Brent Bogar, Jadestone Consulting, shares the results of a North Dakota oil and gas tax revenue study. The purpose of the study was to review the oil and gas extraction and gross production tax collections by the state of North Dakota, from 2008-2018, and to detail where and how that funding has been used.
The study breaks down the revenue distribution by the programs and political subdivisions receiving the funds and tracks how the revenues have been used through different state funds and distributions authorized by the legislature.
From 2008-2018, oil and gas extraction and production taxes have raised almost $18 billion for the state, which accounts for almost 44 percent of total tax revenues collected by the state during that period. Over the last five years alone, oil and gas extraction and production taxes accounted for more than 50 percent of all tax revenues collected by the state.
Bogar also talks about the need to dispel myths regarding the oil taxes and revenues. Community donations and nomadic workers were also discussed in detail as an overlooked portion of hidden taxes and revenue stopgaps.
Support American Entrepreneurs! Click on the image and use the promo code OTIS!
Below is the raw, unedited transcript from our artificial intelligence translator.
Brent Bogar
Name is Brent Bogart work with jade stone consulting.
Jason Spiess
Excellent. Thank you for joining the program here today. And one of the things that we wanted to talk to you about was a new study or a new, I guess, uh, paper, white paper or something along those lines. It's been done. It's a projection of oil and gas, um, taxes or a collection of something along those lines. It has to do with the oil and gas taxes and the state of North Dakota.
And I'll let you kind of fill in the blanks from there because I'm, this is new. I mean, I just got this press release yesterday and I haven't really even had a chance to take a look at it. So, um, let's, let's talk a little bit about it and you're gonna take the lead on it because I'm skimming as we go.
Brent Bogar
Sounds good. Yeah. What we've got here is the North Dakota Petroleum Council in Western Dakota Energy Association. They partnered to put together a report that really went back and looked at since the, um, really kind of the birth of the back in um, 2007, um, through 18, which for the state would be fiscal years 2008-2018. Look at all of the taxes specific to the oil industry.
So that would be the tax and the extraction tax and just look at those two taxes and say, how much has the state collected in those tax dollars? And where have those tax dollars gone? The Petroleum Council, they had the position of, we want to, we want to see where the money's going as the industry, they pay these taxes. Um, and so where is the money being put to use Western Dakota Energy kind of the same thing that they wanted to see, you know, um, kind of in a sense breakdown this east
versus west wall that everyone has benefited from the oil industry and the taxes that are being paid by the state. Um, there's always going to be the argument of who needs more once more. Um, I joke and say, you know, every community wants an extra 5% but At some point it adds up to over 100%. So no one's ever gonna get exactly what they want. But that's what this kind of the background of this report was, is, Let's, let's look at this and let's see how much has gone in to the state and where
has it been put to use. And so we um gathered that information together. Um, it turns out that over the last 11 fiscal years for the state, we're just shy of $18 billion local property taxes. This is just those two specific taxes to this industry. Um, the extraction and production tax and where that money goes. Um, it's pretty phenomenal when you think about that. Um the numbers show that, you know, for the state, the state collects a number of taxes.
We're talking over the last five years, uh, the extraction and production tax coming into the state that the states collected is 50% of all of the taxes that the state has collected, that sales tax, income tax, motor vehicle tax. When you total up all the taxes that the state collects Extraction and production tax equal 50% of those dollars. So it's a pretty significant amount of the state.
Jason Spiess
So you're saying out of all the taxes, 50% comes from those two taxes.
Brent Bogar
That's correct. And what,
Jason Spiess
Over the last five years and that, Does that include income tax and all those others too? Or just some certain areas. So out of all the taxes in North Dakota, 50% of them come from the production and extraction tax. That is absolutely incredible. Is that, is that the norm in states like texas and you know, Alaska states that, you know, are in the top new Mexico, the top four for oil
production? Or is that something unique to North Dakota? Because I've always been told that North Dakota has the highest extraction tax or one of the highest in the nation.
