North Dakota: $1 Billion Lost in Market Value of Natural Gas

Gas FlareNorth Dakota lost $1 Billion in market value of natural gas due to flaring in 2012.

Republicans can’t SPIN their way out of this failure in leadership.

After eight years of allowing industry to flare natural gas at will the Republican Leadership in North Dakota has decided now it’s time to have flaring goals.

This is another example of failed Republican Party leadership of the Legislature and State Government. The Republicans in the last and previous legislative sessions refused to heed the suggestions of the Democratic-NPL minority legislators. Instead they decided to pander to industry and give tax breaks to drillers. Even Republican Party Chairman, Bob Harms sees it as short sighted. Incentives should have been focused on midstream pipeline companies and processors.

Now six months after the legislative session the Industrial Commission made up of the Governor, Attorney General and Agriculture Commissioner, all republicans, decide something needs to be done. They are acting only after pressure from Democrats and citizens across the state and the eyebrow rising of professionals at the national level. What we get is more political spin.

Here is what Attorney General Stenehjem said recently: “by allowing the amount of flaring, the state has “stretched the public’s tolerance and acceptance too far.” As long as we have a long-term strategy … and get to where we don’t have any (more) flaring than absolutely necessary, I think the public would be supportive”. Now that is what I call “failed leadership”. Where were the republican leaders who had full control of development six years ago? Frankly, they were asleep at the wheel and have cost the citizens of North Dakota hundreds of millions of dollars in lost revenue let alone the tremendous waste of a very precious natural resource.

You can’t put all the blame on industry on this one. It falls at the feet of the republican controlled state government. They caved to the idea that it is alright to waste (flare) the natural gas so that greed could be achieved as quickly as possible by exploiting the Bakken oil at the expense of wasting the natural gas. And Senator Hoeven calls this the model for the nation as he pedals the idea of North Dakota being a leader! The Industrial Commission spin is that we went from 36% to 29% in flared gas between 2011 and 2013, but what they don’t tell you is the absolute volume of natural gas flared went up, during the same time period, 2.5 times from 106,000 mcf per day to 266,000 mcf per day. Now that is real political spin folks.

Now here we are just beginning to talk about goals. No plans, no permit conditions, no specific solutions for gathering and processing, no idea of effective incentives or possible public/private partnerships and not even a peep from state officials about a strategy to get natural gas to every community in North Dakota as we work to deliver it to the rest of nation.

As we move farther out from the “sweet spot” of the Bakken flaring will only become more of a problem and the solutions will be even more difficult. Even investors are concerned. As recently as March of 2012 investors representing $500 billion in assets sent a letter to 21 of the industry’s largest shale oil producers urging them to reduce or eliminate flaring.

Because of a lack of leadership by the Industrial Commission now North Dakota citizens are getting flared. In 2012 North Dakota, lost due to flaring, an estimated $1Billion in market value of natural gas. Because of a failure in effective public policy we are not only incurring environmental costs, but we are incurring outlandish and unwarranted economic hardship to the producers, landowners, mineral owners and the taxpayers of the state.

This is another glaring example of failed leadership at the state and legislative level totally controlled by Republican Party leaders. It is time citizens vote for a more balanced political makeup of the legislature and state government.

ND Republicans: Stand down- rethink oil tax cut

Oil RigsThe Republican Party Leadership with its super majority in the Legislature and complete control of State Government is dead set on political pay back to their large out of state corporate contributors and doing it with our state revenue.  They need to stand down and rethink the havoc they are legislating on North Dakota.  Their approach is simple misguided.  The Republican record so far is neither North Dakota business nor family friendly:

  • Denying low income children a carton of milk while giving 10 out of state corporations $45 million in tax breaks.
  • Walking us backwards on discrimination.
  • Passing legislation that will give 82% of tax relief to 50% of out of state companies.
  • North Dakota has now dropped from No. 2 to 19 in “wellbeing”.
  • North Dakota ranks 2nd in the Nation for workforce injuries.
  • Our communities are seeing downgrades in bond ratings.

