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AS I SEE IT

Posted 4/03/13 (Wed)

By Neal A. Shipman
Farmer Editor

Now that the North Dakota Legislature is moving into its final weeks of the session, there is still one bill very much alive which could bring much needed state dollars to help cities and counties in the oil-impacted areas of the state. And that bill is HB 1328, which was drafted by Rep. Bob Skarphol of Tioga.
Under Skarphol’s bill, which has already passed the House and received a very warm reception in the Senate Finance and Taxation Committee, $284 million would be made available to help cities, like Watford City, and counties, like McKenzie County, begin to meet some of the huge demands for infrastructure improvements that they are facing to meet a growing population.
Considering that under the current formula there was only going to be about $140 million in state aid available in 2014 to help the cities and counties that are being impacted by the tremendous demand for growth, the possibility of having an extra $140 million available is some of the most welcome news coming out of this legislative session. It is finally a true sign that the North Dakota Legislature has come to the realization that the impacts of the growth in the oil and gas industry are going to forever change the face of many of the counties and cities in the oil patch, and that the state of North Dakota has a financial obligation to help these counties and cities plan for the biggest challenges that they have ever faced.
While increased funding will help our cities and counties, more importantly, Skarphol’s bill is also setting aside money that can be used to help schools that are facing unprecedented enrollment growth, as well as for the first time will provide direct funding to townships, EMS services, fire departments and sheriff’s departments.
House Bill 1328 is a huge step forward to helping oil-impacted cities and counties meet their needs. But the bill is also the first real attempt by the Legislature to return a larger portion of the oil and gas revenues that the state is receiving directly to those counties and cities that are being literally overrun by all of the proposed development.
And there is no doubt where the impacts of the oil development are being felt. While there are currently 17 oil-producing counties in North Dakota, that does not mean that the impacts are being felt equally among those counties. In fact, the heaviest impact of all of the oil activity in the Bakken has been, and continues to be, pretty much concentrated to just four counties - namely, Williams and Mountrail on the north side of the Missouri River and in McKenzie and Dunn on the south side of the river.
How concentrated is this activity? The numbers say it all. During the month of October 2012 there was just over 20.6 million barrels of oil produced in the 17 oil-producing counties of North Dakota. However, of those 17 counties, four (McKenzie, Williams, Mountrail and Dunn) accounted for 84.37 percent of the total oil production. To take those numbers one step further, in oil-producing counties that lie in the area south of the Missouri River, McKenzie County, which produced 4,852,969 barrels of oil this last October, accounted for 50.4 percent of that region’s oil production, while Dunn County, which produced 3,152,074 barrels, accounted for 32.75 percent. For those oil-producing counties that lie north of the Missouri River, Mountrail County, which produced 5,855,725 barrels in October, accounted for 53 percent of that region’s production, while Williams County produced 3,570,825 barrels or 32.36 percent.
The obvious conclusion that people will hopefully recognize is that a very significant percent of the funding that is going to be forthcoming with HB 1326 needs to flow to these four counties.