Bruce Gjovig and Barry Wilfahrt: Pipeline boosts oil industry, which boosts all of North Dakota

GRAND FORKS--A few days ago, Kathy Neset of Neset Consulting of Tioga, N.D., and Rob Lindberg of the Bakken Backers held roundtable discussions on the status of the state's oil industry.


GRAND FORKS-A few days ago, Kathy Neset of Neset Consulting of Tioga, N.D., and Rob Lindberg of the Bakken Backers held roundtable discussions on the status of the state's oil industry.

Their talk made the point that our Bakken oil field is one of just three onshore super oil fields in the United States-and only 10 worldwide-that have produced more than 1 million barrels of oil per day.

North Dakota remains the Number 2 oil producing state in the nation, up from Number 9. The Bakken and Three Forks are extraordinary oil fields that have helped the United States become more energy independent as well as a top oil and gas producer in the world.

America's amazing shale technology play helped save the U.S. economy during the Great Recession, supporting millions of new jobs.

Extraction, production and sales tax revenues from oil drilling and production are providing more than half of our state tax revenues-$3.2 billion to $5.8 billion per biennium-a great boost to our state budget, even now.


Each oil well contributes about $300,000 in sales tax revenue alone, and there are more than 900 wells that are drilled but not fracked and are waiting to come online. They will add $270 million of sales tax revenue to the state budget.

The 30 rigs in our state drill about 600 or so new oil wells per year to keep the pipeline filled.

The oil industry has slowed down, not gone away.

As important, the oil industry provides 15 percent of the state's jobs and raised the per-capita person income from $25,592 in 2000 to $57,084 in 2013. The average wage in the oil and gas sector is $98,384.

North Dakota was in the bottom 10 states by per-capita gross domestic product in 2000, and by 2012, ranked Number 2 in per capita GDP.

Meanwhile, the 11,200 Bakken wells keep on producing oil and keep producing jobs as well. As the well count increases, the job count will, too.

North Dakota still enjoys a very low unemployment rate- among the lowest in the nation- even with the downturn. Our state's economy is much larger than it was before the oil boom started in 2008. More than 80,000 energy jobs were created, and 50,000 of them remain.

Tens of thousands more will be created, keeping demand high for hard-working, qualified people not only in Williston and Watford City, but also Grand Forks.


Our state's population is at a record high. This is no oil bust. This is a slowdown and a chance to take a breather to catch up.

That's important, because the Bakken oil field will continue to produce oil and gas-as well as opportunity-for decades to come as another 30,000 to 60,000 oil wells are drilled.

The Dakota Access Pipeline that dominates the news will eventually transport 470,000 barrels per day of our light, sweet crude oil from North Dakota to Illinois refineries. Out of scores of pipelines in our state, it will be the largest, carrying $20 million of oil a day at $43 per barrel. That's $7.3 billion a year.

The pipeline will carry nearly half of all the oil currently produced in the state.

Pipelines are the safest, most efficient, most reliable and cheapest way to transport oil, replacing transport by rail or truck. According to Canada's Fraser Institute, moving oil by pipeline is 4.5 times safer than rail.

With an average savings of $6 per barrel to transport oil by pipeline over rail, that is $2.82 million per day savings that stays in North Dakota, more than $1 billion of more revenue each year. Higher transportation costs not only reduce income and revenue to royalty owners, but also lower tax revenue to all levels of government. Additionally, the pipeline project is expected to generate $41 million in sales and income taxes and $13.1 million in property taxes each year in North Dakota.

The oil and gas industry continues to have a significant, positive impact on our entire state, east to west.

Gjovig is the CEO and entrepreneur coach of the UND Center for Innovation Foundation. Wilfahrt is president and CEO of the Chamber of Grand Forks and East Grand Forks.


Both received the Outstanding Community Partner Award in 2011 from Williston Economic Development for efforts to organize the East Meets West exchanges to foster business relationships between the opposite ends of the state.

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