Saturday, January 16, 2021

North Dakota Budget Talk -- 2021 - 2023 Biennium

I normally don't pay much attention to North Dakota legislative activity, but a four-hour flight from Grapevine, TX, to Seattle, WA, gave me an opportunity to spend some time doing just that. 

I was surprised how interesting this all was.

Some data points from Geoff Simon's top ND energy news for the week:

  • ND legislative appropriations committee adopted an interim revenue forecast for the 2021 - 2023 biennium;
    • income forecast:
      • $40 / bbl through the biennium
      • production to decline to 1.1 million bpd (2021-2022)
      • production to decline to 1.0 million bopd (2022-2023)
      • this would add just under $3 billion in oil tax collections over the coming biennium;
      • compares to $3.5 billion expected in the current biennium (2019 - 2021)
    • expenditures:
      • $434 million to western North Dakota (formulaic)
      • that would be down about 16% from the $518 million in the current biennium
  • Legacy Fund: would realize $780 million in deposits
    • from that $780 million:
      • Common Schools Trust Fund: $127 million
      • Foundation Aid Stabilization Fund: $127 million
      • Three Affiliated Tribes: $373 million
  • other income:
    • sales tax revenue: $1.74 billion
    • personal income tax: $816 million
    • corporate income tax: $260 million
    • motor vehicle excise tax: $260 million

Director's comments with release of Director's Cut:

  • monthly crude oil production held steady due in part of 74 new well completions in November
  • look at this: in December, 44 wells were completed, most of which were credited to the state's CARES Act frack incentive -- Helms said the number of completed wells in December would have likely dropped to zero without that incentive
  • unlikely to see an increase in drilling activity unless prices stabilize above $55/bbl
  • the industry continues to meet the natural gas capture target, 93%
  • slightly slower on the reservation due to difficulty obtaining right-of-way for construction of gating pipelines (flaring will become less of a problem on federal land if the DAPL is shut down)
  • mentioned the completion of Outrigger Energ's Sanderson NGL processing plant 15 miles west of Williston; capacity: 250 million cubic feet of gas per day (42,000 BOEPD?)

DOT:

  • proposed budget: $1.8 billion for new biennium
    • about $400 million more than current biennium
    • that $400 increase possible if bonding (Legacy Fund) proposal accepted
  • widening US Highway 85 from Watford City to I-94
    • 2021 - 2023 budget includes $50 million to widen US Highway 85 from Watford City south to Long X Bridge
    • requires US Congressional support
    • phase 2: US Highway 85 from Long X Bridge to state highway 200
    • phase 3: US Highway 85 from state highway 200 to I-94

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