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Dennis: Encouraging feedback on ND's oil boom response

Tom Dennis

"O wad some Power the giftie gie us, to see oursels as ithers see us!"

-- Robert Burns

In North Dakota, residents fret over how their state has responded to the oil boom. Has the state government's response been too much, too little or just about right? Are the infrastructure needs in the West being shortchanged, or are towns and cities building out far beyond what'll be needed when the boom goes bust?

Enter FedGazette, the regional business and economics newspaper of the Federal Reserve Bank of Minneapolis, and hands down the top source of high-level economic analysis of the central and upper Midwest.

FedGazette has watched and studied the oil boom and North Dakota's response for years and recently offered an analytical roundup. It's worth North Dakotans' attention, because it's a chance not only "to see oursels as ithers see us," but also to hear what some very particular "ithers" -- namely, the Federal Reserve's analysts and economists -- have to say.

FedGazette's verdict: On balance, North Dakota has responded reasonably well.

As residents know, the boom creates tremendous challenges along with its income gains. "While many obvious economic benefits flow from the Bakken oil boom, it's akin to a newborn baby, who brings excitement and joy to the whole family," FedGazette notes.

"But as any parent will attest, there is an awful lot of work involved, from constant feeding and diaper changes, to sleepless nights and an endless vigil over the little one's health and safety.

"In a similar way, local communities and the state Legislature are realizing that oil production and its concomitant economic activity and wealth come with a laundry list of things to fix and otherwise spend money on. ... Connie Sprynczynatyk, executive director of the North Dakota League of Cities, likened the development challenge facing western communities to having a Top 10 list of needs, 'and all of them being No. 1.'"

The rest of the overview describes those challenges and documents North Dakota's response. And what's notable is the sense that while none of the responses is perfect, most if not all seem reasonable and prudent, given the facts that the situation is so dynamic and there's no real precedent for how to respond.

For example, "over the past several legislative sessions, lawmakers in Bismarck have unhinged the lid on public spending and crafted a complex allocation system for oil and gas revenues. ...

"Inevitably, despite the financial largesse, not everyone is happy. The biggest disagreements concern how much money is reaching oil-impacted areas. ... But the state has gotten in the laudable habit of squirreling money away in rainy-day and permanent trust funds. It also has been cautious in committing to permanent spending programs, preferring one-time expenditures -- much of it to deal with oil impacts -- that are not automatically assumed into future budgets."

Remember, an overview by an arm of the Federal Reserve doesn't have to read that way. Analysts could be highlighting example after example of misplaced priorities, wasteful spending or tax dollars getting pocketed before being put to legitimate use.

But the Fed's not reporting those things, which strongly suggests that the agency isn't finding them. And that's reassuring, as is always the case when the portrait of how "ithers see us" turns out to be flattering after all.

Dennis is the opinion editor of the Grand Forks Herald, which is a part of Forum News Service. Email him at