In response to rapidly increasing gas prices, the Montana Petroleum Association announced that wells in the Bakken oil fields are officially going back online.
Experts say inflation, regulations, and lack of additional oil resources, such as those that would have been supplied by the Keystone XL Pipeline, sparked the gas price explosion.
Biden exacerbated the problem by imposing sanctions on Russia and banning Russian oil exports.
As The Western Journal reported, it’s time for American oil producers to step up:
Alan Olson, executive director of the Montana Petroleum Association, told The Western Journal that up until this point, federal regulations have prevented many oil companies from producing oil.
Thanks to rising prices, oil producers can now cover that cost, making drilling worth it again.
Montana just told Joe to shove it, and is drilling anyway
— Wayne Dupree Media, LLC ⭐️ (@WayneDupreeShow) March 11, 2022
KTVH cited the challenges laying ahead for the Montana Petroleum Association:
With oil prices surging, Montana Petroleum Association says oil wells are going back online in the Bakken oil fields. But the lack of personnel and a shortage of supplies provides a challenge to the industry.
Alan Olson, executive director of the Montana Petroleum Association, says that at around $80 a barrel the Bakken oil fields become more stable between costs and profits. So, at current prices, the Montana Petroleum Association is seeing a growing interest in restarting idled wells in the Bakken oil fields in eastern Montana.
However, a lack of workers and supply chain shortages getting oil flowing again has presented quite a challenge.
“We are scrambling to find good employees and at the same time we’re still on the hunt for equipment,” says Olson.
When oil prices nose-dived due to the Covid-19 pandemic, Montana Petroleum Association says their member companies were forced to let go of employees. Now that the oil price is rising rapidly, it’s been a challenge to hire new employees due to record low unemployment numbers in the state.
Additionally, items such as well casing, production tubing, workover rigs, and oil rigs are a lot harder to get their hands on because of supply shortages.
“The uptick in the economy with the downturn of the industry; it kind of turned into a perfect storm,” says Olson.
Olson relayed further concerns to The Western Journal:
In addition, Olson said that as producers began to increase production, federal regulations soon to be implemented by the Biden administration are creating a lot of unpredictability in the industry.
“There’s a lot of uncertainty that the industry is facing with upcoming new federal regulations,” he told The Western Journal. “You know, we had a lot of discussion over the methane fee that was part of the Build Back Better bill.
“I mean, that would have hammered the small producers. Actually, it would have hammered everybody.”
Hamstringing small producers with hefty regulations is a big deal, especially considering states like Montana “no longer have any of the major oil companies producing oil,” Olson explained.
“We’ve got a lot of very small, independent oil producers that, to meet up with some of the proposed new federal regulations, it’s going to leave them with a couple of choices,” he said.
“You either bite the bullet, spend the money, take it off your bottom line — which will cost jobs, which will also cause revenue to state and local government coffers — or you plug your wells and walk away from them.”