Two years ago, North Dakota was so flush with money from the energy boom that lawmakers spent over $1 million to spruce up the cafe at the state Capitol.
Now, the fall in oil prices has tightened the revenue tap and the nation's fastest-growing state is contemplating a dose of austerity. The price of North Dakota sweet crude has fallen by nearly half from a year ago to about $47 per barrel.
On Tuesday, only 100 rigs were drilling in the state's oil patch, barely half the number a year ago and the lowest since March, 2010. Each active oil rig represents about 175 direct and indirect jobs in North Dakota. The level of drilling is not enough to keep North Dakota's oil production, which is second only to Texas, at its current rate and it could fall slightly over the next two years.
"We're starting to see a financial strain on all aspects of the industry," said Ron Ness, president of the North Dakota Petroleum Council, which represents some 500 companies. That is bad news for state government. In just four months, the state's projected revenues for the next two years have gone from $8.3 billion in December, to $4 billion in January and just $3 billion in the latest forecast.I don't know exactly what "...$1 million to spruce up the cafe at the state Capitol" was all about but if accurate ....
.... and then folks wonder why voters are cynical.