Brent Bogar
Yeah, it's not the norm, Jason, is that this is um, that level of dependency of revenues coming from a single industry like texas, um there's a number of, obviously when we start getting into tax policies comparing state, two states always a tough thing. For example, in texas, they don't have a production tax that's collected at the state because they allow property tax at the wellhead for the local communities.
And so there's, it's always this kind of differential um where the North Dakota, they collect everything at the state and so then distribute it back where some states don't. And then Alaska is always tough to compare to because people like to look at Alaska, you know, even like with here in North Dakota, we hear about the legacy fund is one of the funds that these tax dollars go into.
Um and people say, why can't we be like Alaska and pay pay the citizens a dividend check? Like Alaska does well, Alaska collects taxes but Alaska also owns the minerals and collects the royalties on those minerals. North Dakota doesn't own the minerals, they're owned by private individuals.
Jason Spiess
Alaska is like a tax rebate every year except for its oil. That's yeah, and talk to people that are that do business up there and it's frustrating, It's frustrating because in order to get a single thing done, you gotta put it through the legislative process for oil and gas and you know that time is money in oil and gas. So No, I, I understand all that, but so my question I guess is more of When you kinda as a broad brush North Dakota is very reliant on oil and gas taxes, I mean that's that,
that that is plain as day if if 50% of the tax revenue comes from those two taxes, you're not even including the amount of of halliburton trucks and amount of those those um license registrations and out of fees taxes. I mean because there there's a, let's be honest there's a lot of people that live in western North Dakota and even on the east side here where if the oil and gas industry is not percolating and not moving,
they're not living in our state and so therefore all of that tax revenue goes away too. I'm sure that your study did not get into that. But I do think it is worthy of mentioning
Brent Bogar
it is what they have mentioned because like you're exactly right Jason, it doesn't include the sales tax, all of those vehicles. I mean they talk roughly 200 to $300,000 in state sales tax for every um well that's drilled um so you know, much larger impact to the state than just the extraction and production tax. Now. Petroleum Council I believe in March um every two year they actually commission N. D. S. U. To do an economic impact study. That takes a look at those um other taxes as
well as kind of the secondary effects as you know one job in you know in the oil industry. Well that means you need people in support industries whether it's retail or restaurants or services and those types of things. So they have an economic impact study coming out that looks at that those secondary effects. Um but to say that the industry is key to the state I think is almost an understatement at this point.
Jason Spiess
Well it is, I mean I listen, I I do an oil and gas show and I've been doing it for six years now seven years and it's no secret that I am very up front when I tell people that oil and gas is vital to the economy. It's first of all, it's the only industry that's added jobs over the last 10 years. If you take every industry in the in the United States and look at the neck net gain of jobs, all this entrepreneur and technology and startups and and all these new things, They haven't produced a net
gain in jobs after 10 years. The mining industry a. K. A. Oil and gas is the only one that's done. So so when I take a look at a solid industry like that and they are reliant on on pricing though, they're they're reliant on pricing to see a state. So reliant on it and then constantly trying to figure out new ways to get more money out of it. That that really that's not to me that's the wrong direction.
Like instead of trying to get more money cause I'm talking with Meryl Peppercorn a little bit later today and he's got some new extraction tax and I don't know much about it. But he's trying to increase, he's trying basically at the end of the day is trying to get more money from the oil and gas companies and I get, I get it because I, I do a program that's energy themed that doesn't mean I'm not a logical sensible person because when you start trying to get more money out of there, um,
that's not the right way to go. You want to diversify your taxes and that sort of thing so that in times of up and down your government can stay stable and not. I mean, listen, if oil goes down to 30 bucks next week, which it can and it has before and, and we all remember the nineties, it was a decade of low oil prices. It wasn't a couple of months, it was a decade.
So this stuff historically has happened before. My, my question is, is, is the state aware of this? And are they trying to do anything to correct it? This is great. I'm gonna ask Merrill this question later on that. What? Why are you trying to put more eggs in the same basket? Okay. All right. There. There's my soapbox question. Why?
