Oil revenue way up for tribes; money going to roads, other infrastructure
NEW TOWN — In less than one year, the Three Affiliated Tribes have collected $184 million in oil tax revenue, nearly equal to the amount collected during the entire 2011-13 biennium.
The jump in revenue is primarily due to increased oil production at Fort Berthold, which now produces more than 270,000 barrels per day and accounts for nearly 30 percent of North Dakota’s oil production.
Tribal Chairman Tex Hall said Wednesday if the Fort Berthold Reservation were a state, it would be the No. 7 top oil producing state in the country.
“That’s how fast we’re moving,” Hall said during the Mandan, Hidatsa and Arikara Nation’s Oil and Gas Expo.
But the oil development comes with impacts for the reservation, and Hall outlined several major initiatives the tribe has planned to address them.
The tribe plans to spend $100 million to improve roads on the reservation that have taken a beating from heavy truck traffic, Hall said.
In addition, the tribe is planning $100 million for a proposed bridge project and $65 million in housing for medical staff as its clinic expands to a 24-hour ambulance service in response to an increased number of accidents, Hall said.
“These are all critical parts of the infrastructure needs,” Hall said.
During all of 2011-13, the Three Affiliated Tribes collected $188 million in oil tax revenue, according to the Office of the State Treasurer. Since July 1, the tribe has already collected $184 million in oil tax revenue.
In addition to the gain in revenue from increased oil production, the tribe is now getting a larger share of oil tax dollars resulting from a new tax agreement with the state.
Previously, the state received 80 percent of some of the oil tax revenue while the tribe received 20 percent, which Hall called “totally unfair.” An agreement reached at the end of last year’s legislative session changed the split to 50-50.
The tribe was projected to receive at least $80 million more in 2013-15 as a result of that agreement.
However, with income from oil tax revenues running ahead of projections, Senate Majority Leader Rich Wardner said he estimates the tribe will gain at least $100 million.
Wardner, who spoke during Wednesday’s event along with Senate Minority Leader Mac Schneider, said it was “music to his ears” that the tribe is spending the additional tax dollars on roads.
Negotiations between state and tribal leaders were at times tense a year ago when some legislators wanted to stipulate in the agreement that the oil tax dollars be spent on roads. Tribal leaders objected to state government telling the sovereign nation how to spend its money.
Wardner, a Dickinson Republican, called for the state and the tribe to work more closely together to address issues such as natural gas flaring, handling of oilfield waste and drug trafficking.
“Their issues are our issues,” Wardner said.
One of the major initiatives the tribe is working on is a three-quarter of a mile bridge to cross the Little Missouri River to provide easier access to the Twin Buttes area, Hall said.
The Charging Eagle Bridge, estimated to cost $100 million, would cut a 115-mile commute from Twin Buttes to the rest of the reservation in half, providing better access to health care, education and jobs, Hall said. Many oil companies have said there could be another 100 to 200 wells in Twin Buttes if they could access the area with a bridge, Hall said.
The tribe is holding public meetings on the proposal and has received concern from Twin Buttes community members about the potential for increased crime, Hall said.
In addition, the tribe plans to spend $50 million on a rail spur and site development for a rail-loading facility and diesel refinery near Makoti.
Thunder Butte Petroleum Services CEO Richard Mayer said the rail-loading portion of the project is expected to be complete in September with the refinery scheduled to open in spring of 2016.