With oil prices falling there’s been a lot of doom and gloom about North Dakota. The state got an ugly new tax revenue forecast earlier this week, and stories which used to tout the state’s plentiful jobs and rising incomes have been replaced by stories like these.
The boom is, without a question, over. Now the citizens of North Dakota have to figure out what comes next, and it isn’t necessarily a bust. Despite a more than modest tempering of tax revenue forecasts, the state still has plenty of money. Unemployment remains low. And despite clear evidence that the state is going to go through a rough patch in the next year or so, there’s reason to be hopeful.
Case in point, Continental Resources CEO Harold Hamm is still betting on North Dakota:
WILLISTON – Continental Resources Inc., the second-largest North Dakota oil producer, spent $2.3 million at a state land auction for the right to explore for crude on 160 acres, outbidding its nearest rival with just seconds left on the clock.
The deal, secured this week with a check to state officials, shows that despite the more-than 60 percent drop in crude prices since last summer, demand for oil-rich acreage in the state remains high. With most of its mineral rights spoken for, any new auctions tend to elicit strong interest, usually from smaller companies hoping for a sliver of North Dakota’s Bakken shale formation.
While larger industry peers have curbed 2015 output forecasts, Continental has taken a bullish view and expressed confidence oil prices will rebound by December. Chief Executive Harold Hamm told Wall Street last month he expects the company’s output to jump as much as 20 percent this year.
The most immediate problem before North Dakota oil producers – indeed, domestic oil producers in general – is that we’ve got too much domestic oil piling up.
This is why lifting the oil export ban is so vitally important. The prohibition on exporting unrefined turns domestic oil producers into a captive market for the refiners. They have nowhere else they can go with their oil.
Why should we be hamstringing oil producers in a way we’d never do to, say, agriculture producers? Shouldn’t American companies producing an American product be free to sell that product to willing buyers whether they be here in the United States or abroad?