Brent Bogar
Well, and I, I agree with you, Jason. I think we've got to be practical, you know, um, as even, um, working out in Western North Dakota and the Western Dakota Energy Association and its members, they used to, they come down to the session every every year or every time I'm here to bismarck and basically say quick kill, don't kill the golden goose, You can only squeeze so much out of it before you're going to kill it.
And that's, that's where like this idea of increasing the extraction tax and where that comes from is in 2015, the legislature reduced the abstraction tax from 6.5% to 5%. And um in exchange for that, they got rid of what was called the big trigger which because oil prices had collapsed, would have actually reduced the extraction tax to 0% and it would have stayed up that rate for nearly two years before it would have come back in.
And obviously if we would have had the big trigger, that would have been a huge loss to the state. Um, Merrill and others say, well, you didn't need to reduce the rate, you could have kept that 6.5 and just got rid of the big trigger. I don't, personally, I don't agree with that because the bacon north Dakota competes with texas, new Mexico colorado Wyoming Oklahoma for these capital dollars that the industry invests, they have other options, other options that quite frankly are
more luke. You don't have cold weather, you don't have transportation restrictions, you know, capacity restrictions on pipelines and stuff and these other fields and so you have to remember, we're competing on a, not just a national, but a global market and to continue to increase taxes on a single industry. Um as you said, a you're putting all your eggs in one basket, you're continuing to lean on that basket instead of looking at ways to diversify.
And when you see these numbers that we're talking the amount of money that comes into this state, just from this industry, it's that's a huge reliance on a single industry to support state programs, state funding for everything from education to water projects to roads. I mean, it's not like it's just in one area that the state uses the oil revenue.
I mean, it supports the general fund, it's been used to build schools that's been used to build um Facilities on our university campuses. It's been used to fund K- 12 education, um highways, water projects, flood control, I don't think you can find a thing that has not received the benefit of the oil industry.
Jason Spiess
So I'm looking at this, this white paper, you guys put together this executive summary and the headline is state oil tax distribution by type fiscal years 2008-2018. And you've got a list of all the counties across North Dakota. And then the next thing is property tax. I want to say, yep, talk to me about that a little bit in terms of the oil tax distribution. Now, when I look at, say, CASS county and it says 93 million and some change is that how much the oil tax has given CASS county And
then 322 million and, and well 323 million actually in water. So, um, The oil taxes that have been extracted from Western North Dakota have been repurposed by the state and redistributed to say CASS County in the tune of $93 million is that accurate?
Brent Bogar
That's correct. Oh wow,
Jason Spiess
wow. That I can see where this is going to cause some problems. You
Brent Bogar
know, you take the line across on CASS county. Um, it's close
Jason Spiess
to a billion dollars. It's close to it. I mean, it's 820 million. $821 million. I'm sorry. We're gonna round up 73 million and so we're gonna, we're gonna call it 8, 821 million. Now, let's, let's juxtapose that by the way with is it Williams County that Dickinson's in ...
Brent Bogar
is
Jason Spiess
Now good for them. The Williston got some money. They got, you know, they got 943 million. So that is a good sign though. That is a good sign because that's, you know, that was the hotbed and and what? A lot of people don't know that are listening to this, whether you're in Wyoming or whether you're in south Dakota or Montana or even if you're in north Dakota, a lot of these roads in western North Dakota are actually getting, getting updated for the first time in a century.
I mean a lot of time, well maybe not a century, but they were built to basically have a couple combines a year ago down them and that was it. I mean, these roads were so under built, a rainstorm would literally move part of the road off of the road, part of the asphalt off the road.
So that's a good sign, at least, you know, that there's some investment going in there, because I'm looking at, you know, a lot of it looks like transportation and some road stuff, so that's a good sign that, you know, we're not gonna totally pick on this thing.