Republican insistence on reducing the oil extraction tax at this time is simple wrong.  Industry will drill 30 to 40,000 more wells and we have only drilled upwards of 5,000 wells with devastating impacts and upwards of $5 billion to $8 billion in public needs.  Our citizens and businesses deserve to have these public improvements fixed first.

Public infrastructure is in dismal disrepair, businesses struggle daily to keep up with demand, lines are the norm for food, medical services, and routine public services, our local public officials are stressed out, our daycare system is in crisis, a housing crisis that has now reached to working homeless families, after seven years of republican control we have an incomprehensible problem with solid waste, fracking water, liquids, chemicals and now toxic radioactive waste disposal issues.

Republicans have had seven years and hundreds of millions of dollars to get ahead of energy development.  They have failed.  So far this legislative session they are making a travesty out of governance.  It appears there may be more measures on the ballot than candidates in 2014.

The citizens of North Dakota are signaling a desire for two-party governance.  The Democratic Party is energized, organized and committed to a very competitive election in 2014 and a full fledged discussion about which party best represents the interest of North Dakota citizens and our business community.

 

I would like to hear your thoughts.  Is it time for a more balanced legislature?  Are the impacts in Western North Dakota being adequately solved?  Is the “wellbeing” of our state in decline?

Republicans and Another Fine Mess!

Bakken Development in North Dakota

Western North Dakota reminds me of the Laurel and Hardy 1930 comedy “Another Fine Mess”. The problem is this mess isn’t  so funny.

State government and the legislature is controlled by republican politics and they are hell bent on spending but not investing in our future. And when you only have as a priority, tax breaks for out of state oil and gas corporations and spending without making the hard choices to invest this is the kind of mess you get.

It is easy to spend money. It is much more difficult to make the tough decisions to invest.

North Dakota Republicans are now big government spenders in charge!

Money will be flowing like honey from the Capitol, but little will be invested in North Dakota’s future!

State government has lost control of energy development in North Dakota and now they will try to patch things up by further misguided spending.

In the meantime communities will have to march on the North Dakota Capitol to get a fair shake at resources to try and regain control of their communities.  The republican party controlled government refuses to share risk with the communities.  Instead they want to dole out money every two years like throwing candy at a 4th of July parade.

Everyone will be focused on negative impacts that have been allowed to compound over the last 8 years. And the approach will be to spend, spend and spend more without any sense of what the long term outcome should be or might be.

From infrastructure, to housing shortages, to schools, to food lines, to wage disparity, outrageous pricing of housing, shortage of labor, healthcare lines, stressed law enforcement,emergency service personnel fire fighters, city and local government officials. You name it and they are stressed to maximum, yet we are ever so proud of the oil and gas wealth  being bestowed upon our state we want to give them immediate tax breaks.  Fix the public’s problems first! and begin investing in our states future.  A future that says to the next generation we are leaving you opportunity better and more permanent than ours.

I do not believe that the true wealth of our state is measured in oil rigs, or barrels of oil.

Our wealth as a state is measured in our ability to invest in our future and our future is defined by the young people having a good paying job in North Dakota. It is measured by the quality of education of young people. It is measured by the care we provide to our elderly and for the less fortunate among us.  It is measured by the quality of place we provide and the environment we are surrounded by each and every day.

Yes, this is “Another Fine Mess”, and it will be interesting to see how the republican controlled legislature and Governor Dalrymple  try to spend their way out out of this mess during this session of the legislature. Here is a link to the Dalrymple article on state budget.

They will certainly have the money to pour out, but will they be willing to accept the responsibility to make the hard choices to put money into “investments” for our future?

They have failed so far. It took a constitutional measure to force their hand. Unfortunately that measure does nothing to allow for investments NOW when they are truly needed.

What thoughts do you have on leadership in this session of the State Legislature?  Share your thoughts and comments below.