Oil Riches Let North Dakota’s Governor Dalrymple Bank Surplus in Hard Time
By Bill Heltzel, Bloomberg.com, March 21, 2011 [here]
Rancher Michael Brew can survey North Dakota’s oil boom from the saddle. As he checks on his cattle, he sees seven drill rigs, a dozen gas flares and convoys of trucks rumbling down the road.
“I used to ride out on my horse and not see anyone for hours,” Brew, 52, said at Nana Lil’s cafe in Killdeer. Now gas flares tint the night sky orange and obscure the stars. The staccato of air brakes and the slamming of drill pipes pierce the breeze. “There is no peace and quiet anymore.”
Oil has created a $1 billion budget surplus and presented Governor Jack Dalrymple with a question: How to keep up with the boom while keeping the money flowing. Only North Dakota and Montana have reported surpluses from 2009 to 2011, according to the Center on Budget and Policy Priorities. As states face what may be more than $112 billion in deficits in the coming fiscal year, Dalrymple’s dilemma is one many governors might envy.
“The number one priority is to keep up with the infrastructure,” Dalrymple said in a February interview in Bismarck. “That growth cannot continue if we do not keep up with all the impacts that happen on communities out there.”
Dalrymple, a 62-year-old Republican, was elected lieutenant governor in 2000 and moved up after his predecessor, John Hoeven, was elected to the U.S. Senate in November.
Amber Waves
North Dakota and its 672,591 residents grow more wheat, barley, sunflowers, canola and flaxseed than any other state, according to the U.S. Department of Agriculture. Wheat futures increased 47 percent last year, to $7.94 per bushel on the Chicago Board of Trade.
And then there’s the oil. The state sits atop the Bakken shale formation, one of the country’s largest reserves and the reason the state has vaulted to the nation’s fourth-largest producer from ninth in six years.
The spot price of light sweet crude oil like that in the Bakken rose 221.78 percent from December 22, 2008, through March 18, 2011.
Gross state product increased 75 percent, to $31.9 billion from 2000 to 2009, compared with 42 percent nationally. Unemployment in January was 3.8 percent, the country’s lowest, as the national rate was 9 percent. … [more]