McKenzie County ND

Summit Meeting spotlights challenges of expanding economy

As I attended the first annual Williston Basin Summit meeting on Dec. 12, 2007, I was among an estimated crowd at times as large as 300 people.
Money, revenue, taxes, planning, demand for workers, increasing upkeep costs for roads and need for housing dominated discussions.

As I attended the first annual Williston Basin Summit meeting on Dec. 12, 2007, I was among an estimated crowd at times as large as 300 people.
Money, revenue, taxes, planning, demand for workers, increasing upkeep costs for roads and need for housing dominated discussions.

From the $3.9 billion the oil and gas industry brings to North Dakota, the taxpayers get $120 million back. Impacted county and city governments will look to those funds as they plan the quality of their future.

Access to oil impact money is needed earlier, according to Ron Ness, president of the North Dakota Petroleum Council, as city and county governments also face increased impact costs due to inflation. Speakers on several panel discussions underscored his statement, noting that funds are often depleted quickly.
Employment needs were a major focus.

Eight new workers must be hired per day for the next four years to fill job openings,” says Ness.

Ness points to the challenge of recruiting students, in addition to selling their parents on it, for the new jobs training programs.

Williston State College offers jobs training courses, like the two-week course, costing $750, for rig workers, as directed by Workforce Training Director Deanette Peisik, who is herself certified through a similar training program.

Availability of skilled, qualified workers is very important to development and boilermakers, pipe fitters and welders are in great demand.

As the rural population declines, housing availability is questionable and the state needs to create an environment where young people and families want to move to North Dakota, according to Ness.

The bust portion of the oil industry cycle has communities cautious about over-extending infrastructure, caught with paying for developments that failed to pay for themselves during previous booms.

How can a future be secure with the oil industry as the major employer?
According to Mark Carter, Senior Land Advisor to Encore Acquisition Partners, who have an office in Alexander, the industry’s future is even more secure due to the promise of CO 2 and carbon sequestering.

Carter says government can help train and build infrastructure in communities where development takes place. And the government needs to face challenges in housing, lack of workers, road maintenance as well as infrastructure development.
Packets of information from the state’s Housing Finance Agency (HFA)were made available. Mike Anderson heads the office and Jolene Kline is director of Planning and Housing Development. She is available at 701-328-8072 or at jkline@ndhfa.org.

The HFA has money to help with grants to fund part of the first step toward better housing, which is to do a housing demand analysis/survey with a housing committee, for example. Then a Task Force could be used to advance the agenda, much as Williston has done, according to Anderson. The second step is the planning process.

“No one size fits all,” says Anderson. “But we can learn from other communities dealing with housing issues.” He noted that success starts at the local level with concerned commitments and investments and that the local people must take ownership of their housing issues.

The HFA acts as a facilitator to planning and to bringing resources together.
It was suggested that the dilemma of value-gap must be solved. The problem is that a new house loses value as soon as it is built. The value-gap problem can’t be financed away, but a Job Development Authority of a Housing Authority could be a developer and reduce the cost of the land. Or an investment vehicle could be created that could have little or no cost.

Revenue declines, use increases and cost increases are problems that must be resolved as moderator of the Transportation Panel Robin Weisz, chairman of the House Transportation Committee pointed out. The state excise tax is flat at the same time the federal revenue stream is flat and declining.

Concerning road funding, the Department of Transportation (DOT) had little good news. Construction costs inflated 45 percent in the past six years. The appropriation for the Roosevelt Highway, that is Highway 85, did not come through. Congress has not sent out allotments and some say crisis is looming as highway fund status could remain unknown into February 2008. It was thought that by Dec. 31, 2007 the DOT would know if they could do the road construction from Grassy Butte to Williston. The DOT is committed to a four-lane construction from the Montana line when Montana is done building up to the line. Twelve miles remain on the North Dakota side, and there is a need to look at “Super 2″ in that area.

Parts of Highway 1804, which runs along the north side of Lake Sakakawea will be smoothed of ruts this summer, while other parts will be mined and blended as other portions get an overlay application.

