August 19, 2014

Legislators get a taste of the oil boom

By Stephanie Allums
Farmer Staff Writer

It’s not often that grown-ups take ‘field trips,’ but when they do, they go all out.
More than 40 North Dakota legislators are making their way to McKenzie County for a two-day tour of the Bakken sponsored by the North Dakota Petroleum Council on Tuesday, Aug. 26. They will get to see firsthand what life is like in these oil booming towns.
For the same reason that children take field trips - to learn about new places and how things work, these legislators are visiting the Bakken to hopefully better grasp and understand why these oil and gas-producing counties are financially struggling and need help.
“The tour is important because it gives legislators a firsthand view of the industry and the impacts on some of these communities as they work to accommodate the growth,” said Ron Ness, president of the North Dakota Petroleum Council. “Legislators are able to see for themselves that oil and gas development is taking place in a safe and responsible manner. And to see what kind of resources communities like Watford City and throughout western North Dakota need to accommodate the population growth that is associated with the tens of thousands of jobs supported by the industry.”
McKenzie County and Watford City government leaders are hoping that this tour will open the eyes of the legislators and consider the importance of a drastic shift in the oil and gas tax revenue disbursement. They would like to see a 60-40 split in favor of the local governments.
Currently, only 25 percent of the tax revenue goes back to the oil and gas-producing counties and the state keeps the remaining 75 percent.
“We are looking for 60 percent this legislative session due to the continued underfunding of the necessary road and housing infrastructure in the oil-impacted areas,” Watford City Mayor Brent Sanford said. “We are hosting 40 percent of the state’s drilling rigs and producing 30 percent of the state’s oil. The impacts are intense in our area. We need the legislators to experience it firsthand and have the visual examples in their minds as oil impact bills come through the session this winter.”
During the tour, the legislators will tour a hydraulic fracturing site, a well site, a drilling rig and a reclaimed well site.
QEP Resources, Inc. is allowing the Petroleum Council and the legislators access to their sites for them to learn more about the industry. QEP is a leading independent crude oil and natural gas exploration and production company. They have numerous sites in North Dakota, as well as in other states.
“We feel it’s important to show state legislators what we do as the oil and natural gas industry is vital to the state,” said Lynn Welker, Stakeholder Relations advisor for QEP. “This is a good opportunity to showcase our operations, our record of responsible oil and gas development, and how QEP contributes to the community.”
Welker said QEP is glad to be a part of the western North Dakota legislative tour.
“They will also receive a tour of Watford City to see where it has grown and what its needs are to consider its growth in the future,” Ness said. “It’s important for them to meet, visit and get a guided in-depth tour of the challenges western communities are facing with rapid growth.”
Expansion and growth is good, but when it happens at an accelerated rate, it can also cause damage - much like a water balloon. As water is added to the balloon, it will continue to expand. But when too much water is added too quickly, it bursts and becomes garbage.
McKenzie County’s population has been increasing for the past several years. But people are coming quicker than the updated infrastructure. If the county cannot financially catch up, it’s going to be too late; the county will reach a point of not being able to move forward.
“If we cannot convince the Governor and the Legislature of our needs this time around, I feel it will be too late,” McKenzie County Commission Chairman Ron Anderson said. “Two years down the road the bill to rebuild our infrastructure will be so large that no one will look at it seriously. These four counties, McKenzie, Dunn, Williams and Mountrail, will become throw-away counties.”
The funding that McKenzie County has received in the past has been put to good use, Sanford said. It’s just not enough.
“We hope the legislators leave with a better awareness of the subpar living conditions and poor road conditions that are persisting due to the continued underfunding of the impacts,” Sanford said. “We would like them to leave here with specific examples of projects completed with their support in previous sessions. And hopefully, they also see that we are making progress with new housing and public buildings.”
Although the local governments and residents are looking forward to the legislative tour through the Bakken, there only seems to be one complaint; two days is not long enough to get the full effect.
“I wish they could spend a week here because it’s hard to get a feel for our problems on a two-day tour,” Anderson said. “Try to get to work in the morning and get home at night for five days in a row - that would be quite an eye-opener for most people that are not from this area.”
“I hope we can convince them that we are falling further and further behind, not only on the roads, but in all aspects of county government - law enforcement, social services, public works and so on,” Anderson continued. “We have to convince them that we need more of the tax revenue that is generated here to put this county back together.”
When the legislative session comes around this year, many western North Dakota local governments will be watching and waiting for a final outcome. The future of the Bakken infrastructure is in the hands of the state lawmakers and legislators.
“We hope they can grasp the immediate need for more of the oil and gas tax revenues to be returned to the producing counties, which will be our primary focus this session,” Ness said. “We will support the final plan that comes forward in a unified effort.”