Brent Bogar
No, no, it is a good thing. And that was even with Western Dakota Energy Jeff Symonds, their executive Director, and he looks at this and this is, you know, this, this shows that there has been investment made out west to support the industry. Um, as I said, everyone's gonna argue that they need more those types of things and you know, I'm not gonna parse into that one, but the reality is, is we've made the state has made significant investments in the communities out west to support
the industry, but it's made these investments across the state for some of these projects. Um, and so I think it's the state as a whole has very much benefitted, but we have to recognize the benefits coming from a single industry. And I guess from my standpoint, that's that's what I see in this study is how much the state has become dependent on a single industry. And we have to make sure that we, you know, I'll say it this way, we need to make sure we take care of the industry with
appropriate regulations is the tax burden, the right tax burden, raising the taxes on an industry that has been supporting you this much, might not be the smartest thing at this point in time when we're still in a very weak egg economy. Um and some of the other economic indicators of the state are not exactly the strongest. And so do you really want to pick on the one that's actually um growing and supporting you well,
Jason Spiess
and it's it's really one of the few that's still pretty diverse in terms of economic ripple. You start looking at the um you start looking at the U. S. Industry and some of the technology that's pretty centralized. There's not the robust um economic ripple that the oil and gas industry brings in. And um I don't know if I phrased that correctly, but I think I kind of made a little bit of a point there that there's a little bit more opportunity, you
Brent Bogar
know, with the oil and gas industry, you think about it um you know, obviously you have the direct impacts the drilling in the production happening in western north Dakota. But the amount of engineering, the amount of manufacturing that's occurring and even in the Red River Valley, Grand Forks, Fargo, the number of jobs that are supported that those spinoff jobs, I think of.
I can think of a couple of firms specifically in Grand Forks, um, that have done tons of construction, in building in western North Dakota for these communities, whether it's building schools, whether it's building warehouses or other buildings and so there there is a much more broader ripple effect with an industry like the oil and gas.
Jason Spiess
Without a doubt. I mean, I used to tell people all the time back in 2012 and 13, you don't think Fargo is benefiting from the oil and gas go drive by Fargo tank, you can't find a tank in their parking lot, man. I mean they were selling them left and right and, and you know this because you were there during the early days like I was Minneapolis was the big winner in the beginning.
I mean, they had all the finance set up and they had the, you know, the train and Mississippi and all that distribution. And they were, they were an early, uh, advantage, I guess, uh, in the oil and gas world and it's leveled out considerably since then. Um, what are you hearing from the oil and gas companies? I know your job is not to, you know, relay messages for the oil and gas companies, but this is some pretty concerning information.
And I'll be honest, if this is to me, this is beyond political. This is this is something where a discussion needs to be had by everybody because if 50% of your state's income is reliant on one industry and then if you really take a microscope into it, I would argue it's closer to 60% when you start talking about some of those, those things that we were talk about, the sales tax that the uh nomadic energy people bring in and North Dakota's been trying very hard to solidify these nomadic
people and just to reiterate what you were talking about the global marketplace. That's the real deal people, you want to go back 34 years ago, oil companies like Liberty Oil, we're doing remote fracking. So they had employees down in san Antonio, but they were fracking up in North Dakota. So they would have a little shell team up here in North Dakota.
But the majority of the people were down living in the headquarter area because, well, you know, technology has allowed that. So why do you think North Dakota's been investing so much in the quality of life? Because that's, that's the direction it's going to where if you've got a good quality of life for your family, you'll put up with some snow, you'll put up with, you know, I mean, it's not been done.
It's, it's, it's not reinventing the wheel here, but what we're trying to reinvent is a quality of life for people. So sorry, another kind of a summary there. But um just to kind of give people some context a little bit, what what are people saying in the energy industry, are you hearing that this discussion is being had? Or is it still just this finger pointing over who's getting what? More than who?
Brent Bogar
No, I think you're starting to see more of the conversation turning from the industry, of them being more so of a we're here for the long haul and we're supporting the state and the study shows that we're supporting everywhere across the state, everyone across the state and we want to continue to do that, but we need to we need to be able to do it in a competitive environment.
And so instead of it being a finger pointing of east west type of thing and um the industry just kind of hunkering down I think um I see um more of the conversation being, we're here to support the state, but we can't be the only ones that support the state and don't don't just uh point and pick on us, I guess you could say.
