Governor of North Dakota, Jack Dalrymple

“This is not your grandfather’s oil boom!” The 32nd governor of the State of North Dakota, Jack Dalrymple is our guest on today’s Hegg Bakken Report; the governor discusses infrastructure needs, technology along with the future of oil exploration in the Bakken region of his state on today’s program.

Hegg Bakken Report: Today on the program we get in touch with Governor Jack Dalrymple, the Governor of North Dakota. Governor Dalrymple, thank you so much for joining us on the program today.

Governor Jack Dalrymple: Hey, my pleasure Bill.

Hegg Bakken Report: Let’s get a little background on you Governor. Where did you grow up in North Dakota?

Governor Jack Dalrymple: Well, actually I’m from the Casselton area. Betsy and I live on a farm about 20 miles west of Fargo, where we’ve been in the farming business for several generations.

Hegg Bakken Report: Are you still – do you still own the farm? Do you still get back out there and visit now and then?

Governor Jack Dalrymple: Well, I do as often as I can, and I’d like to be around there more, but my schedule just doesn’t allow it. So it’s like a welcome break when I get a change to go over and take a look at the crops.

Hegg Bakken Report: I bet it is, from the hassle and bustle of the North Dakota’s Governor’s office, I bet it’s a great diversion to kind of relax and decompress if you will.

Governor Jack Dalrymple: Yes, there is no double it and you know it’s a different world entirely from what’s going on in Western North Dakota. So it’s very interesting to compare the two parts of our State.

Hegg Bakken Report: Yes, it’s interesting times that we are living in Western North Dakota. Some things are changing every day and new surprises very day. If I could ask Governor, what can folks in oil impacted Counties, like for example McKenzie Country, what can they expect from state government to help with the infrastructure and the needs that they have now in 2013?

Governor Jack Dalrymple: Well, as a result of our legislative session last winter, people in oil country and especially in those areas where the production is really ramping up, can expect a tremendous response from the state of North Dakota. All of the funds available from the various tax sources and the impact funds are going to more than double in the current biennium over where we have been. And in fact when all is said and done and all the revenues are counted up, it may be more like tripling the amount of state dollars that are going into oil country.

The legislator really stepped up and they really responded on a number of fronts. It’s not just roads and highways, but everything out there from schools to townships to ambulance services to law enforcement have all received many, many more resources.

Hegg Bakken Report: Talking to some of the folks in Watford City, they used the number of nearly $200 million needed for primarily water and sewer for development to continue and along with what you said, that’s what they can expect and I’m sure that’s changing on an ongoing basis. Would you agree?

Governor Jack Dalrymple: Well, Watford City, when you get specific here, let’s face it, Watford City is ground zero in the oil boom in the United States. I believe that Watford City is the fastest growing municipality in the United States.

What they are experiencing of course is in no way normal. It is just a remarkable situation. We are working directly with them on a number of fronts and as I said, they don’t have just one challenge to meet; they’ve got dozens of challenges to meet and I think that they are doing very well. They’ve got good leadership there, and a lot of what they are facing is going to require also good support from McKenzie County.

McKenzie County is going to see a huge surge in the oil revenue now as a result of changing our tax split. They also have tremendous growth in production and of course prices are holding up for oil. So they won’t have resources available and we’re working with them and with Watford City to coordinate all the various sources of funds and make sure that the city is able to keep up with what they have to do.

Hegg Bakken Report: We are visiting with North Dakota Governor, Jack Dalrymple and Governor, what development would you like to see in Western North Dakota? There are so many things that are needed. Do you priorities or how do you respond to that?

Governor Jack Dalrymple: Well, we are attacking these challenges at all fronts. We have to keep up across the board. We can’t afford to really fall behind in any area if we expect this development to continue, and of course the development is bringing in tremendous resources, not only locally, but to the state of North Dakota.

There are wonderful things happening because of it, but we have to keep with the challenges and that means we’ve got to work on the roads, at a pitch that we never have in the state history. We are now committing huge amounts of state dollars, billions of dollars and this is without federal match money, 100% state dollars to do things like four lane, state highway 85 from Watford City to Williston. We are funding the building of bypasses at Watford City, eventually at Killdeer, at Newton and of course we worked hard on the temporary bypass at Williston and there will now be a permeate bypass there as well.

Housing is a huge issue. We have a tremendous response under way. $50 million in state cash and tax credits going directly into low income or affordable housing, most if which is in Western North Dakota. We have sent again 15 more state highway patrolmen out to Western North Dakota, to back up our local law enforcement. Schools will be receiving $25 million in outright grants. In addition they will have $200 million in loan funds available to them to build schools.

As you look at all these different areas, they have to combine together to address every challenge that comes up. You mentioned sewer and water in that area. We have a special impact fund that is we created with 100% state dollars, a total of $240 million of that can go directly to the most urgent needs out there. No local match required and in many cases the infrastructure that you need for development can come from these kinds of funds.

We are also spending a lot through our state water commission, to build out water supply systems, was the so-called the western area of water supply system is a tremendous investment. Hundreds of millions of dollars and the state is investing most of that money through the state water commission. So it’s a long list of things that we are going and I think when you add it all together, it’s really a remarkable time of building and progress.

Hegg Bakken Report: I ask everybody this question, I kind of know – I wanted to hear your thoughts on how long do you think oil exploration at the rate its going today is going to last.

Governor Jack Dalrymple: Well, I think that people are beginning to realize gradually that this is not your grandfather’s oil boom, this is a different kind of things entirely, because the shale play is really not so much oil exploration as it is just the mining of petroleum out of these know layers and a kind of a known resource.

It’s really more like mining for coal. You know it’s down there, you know where to kind it, all you have to do is asset the cost of removing it from the earth and what they are finding is that its virtually guaranteed there is almost 100% success rate and I think that based on what we know about these formations, unless the price of oil goes into a major collapse the development of this resource is going to continue for several decades.

Hegg Bakken Report: Has your office heard of a lot of new companies that are inquiring on moving to North Dakota.

Governor Jack Dalrymple: Well, there is a tremendous amount of interest in our economy. Of course I get calls every week from the national media. They want to now tell the story of North Dakota and we built a refinery in Dickinson, North Dakota. That’s a big story in the Wall Street Journal, because that’s the first oil refinery planned out, and started since 1976; that’s a long time ago.

So there is a picture of the bulldozer right on the front page of the Wall Street Journal and a big story about North Dakota, tremendous interest and word is getting around. We have people coming from literally all over the world now, looking into opportunities in Western North Dakota

Hegg Bakken Report: One final question for you Governor. Does your office have any needs? What do you need to move forward today? What does your office need?

Governor Jack Dalrymple: I think we really have the resources; we have the plan in place, but Bill it’s all about speed you know. We have been able to move very fast, but I’ll tell you what, this oil industry also moves very fast and when they get out there and get drilling and get fracing and developing, they don’t mess around.

So we have to go like crazy to keep up with them and there are certain areas where I think the trend is in the right direction, but we still have a long ways to go. Like flaring for instance, a couple of years ago we were flaring 36% of our gas, and now we worked it down to 29%.

Its going in the right direction, but we are still you know flaring way, way more gas than we like to and these investments that have to be made in gathering and processing gas are happening, but it does take a little time to build a gas processing plant and build a new pipeline. So it’s the speed with which we do these things that becomes the big focus.