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Legislators tour state’s oil patch

Posted 9/02/14 (Tue)

By Stephanie Allums
Farmer Staff Writer

The Legislative Tour through the Bakken, sponsored by the North Dakota Petroleum Council, was running at least one hour behind schedule due to travel delays and traffic last week.
“Gene Veeder won’t admit this, but he was hoping that you guys would get stuck in this traffic,” said Ron Ness, president of the North Dakota Petroleum Council.
As the tour bus carrying about 35 state legislators was approaching Watford City, near Highway 23 on Tuesday, Aug. 26, around 6:15 p.m., it sat in traffic for nearly 45 minutes. It took nearly half an hour to travel about four miles.
“You have to sit in traffic for a while around here,” said Gene Veeder, executive director of the McKenzie County Job Development Authority. “Maybe in the next five years we will start to see a little less traffic.”
The purpose of this two-day tour was to show the legislators what is going on in Watford City and McKenzie County. The North Dakota oil fields are producing more than ever before - ranking the state as second in the country for oil and gas production.
The local government leaders in McKenzie County and its towns are hoping for a change in the oil and gas production tax revenue.
“A formula change to 60 percent county, 40 percent state is absolutely necessary to put our county back together,” Chairman of the McKenzie County Board of Commissioners Ron Anderson said.
Currently, the state collects 75 percent of the billions of dollars in oil and gas tax revenues, and 25 percent goes back to local governments.
In order for the legislators to make an educated decision on this topic, the local governments thought it would only be fair for them to get a taste of the Bakken life. So they brought them on this tour.
“We want the legislators to see what we’ve already done with the funding we have received from them in the past. And we want them to see what our needs are for the future,” Veeder said. “We want them to understand the industry and what’s going on here.”
Veeder said the goal is to get as many legislators as possible here to tour and understand the problems the city and county is facing before the 2014 winter legislative session, at which time the decision will be made to allow for more of the tax revenue to come back to the oil-producing counties.
“I will personally show them around,” Veeder said. “There are so many myths and stories about the oil fields. But you have to see this in person in order to understand what’s happening here and appreciate it.”
During the tour, the legislators from all across the state of North Dakota got to see a frac site, a well site, a drilling rig and the ONEOK Garden Creek gas processing facility.
QEP Resources, a leading independent crude oil and natural gas exploration and production company, has many active sites in McKenzie County. They welcomed the tour group to their sites for visual and verbal explanations as to how the oil industry functions.
“This was a great chance to bring lawmakers to the locations where they can look at a drill bit, frac sleeve, and work site location to see and ask questions,” said Lynn Welker, Stakeholder Relations advisor for QEP Resources. “When you bring folks on location, it helps them understand how we operate safely every day and see the size of the equipment.”
At the QEP rig site, there were models of the equipment that is used to drill deep into the earth for the legislators to touch, feel and see so they could truly grasp and understand what these oil companies are doing in the oil fields on a daily basis. Representatives took the time to verbally break it down and explain the process; how they do it and why they do it. Many legislators asked questions and engaged in conversations with QEP representatives and rig workers.
“It’s impressive to see this first-hand,” Tom Campbell, a District 19 legislator, said. “The pictures that I’ve seen don’t do it justice. I definitely have a different frame of mind than I did two years ago.”
Rich Wardner, a District 37 legislator from Dickinson, said, “I am pleased with the presentations that they are making here. It’s making it real to us.”
When the legislative session begins this winter, maybe the legislators who participated in this tour will take back some of their gatherings and knowledge of the oil fields when making decisions based on where funding is going.
“I am here because I live in the oil patch,” said John Andrist, a legislator from Crosby. “I want to help other legislators interpret what’s going on.         There is no place like Watford City. It’s ground zero in the oil patch. It’s something you can’t really conceive - trying to figure out how to survive here.”
Emily Thompson, a member of the Legislative Council, said that she has been told that Watford City is “the worst of the worst.”
“It’s maybe not as bad as I was expecting it to be, but I haven’t seen it all either,” Thompson said. “It’s good to see the whole picture and get a good idea for myself of what it’s like here and how things work.”
A lot of the legislators that attended the tour seemed to have a pretty open mind and were willing to listen and learn more. There were also a few that made comments stating otherwise.
One man on the bus said, “This traffic is no different than how it is on the other side of the state.”
The difference is that in other parts of the state, there are major four-lane highways and interstates that run through the towns and cities. But Watford City roads were only built for the population of five years ago - 1,400 people, not 20,000 people.
“I’ve been up and down these roads at 25 mph many times,” State Representative Keith Kempenich said. “You really get to know these roads well. If you get two or three semi trucks blocking traffic, then it slows everyone down. They really needed to widen the two lanes to four lanes.”
“You just cannot express it enough,” Ness said. “Look at all of these trucks. If you need to run into town for groceries, it’s a waiting game. The trucks just have nowhere to go right now.”
The state is working on a record-breaking amount of road construction this year, and a lot of it is happening right here in McKenzie County. With the influx of truck traffic, it’s essential to have more room on the roads for other vehicles and reliable roads for safe driving.
“It’s interesting how traffic patterns have panned out over the past few years,” Veeder said.
“I see a lot of traffic and beat-up roads here,” said Patrick Hatlestad, a District 1 legislator from Williston. “This small community has exploded. It’s really an eye-opener for a lot of people.”
The more oil being produced, the more trucks will be needed, according to Kent Pelton with QEP Resources, who also lives in Watford City. If more pipelines were utilized, then maybe truck traffic would begin to decrease.
“Hopefully, the day will come that we don’t have so many trucks on the roads,” Pelton said.
“Getting pipelines in the ground typically lags behind drilling and production,” said Cory Miller, QEP general manager of the High Planes Division. “It will catch up eventually, and take truck traffic off of the roads to an extent.”
As the tour bus traveled though the county, it passed by countless wells and rigs. It’s like meeting someone from another state who is here working in North Dakota. They are all over - much like oil rigs and wells.
“We’re not littering the state with oil wells any more than we are littering the state with grain bins,” said Jerry Klein, a legislator from central North Dakota. “It’s amazing what’s happening here. The Legislature needs to reach out in some way.”
David Drovdal, District 39 state representative, said, “No matter what direction you go, you’re going to run into oil.”
At the end of the day, after many miles on bumpy dirt roads, the tour bus made its way to the Target Logistics crew camp where the legislators would camp out for the night. But before going to sleep, they had one more thing to do on their agenda.
The had a barbecue dinner at the Whiting Petroleum Office in Watford City, at which time many local community leaders welcomed them and shared stories of small town issues and the oil industry.
“It was very positive on our end,” Veeder said. “It was great to meet our state leaders and put a face with a name.”
“I hope that a lot of fellow legislators who haven’t lived in the western part of the state understand the industry and its impacts,” said Gary Sukut, District 1 representative. “No matter how much you may know, there is always more to learn.”
According to reports from the North Dakota Petroleum Council, the oil boom has shifted into an industry, and it shows signs of continuing for decades to come.
In 1951, the state’s first successful oil well was drilled in Tioga. And oil has been produced continuously since then.
“The life of an active oil well is much like a person’s life,” Pelton said. “Each one lasts for a different amount of time. We try to get about 25 years out of each well, but some last longer than others.”
It was recently that technology has accelerated the production rate - particularly horizontal drilling and hydraulic fracturing.
“It’s amazing that they can drill two miles deep and two miles over, make it go ‘bang’ and then here comes the oil,” Hatlestad said. “There is always something new to learn.”