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Press Photo by Dustin Monke/FNS Graphic
Floorhands remove pipe on the floor of Whiting Petroleum Corp. oil drilling rig southwest of Belfield on April 22, 2013.
Press Photo by Dustin Monke/FNS Graphic Floorhands remove pipe on the floor of Whiting Petroleum Corp. oil drilling rig southwest of Belfield on April 22, 2013.

1 in 7 private sector jobs tied to oil, gas: Industry accounts for 28.5 percent of wages; data could affect formula for sharing oil tax revenue on local level

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Energy Dickinson, 58602
Dickinson North Dakota 1815 1st Street West 58602

BISMARCK — North Dakota’s thriving oil and gas industry accounts for nearly one in seven private-sector jobs covered by unemployment insurance, according to data that could have a big impact on how tax revenue flows to oil-impacted cities, counties and school districts.

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A Job Service North Dakota report released Wednesday found that of the state’s 359,415 private-sector jobs covered by unemployment last year, 55,137 jobs, or 15.3 percent, were either directly involved in or related to oil and gas development.

Those jobs represented $5 billion of the total $17.5 billion in wages paid to workers counted in the report, which didn’t include most self-employed farmers but still encompassed more than 90 percent of the state’s private-sector employees, said Michael Ziesch, labor market information manager at Job Service North Dakota.

State lawmakers appropriated $120,000 last year for Job Service to identify all workers who should be included in oil- and gas-related employment for statistical purposes. Ziesch presented the report Wednesday to the Legislature’s interim Taxation Committee.

The updated data will play a key role as lawmakers consider making changes to the formula for sending tax revenue from oil and gas production back to oil-impacted areas.

“It’s a decision for this group to make, and we will,” said Sen. Dwight Cook, R-Mandan, chairman of the Taxation Committee.

The formula approved during the 2013 legislative session defined a hub city as one with at least 12,500 people and more than 1 percent of its private employees engaged in the mining industry, based on Job Service data.

Hub cities currently receive $375,000 per year in oil tax revenue for each full or partial percentage point of oil-related employment, while the largest school district within a hub city receives $125,000 per year for each percentage point.

Based on data available during the 2013 session, the hub city definition applied to Williston, Minot and Dickinson. But Ziesch said analysts “knew that was an incomplete picture” and did research to identify other industries related to North Dakota’s oil play.

Job Service identified 24,254 jobs as “direct” jobs attributed to oil and gas drilling, extraction, production and refining. That was followed by “related” jobs in the categories of transportation (10,173), infrastructure development (9,541), wholesale trade and manufacturing (6,114) and professional services such as engineers, consultants and lawyers (5,055).

“We did this at a work-site level, so the data we have are exhaustive,” Ziesch said, adding there were no multiplier effects used or “third-tier” jobs counted.

Based on the updated data, if the hub city formula were to go unchanged during the 2015 session, at least five additional cities would be eligible: Bismarck, Fargo, Jamestown, Mandan and West Fargo. Grand Forks would be right on the cusp, with 1 percent of its jobs being related to oil and gas, according to the report.

The report didn’t include the secondary employment effects of the oil and gas industry on sectors such as food, housing, health care and government services, which were considered not critical to the production of oil and gas wells. Ziesch said analysts identified 8,600 of the state’s 31,000 private employers as potentially having jobs related to oil and gas development, and they “had to draw the line somewhere.”

Job Service’s main source for the employment and wage data was quarterly tax reports of employers subject to state and federal unemployment insurance laws. The survey excluded all government workers.

Ziesch said 2014 data should be available in mid-summer 2015. Cook said the data should be updated annually because the revenue-sharing formula relies on it.

Breaking down the jobs

(Direct and Related) Oil & Gas employees, Total Oil Worker Wages, Oil & Gas Establishments, Estimated Population

County 

Billings County - 131, $10.6M, 18, 874

Bowman County - 360, $29.2M, 36, 3,214

Dunn County - 2,055, $178.9M, 168, 4,162

Golden Valley County - 106, $7.3M, 21, 1,823

Hettinger County - 37, $2.4M, 12, 2,660

McKenzie County - 5,661, $505.3M, 453, 9,314

Morton County - 775, $84.6M, 90, 28,990

Slope County - 200, $17.9M, 14, 761

Stark County - 8,374, $799.1M, 527, 28,212

Williams County - 22,896, $2.2B, 1,124, 29,595

(Direct and Related) Oil & Gas employees, Total Oil Worker Wages, Average Oil Worker Wage, Estimated Population

City 

Beach - 92, $62.9M $68,384, 1,103

Belfield - 1,433, $109.9M, $76,742, 975

Bowman - 193, $14.3M, $74,302, 1,668

Dickinson - 6,666, $663M, $99,466, 20,826

Halliday - 118, $7.4M, $63,216, 214

Killdeer - 1,465, $128.6M, $87,779, 975

Mandaree - 209, $18.2M, $87,204, NA

South Heart - 63, $4.4M, $69,507, 358

Watford City - 4,112, $364.7M, $88,690, 3,284

Williston - 19,225, $1.9B, $98,440, 20,850

Counties with the most oil- and gas-related jobs of 

Williams – 22,896 

Stark – 8,374 

McKenzie – 5,661 

Ward – 4,364 

Mountrail – 3,945. 

Counties with highest percentage of oil- and gas-related jobs

Slope – 88.4 percent

Dunn – 73 percent

McKenzie – 71.1 percent

Mountrail – 64.6 percent

Williams – 64.5 percent.

Note: Totals may not sum due to rounding. For confidentiality reasons, cities/communities are included only if they have 10 or more oil and gas establishments.

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The Dickinson Press (701) 225-4205 customer support
Mike Nowatzki reports for Forum News Service. He can be reached at (701) 255-5607.
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