By Dustin Hurst | Watchdog.org
BELFIELD, N.D. — A red diesel rig in a usually desolate field just south of Belfield might offer the brightest example of the economic transformation under way in western North Dakota — and what’s available to Montanans eager to exploit their own state’s oil deposits.
The truck is owned by oilfield service behemoth Halliburton. Though it’s a vibrant cherry red and a sight in its own right, the trailer — with its full-service prep kitchen (complete with air-conditioning unit) and two massive barbecue grills — is the real attraction.
You want this truck and trailer at your next neighborhood get-together.
The Halliburton rig is in town for the fourth annual Bakken Rocks Cookfest, a yearly cooking competition among local oil and service companies. Halliburton and cook-off teammate Hess, a New York-based oil heavyweight, aren’t the only competitors, but their presence looms over the windswept field.
The annual event features everything from face painting and clowns to bounce houses for the kids. While a large white tent protects them from the midday sun, locals at picnic tables chow down on bacon-wrapped chicken, sausage, corn on the cob and watermelon.
It’s a sight the rest of the country might look upon with envy.
While the nation continues to suffer with greater than 8 percent unemployment and an uncertain economy, North Dakota’s hovers around 2.9 percent, the lowest in the country and well below numbers economists generally regard as full employment.
Lt. Gov. Drew Wrigley made that point in his short post-contest address to the picnickers.
“North Dakota is doing what they’re not doing anywhere else in the country,” he said. “Maybe they could pay attention and they could have one of these barbecues, too.”
Thanks to state-of-the-art drilling technology, the Bakken and Three Forks geologic formations are gushing wealth. State officials project more than $400 billion in private investment funds flowing to the area through the next 20 years thanks to the oil surge.
“North Dakota is America’s No. 1 economy,” Wrigley said. “So that makes this the best barbecue going on anywhere in the nation.”
The celebrating is likely to continue for decades.
Lynn Helms, North Dakota Department of Mineral Resources director, told locals at an information session earlier in the day the oil industry is booming now, but has staying power for at least the next 40 years.
As it stands, North Dakota generates 600,000 barrels of oil each day, about half of the legendary production of Texas. With more than hundreds of new wells coming on-line each year, Helms says the state could generate more than 1 million barrels daily by 2015.
Newfound wealth fills state coffers like never before. Tax revenue in all areas quickly exceeds expectations. The Bismarck Tribune reports sales tax collections are 52 percent ahead of projections, while individual income taxes are about 60 percent above estimates.
Overall, Brady Pelton with the North Dakota Association of Oil and Gas Counties says tax revenue has increased an astonishing 1,466 percent since 2002.
The state projects a stunning $858 million surplus by biennium’s end, June 30, 2013.
Oil revenues also are running high. Becky Keller, a budget analyst for the North Dakota Legislative Council, told lawmakers in July that oil revenues sit at about $1.49 billion for the biennium, well above the original $891 million projection.
With the increasing revenue has come pressure to spend. In 2009, the two-year budget came in at about $3.2 billion. Last year, lawmakers approved a $4 billion two-year budget, a 25-percent increase. Some of that is to cover the costs associated with the oil boom, as the state hires more inspectors and regulators to manage growth and enforce environmental standards.
But the new money brings goodies, too.
Earlier this week, Gov. Jack Dalrymple announced a $2.5 billion roads package he wants included in the next two-year budget. The Legislature dedicated $500 million to tax relief in 2011 and Capitol rumblings suggest more could be on the way.
Not everyone is thrilled with the state’s rapid ascent to oil king status.
At the earlier information session, North Dakota Petroleum Council director Ron Ness told locals the state needs to keep developing oil resources quickly or risk losing millions in future venture capital money.
Belfield resident and former law enforcement officer Larry Johnson dissented.
“I disagree with that,” he told Ness after a short exchange between the two men.
After the meeting, Johnson, who still works part time as an emergency responder, explained his reservations about allowing unchecked growth. He cries fouls on Ness’s assertion that the state will lose out on millions if development slows.
“That defies logic,” he said after the meeting’s conclusion. “People won’t leave if we’re the only game in town.”
Johnson, like most North Dakotans, contends daily with the boom’s adverse effects: snarled traffic, constant road construction and higher prices for fuel and groceries. In his first-responder capacity, he sees devastating auto accidents he attributes directly to having more oil big rigs on the roadways.
“It’s a two-edged sword,” Johnson notes.
Wrigley knows his constituents struggle with their new neighbors. But he’s betting everyone will adjust with time.
“We’ve got serious challenges,” he said. “I’m not going to sugarcoat it. But these are challenges of prosperity and that’s a good place to be.”