trough now is obviously deeper and longer, and that has caught everyone by surprise from OPEC on down to the local level here,” he said. “There is a danger now that we won’t just get caught up, but that we’ll lose momentum, and will be overwhelmed by the next price increase.” Helms added that the situation is particularly bad in the workforce area when areas need to restock their labor pools and there is no momentum to bring people back.

Ron Ness, president of the North Dakota Petroleum Council (NDPC), said the price crash has put a lot of Bakken producers under financial distress and eliminated 25,000 jobs, many of which were held by transient oilfield workers who have left the state. “The Bakken is a huge capital play, extremely capital-intensive, and many operators were heavily leveraged, so [with the price crash] access to that capital dried up quickly. And now the service companies that relied on all those production contracts are struggling.”

While the numbers of bankruptcies among operators is not high (four or five at last count), it has been the recent $10/bbl rise in oil prices that has probably kept some out of Chapter 11 for now, Ness said. “In January and February, producers were losing dollars on every new barrel, and now on the barrels produced they can put a few dollars in their pockets,” he said, adding that $47-48/bbl oil is looking pretty good compared to $30/bbl early this year.

Nevertheless, Bakken producers continue to see this year as being a tough year with prices below the $60 level needed to drive economic recovery, Ness said.

With so much of the state’s oil/gas workforce being from out of state, Helms and others worry about the potential momentum loss over all of this year. “We’ve had an extremely high rig count decline, and this has resulted to a loss in jobs among the transient folks — the rig crews, truck drivers and fracking crews,” Helms said. “The big question mark is how easy [or hard] it will be to attract that work force back.”

When prices do turnaround both Helms and Ness expressed concerns about the ability for Bakken producers to taken advantage of the higher prices because of the uncertainty of the labor force to ramp up production again. They both see the price weakness continuing through this year with prospects for moderate recovery next year.