It’s an inconvenient truth for those who are enamored with big, intrusive government that the key to North Dakota’s economic success has been not what the government has done, but what the government hasn’t done.
It wasn’t deft public policy maneuvering by brilliant politicians that put oil under the ground in the oil patch. It wasn’t a government program that developed and perfected production innovations like horizontal drilling and hydraulic fracturing.
But our state government does deserve some credit for the oil boom. Rather than engendering a hostile relationship between oil regulators and the oil industry, North Dakota’s leaders have preferred a partnership.
This is in sharp contrast to the regulatory approach we’ve seen from, for example, the Obama administration which is aimed unapologetically toward implementing a green energy agenda by hamstringing cheap, reliable fossil fuels. In North Dakota, regulators have a more prudent relationship with energy producers which recognizes that fossil fuels are a necessary part – indeed, the foundation – of our energy grid.
The federal approach is aimed at slowing down and phasing out fossil fuels. North Dakota’s approach is to allow the market, not political agendas, to drive energy production.
North Dakota Democrats want the Obama administration approach, thus their recent attacks on North Dakota’s top oil regulator Lynn Helms. Democrats accuse Helms of having a conflict of interest because state law requires that he be both a regulator and a promoter, but the case they make for that conflict is pretty weak.
First, it’s worth noting the statutory mandates for regulation and promotion aren’t unique to Helms’ office. The State Commissioner of Agriculture also has, in addition to regulatory duties, a mandate under the law to promote the various facets of the state agriculture industry. North Dakota’s history has been dominated by an agrarian economy, and we’ve long recognized the wisdom of regulators who also have skin in the game when it comes to the success of the industries they regulate.
Second, the complaints against Helms seem more than a little unreasonable. In a letter written by Democrat legislative leaders Senator Mac Schneider and Rep. Kenton Onstad, Helms is accused of allowing a waste pit to be placed over a city water supply. That’s fair criticism, and Helms copped to the error.
The other complaints launched by Democrats fall flat.
Helms is accused of keeping the public and legislators “in the dark” about the Tesoro pipeline oil spill near Tioga. Democrats point out that while Helms was mum about the incident publicly, he sent an email to his daughter containing specifics about the derailment.
But here’s the thing: The State of North Dakota doesn’t regulate pipelines. That’s the federal government’s job. The state agency that responded to the pipeline leak was the Department of Health. While it’s fair to criticize the Health Department for not sending out a press release about the spill sooner after it happened, it wasn’t Helms’ responsibility to speak out.
Democrats also accused Helms of poo-pooing the idea that Bakken crude oil is more volatile than other types of crude, saying he called it a “myth.” But Helms himself said he was using that word to describe efforts to reconcile facts and hyperbole.
“Maybe what got to people was the word ‘myth,’” Helms told reporters on January 14th. “Sometimes they are proven true or false. There wasn’t any intent to characterize that this would come out false … because what we need to do is do the science, collect the facts, and see where that takes us.”
It’s not surprising that Democrats, who are philosophically disposed to promoting aggressive (dare we say hostile?) relationships between government and industry they dislike would find Helms’ admittedly enthusiastic promotion of energy production in North Dakota to be unseemly. And it’s not at all surprising that this political party, desperate to wrap their hands around any issue that might bring them back into relevance in the state, is throwing these grenades in an election year.
But let’s face it: North Dakota’s light regulatory touch has been the cornerstone of the state’s prosperity, whether we’re talking about energy, agriculture or some other industry.