Mayors and commissioners commented on their challenges.
Mayor Jay Skarphol of Tioga says the local housing authority is getting results after years of work. Grants applications should provide for water needs and the $13 million expansion to bring water. Increased school enrollments occur simultaneously with increased needs for contractors, electricians and carpenters. The city’s mill levies are at maximum for property taxes.

Mayor Richard Bolkan of Parshall stressed water supply as a top issue for the oil frac processing needs draw upon city water. While the city plant produces 10 million gallons, the demand is for 20 million gallons per month. Bolkan is a grocer who hired a meat cutter at $12/hour. The employee left for an oil field job paying him $22/hour. Town employees are paid up to $20/hour and employers feel they have trouble finding quality workers.

Mayor Lyn James of Bowman says the key to success is working the city and county governments together. Their new water main project is a main issue. The business sector and economy is increasing, as are demands for infrastructure, zoning, law enforcement needs, standing ordinances, and joint projects for the two governments as they strive to maximize use of resources.

Money is being set aside each year to meet a 20-year budget plan for street upgrades.

“We need a city/county planner!” says James with regard for the time demands made of elected as well as hired government workers, naming the city engineer as one role in very high demand. She added that restructuring tax revenue by the legislature in support of the oil-producing counties would be helpful.

Mountrail County Commissioner Chairman Greg Boschee says road deterioration is a great problem. Currently 20 oil companies use the road network.
“There is not enough money to do what needs to get done,” notes Boschee.

Williams County Commissioner Chairman Dan Kalil considers roads and water the determining factors for the quality of life in North Dakota. He reports trouble retaining employees and the county is also building a new jail to assist law enforcement efforts.

Dunn County Commissioner Bob Kleemann says the county pays the price for road repairs/maintenance and has used up all their funding. The county has 901 miles of road and the oil traffic uses 250 of them. Fourteen rigs and 40 to 60 new wells are to be drilled in Dunn County.

“This development is moving fast…One blademan met 80 vehicles as he tried to tend three miles,” Kleemann notes.

Repair to 1,550 miles of road will cost $15,000/mile to pull shoulders up. There is a need to hire more county workers and increase their salaries and benefits.

Keeping up with granting permits for the oil rigs is a challenge for the Sheriff, according to Kleemann. Two bridges have been close due to overuse and in 2012 the county may get money for their repair.

Kleemann asks if they need to build $60,000 houses for a population that may stay for only six or seven years.

A Legislative Strategy Panel concluded the day’s presentations.
State Senator Stan Lyson of Williston points out the legislature can only do what they hear from the public and Senate Majority Leader Bob Stenehjem says there is “no silver bullet” to resolve all the issues. But the legislature did reserve $150 million in order to help the state through a bust period, should the oil and gas industry go from boom to bust as it has done in the past.

As the drilling shifts to the east, into Mountrail and Dunn counties, the industry brings $3.9 billion to North Dakota; compared to wheat at $3.56 billion and coal at $1.8 billion. The Bakken, Madison and Red River pay zones flourish with horizontal drilling techniques.

In 2008, Lynn Helms of the state Industrial Commission predicts 700 wells will be drilled.

The oil people hope to be good neighbors on the land and appreciate the tax break on the Bakken development, asking that the tax break be extended. They also need better access to markets. Pipelines are expanding and there is talk of building a refinery in the Williston area.

Governor John Hoeven presents North Dakota as diversified in economy and prepared to deal with the challenges of this expanding oil and gas industry.
“We must work together at all levels of government,” stresses Hoeven. The state has targeted value-added agriculture, advanced manufacturing, technology-based business, energy and tourism as industry arenas to aggressively assist.

“As we grow the economy, it creates needs in housing, a need for workers, road maintenance and other infrastructure…We compete in a global, high-tech economy,” adds Hoeven.

Cooperation among levels of government, accurate, keen observations and plentiful, timely communications will help this low-population frontier adapt to its role as industry development rolls into the land, planting wells and weaving networks of water and oil pipelines.

This entry was posted on Sunday, January 6th, 2008 at 7:14 pm and is filed under 02. Poverty: Skills and Mobilizing, 09. Community: Knowledge and Awareness, 11. Community: Action. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.