SD lawmakers agree to prepare for big oil

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PIERRE, S.D. (AP) — South Dakota lawmakers decided Monday to appoint a special committee that will study what the state must do to prepare as North Dakota’s oil boom moves south.

The increase in oil and gas drilling is expected to bring increased truck traffic, housing shortages, skyrocketing rents and the need for additional restaurants, truck stops and other services in western South Dakota.

Sen. Ryan Maher, R-Isabel, said the influx of oil and gas workers will require additional law enforcement, firefighting and ambulance services. And small towns in western South Dakota will be faced with demands that exceed their current water and sewer systems, he said.

“I think it would serve us well to bring all parties to discuss what could potentially happen up there,” Maher said.

The Executive Board, a panel that handles management and administrative issues for the Legislature, voted unanimously Monday to set up a special committee to study the expected spread of oil and gas development from North Dakota’s oil patch into South Dakota. The topic finished first in a survey that asked lawmakers what special studies should be conducted before the start of next year’s legislative session.

The board also agreed to set up a committee to study the funding of state-run universities and technical schools. Sen. Bob Gray, R-Pierre, said the study could explore funding the six universities and four technical schools with a system that rewards those that do the best in providing graduates needed to fill critical jobs.

The Executive Board rejected proposals for studying the funding of school districts and examining issues related to large-scale livestock operations.

After North Dakota’s oil industry began to boom in the past decade, South Dakota started an effort to encourage more oil and gas exploration in the state. Part of that effort has been to put drilling and geological information on the Internet to help companies decide where to explore in South Dakota.

However, officials in North Dakota have advised South Dakota to begin preparing for both the tremendous wealth and problems that will accompany increased oil and gas development.

Maher, who lives near the area expected to see the most drilling activity, said each drilling rig brings 80 jobs, half for the drilling operation and half for companies that provide services to rigs. The demand for housing will drive up rents to the point that people working outside the oil industry will have trouble finding a place to live, he said.

Sen. Tom Nelson, R-Lead, said South Dakota cannot ignore the coming surge in oil and gas drilling.

“It’s not a matter of if, it’s when,” Nelson said.

Reuben Bezpaletz, a legislative staffer, said the study committee may also want to look at a state law that allows ownership of mineral rights to be severed from ownership of the land’s surface. When many South Dakota farms and ranches were sold, the original owners kept rights to any minerals under that land, he said.

As mineral interests have been passed down through several generations, they have been divided among many heirs, Bezpaletz said. Companies will be reluctant to explore in an area where it’s difficult to track down all the people who hold a share of the mineral interests, he said.

However, the state holds the mineral rights underlying much land in South Dakota, Bezpaletz said.

“If we did make a major strike in South Dakota, the state would be rolling in money,” he said.

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