Addressing Impacts in Western Communities Geoff Simon Williston - - PowerPoint PPT Presentation

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Addressing Impacts in Western Communities Geoff Simon Williston - - PowerPoint PPT Presentation

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Addressing Impacts in Western Communities Geoff Simon Williston Basin Petroleum Conference Bismarck, ND May 22, 2018 The First Boom Happened Quickly Within two months of the 1951 Iverson oil strike, 30 million acres were under lease.

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Geoff Simon Williston Basin Petroleum Conference Bismarck, ND May 22, 2018

Addressing Impacts in Western Communities

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The First Boom Happened Quickly

  • Within two months of the 1951 Iverson oil strike,

30 million acres were under lease.

  • By 1952 , Standard Oil of Indiana was building a 30,000

barrel per day refinery near Mandan.

– Forty-two oilfield service and supply companies had

  • pened offices in Williston.

– In June 1952 Service Pipeline Company announced it would build a pipeline to the Standard refinery.

  • The earliest producing wells of the Bakken shale

formation were drilled in the 1950s on Henry Bakken’s farm less than five miles from the Iverson No. 1 well.

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Production Tax Enacted

(in lieu of property taxes)

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1953

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Need for Local Share Recognized

  • - Excerpt from 1953 report of Legislative Research Committee

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Interim Study of Hub City Funding

  • Hub City topic assigned

to Energy Development & Transmission Committee

  • Public input hearings

and committee tours conducted in Williston, Dickinson and Minot

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  • Additional committee discussion regarding industry

impacts in the Big Four producing counties

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SLIDE 6

WDEA Interim Study Support

  • Hub City Study – updated last year’s Six-City

Study, and expanded to include Minot

  • Worked with AE2S Nexus to assist cities with

tours and presentations in each Hub City

  • Developed 4-County Study to support effort

to re-write GPT distribution formula

  • Partnered with NDPC on research project to

identify historic expenditures of oil tax revenue

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Key Findings of Hub City Studies

  • Competition

– While price of oil often dictates activity by employers, quality of life and cost of living dictate activity of workers – ND is in competition with other plays for workforce:

  • Permian
  • Eagle Ford
  • Haynesville
  • Niobrara
  • Scoop/Stack
  • Marcellus

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It’s happening in other plays too

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It’s Expensive to Live in North Dakota

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  • Ft. Collins,

CO Watford City, ND Williston, ND Dickinson, ND Minot, ND Gillette, WY Greeley, CO Casper, WY Midland, TX Odessa, TX Norman, OK

124.2 117.2 115.1 112.6 105.4 104.4 104.2 100.5 97.7 94.5 87.8

Cost of Living Index*

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Total Debt Load / Debt per Capita

$5 $73

  • $14

$26 $34 $267 $6 $79

$39 $340 $92 $63 $104

2008 2018 2008 2018 2008 2018 WILLISTON DICKINSON MINOT

TOTAL DEBT (MILLIONS)

Assessment Debt Other Debt $383 $2,773

  • $394

$1,034 $2,710 $10,093 $4,016.65 $1,370 $1,616 $3,094 $12,865 $351 $1,764 $2,650

2008 2018 2008 2018 2008 2018 WILLISTON DICKINSON MINOT

DEBT PER CAPITA

Assessment Debt Other Debt

AFFORDABLE | COMPETITIVE | ATTRACTIVE COMMUNITIES

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DICKINSON WILLISTON MINOT

ANNUAL POP. GROWTH

3.5%

INFRASTRUCTURE MILES

23.5%

UTILITY ACCTS.

24.1% 2.8%

INFRASTRUCTURE MILES

19.0%

UTILITY ACCTS.

19.4% 2.0%

INFRASTRUCTURE MILES

12.7%

UTILITY ACCTS.

