Will President Obama try to sell this oil to China?

Industry rises to challenges generated by North Dakota’s oil boom

By: Ron Ness

INFORUM

For generations, North Dakotans have been seeking to grow and diversify the state’s economy, create good-paying jobs and retain young people. Today, thanks in large part to the development of the Bakken oil reserves, we are beginning to realize the dream of making North Dakota an economic powerhouse and providing a brighter future for ourselves and our children.

The oil industry has already created more than 30,000 good-paying jobs, and our state’s per capita average income exceeds the national average for the first time in decades. We have added $12 billion in annual economic activity to the state, and we pay more than $1 billion in taxes each year. And all indications are that North Dakota will enjoy continued growth for years to come.

Challenges

There is no question that this growth has also created challenges. To realize our state’s true potential and provide long-term economic success, we must address these challenges head-on. The oil and gas industry is working aggressively to provide immediate and long-term solutions.

To reduce vehicle traffic, we are investing billions of dollars in pipelines and rail transportation facilities. The Keystone XL pipeline alone would take almost 500 trucks off the road every day, and a new pipeline in McKenzie County will take another 300 trucks off the road per day. Companies continue to lay new pipelines, and each one will further reduce truck traffic.

To improve traffic safety, the state of North Dakota is investing more than $1 billion in oil tax revenue to build roads and critical infrastructure across the Oil Patch. Highway patrols and truck inspections have increased significantly in oil country. And the state has sharply increased direct aid to affected counties, cities and townships in and around the Oil Patch. The oil industry is also working closely with counties to develop traffic corridors and to help maintain those roads affected by truck traffic.

To improve the housing crunch, our industry has brought in temporary housing for thousands of workers. Oil companies have invested more than

$3 million for low-income housing. And, most importantly, housing developers are constructing thousands of new homes and apartments across western North Dakota.

Environment

To reduce the impact on the environment and wildlife, the oil industry is working to ensure that responsible protections are in place. All oil production in North Dakota is from formations miles below freshwater supplies, and wells are designed to protect the environment. The industry is spending $3 billion to capture natural gas and reduce flaring. New drilling techniques allow for multiple wells on a single pad location, reducing the environmental footprint. And, as a sensible precaution, the industry has established a rapid-response unit should accidents happen.

The industry also supports new North Dakota Industrial Commission rules that require drillers to use a dry cuttings pit system that eliminates open wastewater reserve pits, a bonding fee increase, reasonable regulatory changes to well cementing and well design, and public disclosure of chemicals used during the hydraulic fracturing process. Twenty-three newly adopted state regulatory changes will add significantly to the industry’s cost for well development but will ensure that responsible environmental protections are in place.

Results

In the coming months, you will begin to see the results of the billions of dollars our industry is investing in North Dakota. Not only will you see continued economic growth but development of the infrastructure necessary to support that growth.

As we rise to the challenges brought about by growth, let’s not lose sight of all that we have gained. North Dakota’s new prosperity is the envy of the nation. While many states are mired in an economic malaise, our state is thriving. North Dakota has the resources to deal with the challenges of our growth, and our industry’s investment in the state is also helping to educate our children, reduce property taxes, provide flood relief, and build and improve our roads and other critical infrastructure across North Dakota.

The opportunity for a better life is the reason why thousands of people are streaming into North Dakota. And the opportunity presented by the Bakken will provide a brighter future for all of us.

Ness is president of the North Dakota Petroleum Council.