Governors Create Energy Blueprint

By THE BAKKEN MAGAZINE STAFF | July 31, 2013

The Western Governors Association believes the nation’s energy future runs through the West. The group has created what it believes can be an energy blueprint for the Western, and possibly the entire U.S. Made up of 22 governors, WGA has put together three documents to outline the available energy resources and energy needs in the region. Along with the assessment work done by the WGA, the group has also assembled essays and perspective pieces from each governor member. Two Bakken-linked governors wrote on the role of shale oil usage and development.

North Dakota Gov. Jack Darlymple titled his perspective piece “Fossil Fuels Play a Critical Role,” and highlighted the numbers that have advanced and will advance oil and gas production in the state. According to the North Dakota Industrial commission, he wrote, a typical 2012 Bakken well has an expected production life of 45 years and will produce 615,000 barrels of oil. Over the course of their production, each of these wells is expected to produce $20 million in net profit, pays $4 million in taxes, $7 million in royalties, $2 million in wages and $2 million in operating expenses.

Because of those numbers, North Dakota will continue to pursue policies that support responsible development of crude oil and natural gas resources within the state, he wrote, adding, “We believe that energy development would be best served by a federal government policy that allows states considerable input and control over the development of resources within their boundaries.” Those boundaries include activities such as hydraulic fracturing policy creation, he said, instead of a one-size-fits-all federal approach, “that doesn’t match the realities present in each state.”

Montana Gov. Steve Bullock also addressed the role the Bakken will play in the state’s energy vision. In his piece titled, “Montana’s Energy Diversity A Regional Asset,” Bullock pointed to the opportunities and challenges his state has incurred due to the Bakken. The state has become, in part, a supplier of goods to the region. Transloading facilities bringing pipe and proppant to the Bakken play have created jobs. “Diesel mechanics, truck drivers, contractors and other occupations are in short supply,” he wrote. At the same time, he also said, the influx of workers has strained the water infrastructure and resources of the state, an aspect of the play he hopes to continue to work on. The state has positioned itself to build infrastructure necessary to move products to market, he added. And, he hopes the state can better utilize the resources it currently has. According to Bullock, nearly 88 percent of crude oil refined in the state is piped in from Canada while Montana crude flows elsewhere.