North Dakota oil boom minting up to 2,000 millionaires a year (Red State)

[Bad_Daddy 2,209]

http://news.yahoo.com/north-dakota-hard-tell-oil-millionaire-regular-joe-193713808.html

In North Dakota, hard to tell an oil millionaire from regular Joe

By David Bailey | Reuters – 6 hrs ago

STANLEY, North Dakota (Reuters) - The retired men shooting the breeze at Joyce's Cafe in Stanley don't look like oil barons but appearances can be deceptive, especially in North Dakota.

Take Robert Western, a farmer who was dressed in rumpled overalls and a baseball cap as he sipped coffee and discussed the oil boom that has transformed this once sleepy town.

"Some of the younger people buy a lot more - machinery, vehicles, things like that," said the 75-year-old Western. "The rest of us, I guess it doesn't alter our lifestyle a great deal. I don't have a lot of needs."

After he left, his friend Earl Rogstad remarked to a visitor: "It's too bad Robert didn't have his airplane ready... He offered last summer to fly me over and see (the oil wells) from the air."

Western did not mention that he is co-owner of a Piper single engine propeller plane, according to FAA records. He did admit to receiving oil royalties from wells on his farm but locals said he is far from the richest man in town. It is not clear whether Western is a millionaire or merely wealthy.

"You can't tell the average Joe farmer from the average Joe millionaire," said Ward Heidbreder, Stanley city coordinator.

Average income in Mountrail County, the hub of the North Dakota oil production boom, roughly doubled in five years to $52,027 per person in 2010, ranking it in the richest 100 U.S. counties on that basis including New York City, and Marin, California.

The boom could be creating up to 2,000 millionaires a year in North Dakota, said Bruce Gjovig, founder of the Center for Innovation at the University of North Dakota.

Many oil region residents receive $50,000 or $60,000 a month in oil royalties and some more than $100,000, said David Unkenholz, a senior trust officer at First International Bank & Trust in Watford City, the seat of McKenzie County, which is the No. 2 oil producing county in the state behind Mountrail.

The oil is so plentiful that in Stanley, where the population has about doubled to 3,200 in the last five years, a well drilled under the town means that many homeowners could receive a small oil royalty check.

A lot of North Dakota's new wealthy simply stash the cash in savings and checking accounts with "ridiculously large" balances, banker Unkenholz said.

The monster homes, ostentatious diamond rings or luxury sports cars of California and New York are virtually nonexistent in North Dakota. Looking for wealth here is a subtle exercise.

Locals point to pickup trucks. The boom has boosted truck sales decked out with extras at Stanley's Ford dealer, Prairie Motors Inc, co-owner Gary Evans said.

"They are a lot more elaborate, a lot more loaded up than what they used to be, even the accessories," Evans said. "There is a big demand for accessorizing a pickup truck - everything from running boards to grill guards to chrome wheels."

Evans, 66, a part owner of the dealership since 1970 and manager of the services business, said most residents have not changed their buying habits, especially those over 50.

"Some of these people you could look at and you don't even know if they have an oil well or not, and they may have several," said Evans, who grew up on a family farm west of Stanley and also has some mineral acres.

OIL MATH

One reason rich locals do not brag about their money is because some residents do not own precious mineral rights to the land and have missed out on the boom. Land and mineral rights can be separated and sold in North Dakota and often are.

Royalties are paid based on oil produced and sold mainly in sections of land of one or two square miles in size. The owner of the mineral rights receives the royalties. It can be a complex exercise to divide rights among multiple land heirs.

In simple terms, a well producing 100 barrels of oil per day sold at $80 a barrel would generate $248,000 in a 31-day month. The state collects taxes on extraction and production of about 11.5 percent. From there, if the rights holders have one-fifth royalties, they would receive $43,896 a month.

In July, North Dakota wells produced an average of 92 barrels per day but some produced more than 10,000 barrels in a month, a windfall for the royalty owners.

Some of that money has gone to area churches in the form of anonymous donations and some to the schools for technology, said Heidbreder, the city coordinator.

It's not just land owners who are benefiting from the boom. Oil has also brought high-paying jobs, and some of that money filters through to local businesses.

So-called man camps have sprung up in North Dakota, where oil workers live in makeshift dormitories.

At a man camp in Williston run by workforce housing provider Target Logistics, the 26 kitchen staff, all from outside the state, work 84 hours a week for six straight weeks, then take two weeks off, executive chef Jason Freeman said.

