Other states may be grappling with massive budget deficits, but North Dakota is sitting pretty, thanks to the Bakken-Three Forks shale oil deposit.
“Imagine a Tupperware container tightly packed with sand, then soaked with water representing oil deposits, sealed and then tucked away for an extended period of time,” explained the Bismarck Tribune in its “Bakken Breakout 2010” special edition. “For the first time in our state’s history,
we have become the preeminent economic bright spot of all 50 states, gaining attention from countries
across the entire globe.”
The Associated Press cited development of the shale oil field – which has already produced a billion-dollar surplus for North Dakota and $295 million in property tax relief for taxpayers – as the top state news story of 2010. Record production of 110 million barrels of oil this year was more than double the amount recovered just three years ago.
Experts say the low-density light crude, which flows freely at room temperature, is ideal for refining. The American Association of Petroleum Geologists says Bakken is the largest oil deposit in the U.S. outside of Alaska.
North Dakota’s oil boom has already increased the sparsely settled state’s population by 5 percent, and the director of the state’s Mineral Resources Department predicts that 2,000 new wells (there are now 166 active ones) will be drilled in 2011. Half will be located in a 70-mile radius around Williston, which had to add 1,200 new housing units this year to keep up with demand.
But the state is also looking to the future.
In November, 63 percent of North Dakota voters wisely approved a measure that funnels 30 percent of all oil tax revenues, now at $613 million annually, into a Legacy Fund which cannot be touched until July 1, 2017, at which time it is expected to be about $2 billion and generate $60 million in interest annually for the state's general fund.
But only interest earned by the fund can be spent by the state. An emergency provision to allocate up to 15 percent of the principle per biennium requires a two-thirds vote of both houses of the legislature to ensure that revenues will outlast the oil.
Like California during the Gold Rush of 1849 and Alaska during the go-go 1970s, North Dakota is suddenly the place to be.