Oil and Gas Industry Is a Necessary Economic Pillar to North Dakota and Many Other Energy-Rich States

Oil and Gas Industry Is a Necessary Economic Pillar to North Dakota and Many Other Energy-Rich States

March 22, 2021

Energy-rich communities across the country depend heavily on the success of the oil and gas industry for their local budgets to fund schools, infrastructure, hospitals, and other necessary programs. This administrations’ heavy-handed approach to overregulating the sector in order to please their eco-left supporters threatens the billions of dollars the industry contributes to local economies across the country.

Geoff Simon, executive director of the Western Dakota Energy Association, writes in Inforum on the drastic effects this would have on North Dakota specifically:

The oil and natural gas industry helps educate our kids. A portion of oil and gas tax revenue goes into the Common Schools Trust Fund, which has contributed more than $1.5 billion to K-12 schools since Bakken production began. In the 2019-21 biennium alone, the fund provided more than $419 million to the state’s public school districts, and the amount continues to increase each biennium. Those are tax dollars that no longer have to come from the pockets of property owners. In addition to K-12 tax offsets, oil and gas tax revenue has provided direct property tax relief totaling $417 million.

How about infrastructure? Oil and gas taxes, distributed through the Resources Trust Fund, have delivered more than $1.2 billion for municipal and rural water systems and flood control projects. The state’s transportation network has benefited from a direct injection of $875 million, and millions in oil and gas tax revenue indirectly from the state general fund.

There are countless other benefits such as the $28 million that has gone into outdoor heritage projects, and there’s even more to come. The Legacy Fund, which receives 30% of all oil and gas tax revenue, is generating hundreds of millions of dollars in earnings each year that offset taxes that would otherwise be paid by North Dakota citizens. And now the Legislature is promoting an effort to invest more of the Legacy Fund’s principal in North Dakota infrastructure and emerging industries, creating thousands of new jobs and economic opportunity.

Not only does the industry bring in hundreds of millions of dollars in tax revenue in North Dakota, but gross business volume in the industry in 2019 added up to $40.2 billion.

Let us also not forget about the American energy jobs the industry provides. Petroleum companies and their drilling and production operations supported nearly 24,000 direct jobs, and another 36,000 indirect jobs through other contractors and suppliers. Those jobs generate $4.5 billion in salary and wages. 

In North Dakota alone the industry supports 60,000 American jobs and those jobs generate $4.5 billion in salary. Those are numbers to be reckoned with and taken into account when liberal elites in Washington push policies to tear down a sector that is the pillar of economic support for many communities across the United States.