Target Logistics has several man camps in western North Dakota, including a hotel and cabins at Stanley, mainly for energy employees. Its camp in Williston, the largest area town, looks like a military base with room for about 800 workers, a huge cafeteria, weight room, lounge and other facilities.

"This is a thriving economy. This doesn't exist anywhere else," said Freeman, who lives in central Minnesota.

There are downsides to the oil rush. Crime reports are up in Stanley, even if not as much as the population. Aggravated assault reports rose 55 percent last year in the oil producing counties, according to state figures.

Gayleen Grote, who lives on a family farm north of Tioga in the oil patch, said she has a permit to carry a concealed weapon and sometimes puts a semiautomatic pistol in a bra holster.

"There is a lot of testosterone," said Grote, adding that though she has never had to get aggressive, male drivers have stopped several times while she was walking by herself on area roads. "There is nothing to do but drink," she said.

Edited October 4, 2012 by Bad_Daddy

[Mr. Big Dog 10,747]

Look at what the Obama economy does. Thousands of new millionaires.

[Bad_Daddy 2,209]

Look at what the Obama economy does. Thousands of new millionaires.

California has 100x's the gas and oil that North Dakota has and where's their boom? The key is that North Dakota is a Red State with natural resources and California is a Blue State with natural resources.

Edited October 4, 2012 by Bad_Daddy

[TBoneTX 46,201]

Look at what the Obama economy does. Thousands of new millionaires.

For him to tax.

[lostinblue 1,989]

Look at what the Obama economy does. Thousands of new millionaires.

Drink a little more kool-aid....You dimwits would shut down every oil well if you could..

North Dakota summit aims to break pipeline bottleneck

Posted on 06/15/2012 by Dan Haugen

—With limited pipeline capacity, much of North Dakota's oil is shipped to market by truck. (Photo by Daniel Liu via Creative Commons)

In North Dakota, getting oil and gas out of the ground is the easy part.

Getting it out of the state is where things get tricky.

North Dakota Gov. Jack Dalrymple hosted a summit Thursday morning to discuss one of the state’s most pressing questions: how to move hundreds of thousand of barrels of crude from its oil fields every single day?

The state’s pipeline network, like so much of its infrastructure, has been overwhelmed by the recent oil and gas boom. That’s pushed oil onto trucks, which has led to a big increase in traffic and wear and tear on roadways. Natural gas, meanwhile, is commonly being burned off due to lack of pipeline access.

(Popular Mechanics had a good visual guide the other day on how oil gets out of North Dakota.)

Dalrymple said he supports plans to expand the state’s pipeline network, which will reduce truck traffic and gas flaring and better connect the state to markets in the south and east.

“We continue to expand our pipeline capacity so that we can significantly reduce truck traffic on our roads, reduce flaring, other impacts and at the same time expand our market opportunities,” Dalrymple said.

About 100 people attended the pipeline summit, and more watched online via webcast.

Six proposed pipelines, along with expansion of existing ones, are forecasted to increase the state’s pipeline export capacity from 413,00 barrels per day in 2011 to more than 1.5 million barrels per day in 2015. It’s also planning a major upgrade of rail shipping infrastructure that could boost export capacity well beyond 2 million barrels per day.

In total, the investment between 2011 and 2013 will exceed $3 billion in the state.

“I think it will catch up,” says Tony Straquadine, manager of government affairs for Alliance Pipeline, which is proposing a 79-mile pipeline from the Williston Basin to its mainline that runs to Chicago.

“These things never match up perfectly,” he said. One reason: “Most pipeline companies do not build pipelines on a speculative basis.”

Part of Thursday’s event was a refresher course for pipeline developers on landowner relations. It’s been a few decades since the state saw a significant expansion of its pipeline network.

Justin Kringstad, director of the North Dakota Pipeline Authority, said even after the local bottlenecks are fixed, there are more potential challenges to be addressed. The pipeline system is set up to deliver oil from North Dakota to the Great Lakes region, where there is congestion and oversupply. The state is strategizing ways to move exports by rail or alternative pipelines to other parts of the continent.

They’re issues that won’t be going away anytime soon.

“We know that crude oil and natural gas production are going to continue to grow for the next number of years,” Kringstad said. “We are just at the beginning right now.”

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