Addressing Impacts in Western Communities · 2018-05-30 · Four-County Impact Analysis • Dunn,...
Transcript of Addressing Impacts in Western Communities · 2018-05-30 · Four-County Impact Analysis • Dunn,...
Geoff SimonWilliston Basin Petroleum ConferenceBismarck, NDMay 22, 2018
Addressing Impactsin Western Communities
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
opened 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.
2
Production Tax Enacted(in lieu of property taxes)
3
1953
Need for Local Share Recognized
-- Excerpt from 1953 report of Legislative Research Committee
4
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
5
• Additional committee discussion regarding industry impacts in the Big Four producing counties
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
6
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
7
It’s happening in other plays too
8
It’s Expensive to Live in North Dakota
9
Ft. Collins,CO
WatfordCity, ND
Williston,ND
Dickinson,ND
Minot, ND Gillette, WY Greeley, CO Casper, WY Midland, TX Odessa, TX Norman, OK
124.2
117.2115.1
112.6
105.4 104.4 104.2100.5
97.794.5
87.8
Cost of Living Index*
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 $2,650
2008 2018 2008 2018 2008 2018
WILLISTON DICKINSON MINOT
DEBT PER CAPITA
Assessment Debt Other Debt
AFFORDABLE | COMPETITIVE | ATTRACTIVE COMMUNITIES
DICKINSON WILLISTON MINOTANNUAL POP.
GROWTH
3.5%INFRASTRUCTURE
MILES
23.5%UTILITY ACCTS.
24.1%
2.8%INFRASTRUCTURE
MILES
19.0%UTILITY ACCTS.
19.4%
2.0%INFRASTRUCTURE
MILES
12.7%UTILITY ACCTS.
12.8%
POPULATION & GROWTH PROJECTIONS
Hub City Projected Growth (2017-2023) (Moderate Oil & Gas Activity)
ANNUAL POP. GROWTH
ANNUAL POP. GROWTH
REVENUEMajor Revenue Source Projections
*Water, Sewer, Storm, Refuse
0102030405060708090
100
2017 2018 2019 2020 2021 2022 2023
Millio
ns ($
)
MINOT
0102030405060708090
100
2017 2018 2019 2020 2021 2022 2023
Millio
ns ($
)
WILLISTON
0102030405060708090
100
2017 2018 2019 2020 2021 2022 2023
Millio
ns ($
)
DICKINSON
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 pressureon cities to maintain affordable tax/fee levels
• GPT/Hub City funding is a critical tool
13
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
14
Oil Production - Big Four Counties
15
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 0 0 6 2 0 0 7 2 0 0 8 2 0 0 9 2 0 1 0 2 0 1 1 2 0 1 2 2 0 1 3 2 0 1 4 2 0 1 5 2 0 1 6 2 0 1 7
PERCENT OF OIL PRODUCTION
Dunn McKenzie Mountrial Williams Remaining State
70 73 73
87 8693
88 92
72
94
113
140
167
204211
234
56 5867
7583
93 97108 111
120129
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
16
Growth Since 2010
Dunn: 31%
McKenzie: 225%
Mountrail: 72%
Williams: 84%
Truck Traffic Drives County Costs
2017 Budget Expenditures
17
UGPTI Road Needs 2017-2036
18
Counties Build Industrial Roads
19
Capital Improvement Plan – McKenzie County
Population will continue to grow
20
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
21
Senator Wardner’s GPT rewrite
As Price Climbs, Impacts Will Grow
23
• 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
Contact Information
• Geoff [email protected] (mobile)
Additional study details athttps://ndenergy.org/News/GPT-Study
24