12.8%

POPULATION & GROWTH PROJECTIONS

Hub City Projected Growth (2017-2023)

(Moderate Oil & Gas Activity)

ANNUAL POP. GROWTH ANNUAL POP. GROWTH

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REVENUE

Major Revenue Source Projections

*Water, Sewer, Storm, Refuse

10 20 30 40 50 60 70 80 90 100 2017 2018 2019 2020 2021 2022 2023

Millions ($)

MINOT

10 20 30 40 50 60 70 80 90 100 2017 2018 2019 2020 2021 2022 2023

Millions ($)

WILLISTON

10 20 30 40 50 60 70 80 90 100 2017201820192020202120222023

Millions ($)

DICKINSON

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Need to Invest in our Communities

  • Further projected population increases will place

additional service demands on each city

  • Hub Cities have made required, smart, and

prudent investment through the boom

  • Hub Cities have tall task of maintaining an

affordable quality of life and cost of living

  • Future investment needs will keep pressure
  • n cities to maintain affordable tax/fee levels
  • GPT/Hub City funding is a critical tool

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Four-County Impact Analysis

  • Dunn, McKenzie, Mountrail and Williams currently

produce 92% of the oil in North Dakota

  • Significant oil and gas tax revenue generated in a

small geographic area to benefit the entire state

  • Huge Industry Impacts – GPT Revenue is Essential

– $987 million in road needs funded since 2010 – $230 million in capital facilities since 2014

  • Corrections Centers - 170 new beds in 4 County Region
  • Public Works Facilities: to accommodate staff, fleet, and

increased demand for county services

  • Courthouse Needs: Significant Additions and Renovations

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Oil Production - Big Four Counties

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2% 4% 9% 11% 13% 15% 15% 16% 16% 17% 17% 19% 14% 14% 12% 13% 14% 20% 23% 28% 33% 35% 37% 40% 1% 5% 26% 37% 41% 33% 28% 25% 24% 21% 20% 19% 9% 10% 8% 7% 9% 14% 17% 16% 14% 16% 16% 15% 73% 66% 45% 32% 23% 19% 16% 15% 12% 10% 9% 8%

0% 10% 20% 30% 40% 50% 60% 70%

2 00 6 2 0 0 7 20 0 8 2 0 0 9 2010 2011 2012 2013 2014 2015 2016 2017

PERCENT OF OIL PRODUCTION Dunn McKenzie Mountrial Williams Remaining State

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70 73 73 87 86 93 88 92 72 94 113 140 167 204 211 234 56 58 67 75 83 93 97 108 111 120 129 148 163 184 207 238 261 259 273

50 100 150 200 250 300 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017

Historical Staffing Growth

Dunn McKenzie Mountrail Williams

County Personnel Needs Exploded

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Growth Since 2010

Dunn: 31% McKenzie: 225% Mountrail: 72% Williams: 84%

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Truck Traffic Drives County Costs

2017 Budget Expenditures

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UGPTI Road Needs 2017-2036

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Counties Build Industrial Roads

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Capital Improvement Plan – McKenzie County

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Population will continue to grow

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Four-County Needs Summary

  • On-going development of oil and gas in the 4 Counties
  • Further production increases expected with increased

price and efficiency in the drilling process that will impact all oil and gas producing counties

  • Significant past investments have been made and GPT

has been an essential resource to meet the need

  • Moving forward, large infrastructure demands remain

in oil and gas producing counties

  • To meet this demand - GPT will continue to be critical

tool for oil and gas producing counties moving forward

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Senator Wardner’s GPT rewrite

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As Price Climbs, Impacts Will Grow

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  • Drilling and production

technology has improved

  • Wells drilled in half the time,

so current 62 rigs can drill nearly 150 wells/month

  • If $60 is the new $90, then

$70.00 = $105.00/bbl

  • “Bakken Premium” comes back

into play, construction costs

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Contact Information

  • Geoff Simon

geoff@ndenergy.org 701-527-1832 (mobile)

Additional study details at

https://ndenergy.org/News/GPT-Study

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