North Dakota Conservation Activists Aren't Honest About Cost Of The Ballot Measure

Conservation activists backing the Clean Water, Wildlife and Parks Amendment are pretty sensitive about the cost of their measure. As they collect signatures to put it on the ballot in November, they claim that it will only divert about $150 million per biennium from oil extraction tax collections.

Steve Adair – Ducks Unlimited regional boss and chairman of the North Dakota Clean Water, Wildlife and Parks Coalition – uses that figure in an interview with Brad Dokken for the Grand Forks Herald.

The problem for Adair, who accuses opponents of the measure of misleading the public elsewhere in the interview, is that his numbers are badly outdated. Something he no doubt knows.

Here’s the exchange:

Q. How much money would the amendment raise, based on current projections?

A. We ourselves are not making projections, but (the state Office of Management and Budget) has said that if it was in place in this biennium — so 2013 to 2015 — it would have been $75 million a year, $150 million a biennium, so that is the current value of that.

I went to the Director of North Dakota’s Office of Management and Budget, Pamela Sharp, this morning and asked her for a copy of the analysis Adair is using.

“That was not exactly an analysis,” she told me. “It was simply applying the 5 percent to the legislative forecast for extraction tax and then rounding. The forecast for extraction tax was $2.83 billion for the 13-15 biennium and 5 percent of that amounts to about $141 million. We rounded up to $150 million because production is higher than the forecast assumed.”

So Adair’s numbers are accurate? Well, not really. In the current biennium extraction revenues have come in far above expectations. “[C]learly we are running ahead of forecast because that forecast assumed production going to about 830,000 barrels a day and we have already hit one million,” Sharp told me.

Just to be clear, just over halfway through the current biennium we’ve already hit the daily oil production forecasted for the end of the biennium. Thus, oil extraction tax collections are significantly higher than what the OMB’s previous (and pretty inaccurate) forecast tells us.

Adair no doubt knows this – it was headline news that the state had hit 1 million barrels per day in production – yet he persists in using the extremely outdated forecast.

That’s just not very honest.

Meanwhile, here’s where the amendment’s opponents (calling themselves North Dakotans for Common Sense Conservation) pin the cost:

Under the proposed amendment the conservation fund would receive almost $300 million per biennium ($2.8 million per week) right now. Over the amendment’s 25-year lifespan, that amount would get as high as $400 million per biennium ($4 million per week) and at least 75% of that has to be spent each year. It amounts to $4.8 billion over the next 25 years.

That sounds more in line with current levels of oil production, though projecting future revenues is difficult given how unpredictable the state’s growth in oil production has been.

Still, there’s no question that the amount of money diverted by this amendment is significantly more than what its backers care to admit.

Rob Port is the editor of SayAnythingBlog.com, a columnist for the Forum News Service, and host of the Plain Talk Podcast which you can subscribe to by clicking here.

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