Ryan Taylor, a well-known figure in North Dakota politics, gave a presentation comparing the current oil boom in North Dakota on the Bakken and Three Forks formations to the long standing oil industry practices of Norway at the “Fractured” art exhibit that was displayed at the Cavalier County Library this past week.
Posted on 2/7/15
By Melissa Anderson
Taylor’s presentation revolved around his research for his Bush Foundation Fellowship into the Norwegian oil industry. A crowd of 35 was present to hear Taylor’s comparison of the Norwegian government and oil industry practices with those occurring in North Dakota.
“They didn’t forsake the environment, just as I think our goal should be not to forsake the prairie that we eat off of”.
Recent spills, especially the salt water spill near Williston, is a topic that producers find very concerning. Salt water spills sterilize land for many years and seem to be getting bigger every year. This unwanted by-product of fracking is usually stored underground.
“I think for North Dakota the biggest challenge is going to be for agriculture and the salt water lines, to make sure they are taking care of things wheher it is shut offs or inspections, whether it’s people. We’ve got to get it taken care of” Taylor said.
Taylor addressed the impact that the oil boom has had on the already established industries in North Dakota such as agriculture and production. Taylor addressed the phenomenon known as “Dutch Disease”.
“The booming industry drives up demand for workers and inputs and then you’ve got the nonbooming industries such as manufacturing and agricultural that have kind of always been paying the bills and all of the sudden they find out their services and wages are going up as well. And during that boom time you actually put them out of business because they can’t afford the wages and costs of those services. But the boom leaves after a certain amount of time and you don’t have what you used to have”, Taylor explained.
For North Dakota the established industry that has been “paying the bills” is agriculture. The agricultural communities have already experienced Dutch Disease with the rail car shortage and grain that didn’t make it to market as a result.
“We need to make sure that we manage it in a way that farmers stay in business, because they will be here when the oil is gone” Taylor said.
The established industries of tourism and agriculture are being significantly impacted by the boom and the ripple effect is being felt all across the state. Taylor has seen some effects on tourism, especially in the natural areas such as state parks and reviews those areas as being in need of protection because the main reason people visit North Dakota are to see things that are not industrial.
Agricultural industries depend on how the boom is handled. The strain on infrastructure as a result of the boom has become a hot topic with many on the western side of the state as they struggle to maintain roads. Add the increasing number of accidents and spills and an already strained system may collapse.
“The speed that this goes forward, do we catch our breath enough that the infrastructure is up to speed where we can get our cattle truck on the road, get our grain on the train, afford our hired man to work on the farm or ranch with us?” Taylor stated.
Taylor fielded questions from the audience relating to the safety of North Dakota highways in the western part of the state to the rapid development and extraction of wells and oil. In answering the questions posed by the audience on these issues, particularly the rapid development, Taylor used anecdotal evidence to suggest that the regulations that are currently in place are sound regulations, but that inspectors are essential to enforcing those regulations.
“The rules we have are good but they have to be verified” Taylor stated.
These same inspectors that are essential to the safety of the population and protection of the environment are also in short supply. Taylor explained his views that if the North Dakota government really wants pipeline inspectors that potential candidates won’t apply for $4,000 a month when they are able to make much more on the rigs.
“If you really want your pipelines inspected you’ll have to advertise at $10,000 a month” Taylor stated.
“The surplus we have in Bismarck, we didn’t get it for nothing. It didn’t come for free…Part of the costs of our surplus is paying our pipeline inspectors at a rate that will actually get someone to apply” Taylor continued.
The oil boom is located in five counties of western North Dakota: Dunn, McKenzie, Mountrail, Stark, and Williams. These counties are facing an up-hill battle in trying to get their needs met with the sudden increase in population. The surplus that is currently reaching billion dollar status could be used to help not only these counties where the boom is occurring but also counties across the state. Taylor expressed that if the other 48 counties in North Dakota are going to be accepting funds from the surplus, there should be an understanding of where it came from and that it did not cost someone on the other side of the state their livelihood.
“We are all North Dakotans, we are all in this together” Taylor stated.
Taylor’s closing statements to the crowd on oil booms were this: “The main determinants are going to be the market, the geology and the technology. So if you know it’s there, you’ve got the technology to get it and there is a market for it up top, it will be harvested. Never in any of what I heard, at least within reason, they didn’t leave because you forbade flaring, they didn’t leave because you charged an 11.5 percent production/ extraction tax, they didn’t leave because you inspected their pipelines. They left if oil went to $10 instead of $60 a barrel. They left if the geology played out. they left if there wasn’t technology to crack shale. And I think sometimes we lose sight of that.”