Oil and Natural Gas Industry Benefits Every North Dakotan
NORTH DAKOTA - People who live in North Dakota know we produce a lot of oil—more than 5 billion barrels since the first well began pumping in 1951. But most people probably don’t know the tax revenue it generates has delivered tremendous benefits to every corner of the state.
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.
It’s not just tax revenue from oil and natural gas production that benefits the state. Virtually every industry transaction generates sales tax revenue, and every company and their employees pay income tax. How much income and how many jobs? Gross business volume in the oil and natural gas industry added up to $40.2 billion in 2019. Sales taxes paid at the state and local level amounted to $3.8 billion. Petroleum companies and their drilling and production operations provided nearly 24,000 direct jobs, and another 36,000 indirect jobs through other contractors and suppliers. Those jobs generated $4.5 billion in salary and wages.
And the bottom line no one should ever forget – oil and natural gas are an essential component of modern society, providing nearly all of our transportation fuels, as well as providing feedstock for thousands of other products that we use in our daily lives.
There’s one other important item North Dakota’s petroleum industry delivers for which everyone should be grateful. Every barrel of oil we produce in America lessens our dependence on foreign sources, promoting U.S. energy independence and national security.
K. William Boyer is the Managing Editor of the Devils Lake News Journal. He can be reached at firstname.lastname@example.org, or by phone at (701) 662-2127.
Be sure to follow Devils Lake Journal on our twitter page, @devilslakenews, and like us on Facebook!