Lower State Revenue Forecast; More Budget Trimming to Come

North Dakota legislators received new tax revenue projections this week, and the numbers weren’t good.  The forecast shows a $46 million shortfall in the current biennium, and $103 million less in general fund revenue for the 2017-19 biennium.

The state Office of Management and Budget predicts oil prices of $47.50 per barrel for the next biennium, with production of 925,000 barrels per day in the coming year, and 950,000 barrels per day after that.

House Appropriations Committee Chairman Jeff Delzer, R- Underwood, said he wasn’t surprised by the figures, but he thinks even the lower revenue number may be too optimistic.

Click here to listen to Delzer’s comments about the revenue picture. 

Earlier in the week, State Tax Commissioner Ryan Rauschenberger gave a presentation during Energy Day activities at the Capitol.  Rauschenberger discussed the reasons it’s difficult to accurately predict how much tax revenue the state will collect.  He said a big factor is the changing relationship between oil drilling and the amount of sales tax associated with each well.

Click here to listen to Rauschenberger’s explanation. 

Click here to read the Bismarck Tribune article. 

Click here to download presentations from the Office of Management and Budget and Moody’s Analytics.

  Click here for KFYR-TV story


ND Petroleum Council reports strong results despite lower prices

The petroleum industry’s economic contributions remained strong in 2015 despite struggling commodity prices, according to the preliminary findings of a  study being conducted by the North Dakota State University’s Department of Agribusiness and Applied Economics. The oil and gas industry contributed $34.25 billion dollars into North Dakota’s economy in 2015. The figure is the second highest contribution since 2005 when the first study was released and was even higher than in 2011 when oil averaged above $87 per barrel. 

Compromise Reached on Streamlined Siting Bill, Interim Study

A tentative compromise has been reached in negotiations between the oil and gas industry, WDEA and other local government interests over SB 2286, a bill that seeks to streamline the process of siting oil and natural gas pipelines.

The legislation provides that the siting decision of the Public Service Commission will supersede the zoning authority of counties, cities or townships. Several amendments have improved the bill, but the clincher was the addition of an interim study of the new siting process.

Click here to read more about the compromise.

Mud Flap Bill Defeated in ND House

A bill aimed at preventing broken windshields was soundly defeated on a 72-19 vote in the ND House of Representatives this week.

SB 2341 was introduced by Senator Brad Bekkedahl, R-Williston, in response to constituent concerns that flying debris from trucks without mud flaps posed a hazard to other vehicles.  But even though Bekkedahl’s research showed North Dakota is one of only 11 states that doesn’t have a law requiring mud flaps, the House killed the bill. 

Rep. Terry Jones, R-New Town, who explained the bill on the House floor, said members didn’t feel the legislation was necessary because the use of mud flaps is standard industry practice.

Click here to listen to Rep. Jones’ explanation.  

Opinion: Expect Good Things from ND's Oil Industry in 2017  

Kevin Black, president of Creedence Energy Services writes of the positive outlook for the entire state from the 2017 oil industry. He writes, "The growing confidence among operators will help workers and entrepreneurs across the industry, from workover rigs to casing crews to trucking of all types. And their activity will be noticeable on Main Street, too."

World oil prices may be stagnant, but North  Dakota production is climbing

Low oil prices associated with lifting of sanctions on Iran, a weak world economy, and capital movement to the Permian basin continued to depress drilling rig count. Utilization rate for rigs capable of 20,000+ feet is 25-30% and for shallow well rigs (7,000 feet or less) 15-20%. Drilling permit activity rose sharply from December to January, then returned to normal in February. Operators are maintaining a permit inventory that will accommodate a return to the drilling price point within the next 12 months.

Registration open for the Lignite Energy Council’s Education Seminar

Energy, Economics and Environment. The four-day seminar gives elementary, middle and high school teachers in North Dakota, Minnesota, South Dakota, Montana and Iowa a first-hand look at North Dakota’s fifth largest industry, lignite mining and related energy production. The seminar will be held June 12 – 15, 2017, at Bismarck State College’s National Energy Center of Excellence, Bismarck, N.D.

NDLR Energy Law Symposium on March 16 - Registration Open

The North Dakota Law Review Energy Law Symposium will be Thursday, March 16 at the Bavendick Stateroom in the National Energy Center of Excellence at Bismarck State College. Registration is now open for the one-day symposium titled "Moving Forward: What the Future Holds for North Dakota’s Energy Sector." For more details about the event and to register go to this link.
New Name: "Energy of North Dakota"

The public outreach of the North Dakota Petroleum Council (NDPC) has been known as North Dakota Oil Can! It is the public connection to one of the largest economic contributors for the state. Now, the NDPC has decided it is time to broaden its mission. The NDPC explored options for re-branding and next week will announce its new education campaign, "Energy of North Dakota." 

Stay tuned. You're about to see a lot less of the North Dakota Oil Can logo and more of the new logo and brand  in more places as we move through the month of March.

Quick Connect

The North Dakota Supreme Court says Dunn County cannot veto the location of an oil and gas waste treating plant approved by the state Industrial Commission. Bismarck Tribune

The two biggest railroads shipping oil from North Dakota don't seem particularly concerned that the Dakota Access pipeline may be about to come online, as oil makes up only a small percentage of their business in the state. Associated Press

The Public Service Commission is seeking increased funding for its rail inspection program even as the amount of oil moved by trains in North Dakota declines. Forum News

Spanish oil company Repsol SA said Thursday that it had discovered a giant oil field in Alaska that could hold as much as 1.2 billion barrels of oil. Marketwatch

Upcoming Events

March 16, 2017
Energy Law Symposium
Bismarck State College Frank Bavendick Room

March 28-29, 2017
North Dakota Asphalt Conference
Bismarck  Ramada Hotel

May 2-4, 2017 
Williston Basin Petroleum Conference Regina, SK, Canada

July 17-19, 2017
The Bakken Conference and Expo
Bismarck Event Center

Oil prices and rig count
March 10, 2017

    WTI Crude: $48.49
                                                   Brent Crude: $51.28
                                                 Natural Gas: $3.04

              North Dakota  Active Drills: 45 (unch)        3/10/16 -- 33 rigs

Geoff Simon
Editor/Executive Director

Mike Kopp, Editor
Mike Kopp, Mykuhls Photography, Photographs
Western Dakota Energy Association