The PJ Tatler

Liberating Oil Reserves Spells Explosive Growth in North Dakota

House Energy Action Team (HEAT) Republicans picked a key focal point for their nationwide energy blitz today as Majority Whip Kevin McCarthy (R-Calif.) joined Republican Rep. Rick Berg in his boomtown home state, North Dakota.

Thanks to meteoric growth in the energy sector in recent years — earlier this week, North Dakota passed Alaska to become the No. 2 oil producing state in the nation — this Great Plains state has the country’s lowest unemployment rate at 3 percent.

In fact, Berg said today on a trip to tour the Continental Resources oil rig near Killdeer, N.D., the oil-producing counties have some 6,500 job openings. “A lot people across the country are coming to North Dakota,” he said, for jobs that the American Petroleum Institute says pay double the average salary in the state — more than $70,000 a year, on average.

This growth in due in large part to the development of the largest oil discovery on the globe over the past 40 years, the Bakken formation, accessed in recent years by horizontal drilling or fracking. The state now produces about 510,000 barrels of oil per day, up more than 150,000 barrels per day from the previous year.

Berg told PJM from the 2012 American Energy and Jobs Tour that the turning point in his state was implementing smart economic policies upon which the energy industry was able to grow and prosper.

The congressman served in North Dakota’s House of Representatives in 2003 when, facing a deficit like many other states, they tightened their economic belts without raising taxes. Two years later, with a budget surplus and a track record of 21 straight months of increased sales tax collection, legislators took a good look at which industries could be encouraged.

“Energy was one of those industries,” Berg said. “When things started to take off, we supported it rather than put up barriers to it.”

And thus, communities took off — not just the oil and gas industry but businesses in the towns that supported the development.

“I’m seeing all kinds of wonderful stories about people that are stuck in debt and despair and doubt, and coming here and finding a job,” Berg said.

The congressman said he’d like to see that kind of growth across the nation, and hopes that roadblocks such as unnecessary regulation don’t dampen the state’s boom.

In Washington, he said, that means understanding an “all-of-the-above” energy strategy includes coal and oil.

“The challenge that I see in Washington: pitting one energy source against another,” Berg said.

That also means dealing with an administration that is increasing fracking regulations and cryptically noting that not all leases (mired in permitting) on public lands are being utilized.

Noting some 800 permits backlogged at the Interior Department, Berg said, “I don’t how you look at that and say, ‘gee, they’re encouraging this development.'”