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North Dakota Lawmakers Wrestle with Local Infrastructure Needs

Driven by the Bakken shale oil boom, the governor and state legislators in North Dakota early in their biennial budget-setting session are focused on transferring more than a billion dollars in added funding to the state's major western counties and cities needing infrastructure improvements to keep pace with the oil-induced growth.

On Monday, a so-called "surge bill" (SB 2103) proposed by western state lawmakers was amended and given a "do-pass" recommendation from a key state Senate committee. The amendments were passed by the full Senate last week, and the measure has been scheduled for a final vote late this week.

The bill includes about $1.1 billion in funding, but observers in Bismarck cautioned that the total could change when the measure gets to the House.

Amendments removed schools funding and added $300 million for highway funding, a critical issue for the oil and natural gas industry. SB 2103 includes a provision that any new and rebuilt roads using this funding would need to be built to handle the heavy duty vehicle traffic that comes with the oil/gas development.

Gov. Jack Dalrymple had a "jump start" bill (SB 2126) that proposed $873 million in funding as part of the overall $3.7 billion proposal to help western oil-producing communities in the state. Dalrymple's bill is still in committee and is likely to die there as the state legislators only want to send one bill forward to address special infrastructure needs by this summer, according to a source close to the state legislative process.

The head of the North Dakota Petroleum Council, Ron Ness, told state lawmakers at a hearing earlier this year that funding for counties in the west region is the oil industry's top priority. State officials have been trying unsuccessfully for several budget sessions to keep up with the runaway growth (see Shale Daily, Sept. 23, 2014; Feb. 24, 2012).

Ultimately, the Senate Appropriations Committee went with Sen. Kelly Armstrong’s bill (SB 2103), which includes $300 million specifically aimed at oil-producing counties, while Dalrymple's bill earmarked $450 million to the state Department of Transportation.

In his state-of-the-state address early in January, Dalrymple said the oil production region has "significant infrastructure needs," and he proposed that the state's support in the upcoming biennium be hiked by $1 billion, on top of about $2.7 billion going to the oil counties in the current two-year budget period.

As the nation's second largest oil-producing state, Dalrymple said North Dakota "has taken major steps to strengthen the state's oversight of the oil/gas industry," including major expansions of the regulatory staff in the Oil and Gas Division of the Department of Mineral Resources and the Department of Health. Rail safety and pipeline integrity are also getting increased focus for the state Public Service Commission, he said.

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