Regional Impact

By Luke Geiver | March 28, 2013

The North Dakota Petroleum Council wants the entire state to know the Bakken oil patch impacts more than just four counties. During a one-day press tour, the NDPC team held two separate press conferences, one each in Bismarck and Fargo. The team was accompanied by a pair of economists, several business owners operating in the Bakken, and a Williston, N.D., city administrator. The purpose of the press tour was simple, to explain the results of a 2011 study that assessed the economic impact of the oil and gas industry on the state’s economy. Based on the numbers generated from the study, the NDPC has some impressive evidence to back up its stance on the statewide impact of the Bakken.

In 2011, the oil and gas industry contributed more than $30.4 billion to the state’s economy while creating roughly 60,000 direct and indirect jobs. According to the study, for every dollar spent in the state by the oil and gas industry, another $1.59 in additional business activity was generated.

The study was completed by Nancy Hodur and Dean Bangsund, both with North Dakota State University’s Department of Agribusiness and Applied Economics. The backdrop for the Fargo press conference included dark grey 400-gallon oil storage tanks, welding machines, cement floors and the absence of the fabrication team at TrueNorth Steel Inc.’s, Fargo facility that had to cease production for the event. Before introducing Hodur and Bangsund, Ness stood at a podium in front of the presenters and business owners, smiled at the reporters and attendees and looked back toward the news cameras. “The oil patch is more than just the four counties,” he said.

Expanding on Ness’s comments, Bangsund outlined the structure of the study, which recorded the economic impact of four sectors in the oil and gas industry: production, exploration, transportation and processing, and infrastructure buildout. “One of the key highlights of the study,” he said, “is that we were able to document the growth and expansion that has benefited the North Dakota economy.”

Although the impact numbers are big, Hodur, who spoke following Bangsund said, “I don’t think any of us are surprised.” The state has seen steady growth since 2005 when the NDPC first started funding the studies. “This clearly illustrates that oil and gas is part of the thriving economy,” according to Hodur. And, the economic punch put forth by Bakken-related activity has not peaked or started a downward trend even with drilling efficiencies. “I think that this is just the start of the story, not the end of the story,” adding that, “there is an economic development opportunity that we have not seen in decades. We are standing right in the midst of that.”

Dan Kadrmas, president of TrueNorth Steel, helped to show just what Hodur was referring too. Since it began supplying the Bakken region with products ranging from corrugated pipe to oil storage tanks, the company has added employees, products and sales. “The Bakken has allowed us to diversify,” he said. And, as the president of the Central Fabricators Association, Kadrmas said he has also seen why the Bakken oil and gas play has such a great impact on construction and fabrication firms. Since 2009, other regions from Michigan to Texas were seeing significant contraction in construction, he said, but not in the Bakken. “I’ve talked to a number of people around the country through our association, and this is the best market to be in in the U.S. today.”