Jason Spiess
And okay, go ahead. Sorry.
Brent Bogar
No, I was just gonna say because as I shared earlier, I mean when you look at um price and production here in North Dakota prices, it's a very price dependent industry and when uh the last numbers I heard, you know, we're at somewhere between seven and $9 discount of a W. T. I for North Dakota crude. Well, if I can go down if I'm a company and if I can invest already have lower expenses because I don't have to be dealing with the cold weather and stuff right now and I can be down in texas and
I'm only getting a 2 to $3 discount. Well, it doesn't take a rocket scientist to figure out where it makes better sense to make those investments and every time that you increase attacks, that's an increase in expense on an industry. And so that all starts to play into it. And so they're, they're very cognizant of um, the, the impact they have on the state budget.
But they're also, they're companies that they have investors, they have shareholders, they have people that they have to answer to. They can't just um, be charitable and say, oh, we'll stay in North Dakota and keep paying the higher taxes just to support the state. They've got to make business decisions.
Jason Spiess
That's, that's the part I don't think people understand is this is not a game of chicken. This is a game of numbers. I mean, it's just right. I mean, can it be said any easier, I guess because you said the word, picking on earlier and we've actually done a few stories on that primarily with the coal industry, how they flat out just get picked on.
Um, yeah. And you know, and I've, I've thought that with oil and gas over the last five years more increasingly, um, we kind of position it as it's the religion of environmentalism to where it seems like this environmentalism cause has gotten to the point of, you know, people follow with a blind faith, they just, they don't look at anything else and to where it's almost got a religious type status to it.
And um, with that comes to picking on just fossil fuels in general. And one thing we try to do on this program is have a lot of innovation on to explain how the industry is actually being pretty proactive with trying to be cleaner than they already are and that sort of thing. So, um, because yeah, anyway, it's, we try to be logical about it because I mean trying to remove the world from fossil fuels is a ridiculous statement.
It's absolutely ridiculous. And any media that actually believes that is a real thing that can happen, should not be have any credibility or credentials at all. Um, and that's just that, that's not a biased statement, that's just a fact of life. Um, I want to ask
Brent Bogar
you go ahead. It was just gonna say, you know, and if you talk to your own gas industry and even the coal industry, they're not, they're not trying to say that we shouldn't invest in renewables and use renewable energy. They're just saying we've got to be realistic. It's an above all policy. It's an above all position because we're still deriving, you know, we can talk numbers and numbers can get skewed, but the reality is 80 plus percent of our energy is still from fossil fuels.
You can't flip that switch tomorrow and say we're going to use all renewables and so what they want. And I think what a logical person would say is let's invest in all of them. But let's be realistic about where it's actually coming from and what those benefits are. And let's continue to see the, the continued, um, innovation in these industries. I think of the oil and gas industry compared to 20 years ago, you look at what they're doing with multi pod well sites so that the, the
impact that they're putting on the land is, you know, it's 1/10 of what it was before with the, you know, and that's a simple innovation thing. But I mean, they are making significant investments to lessen their impact to be responsible development of the energy. Um,
Jason Spiess
yeah, I, I actually, the whole reason I remember originally when I got into this, I thought it was gonna be some investigative reporter and you know, would be like shooting fish in a barrel against the energy industry and after about five minutes I realized they needed help. They didn't need, you know, they really don't, but they do because they are unfairly and unjustly picked on.
They are and I know they don't need, need your help for my help because they're big enough and they take care of themselves. But it's just to me, it was one of those things that I felt like I was actually doing good, like exposing some of the myths that were out there because listen, they're, they're out there like crazy. In fact, that's one of the reasons having peppercorn on because I told Meryl, I said Meryl, I'm not going to agree with anything you say.
Probably. But this conversation of this extraction tax keeps coming up in the state of North Dakota and I want to find out why. And now I know why because it's the low hanging, it's the low hanging fruit. If you're a politician and you need to raise money for the state, well, the low hanging fruit is oil and gas and they're so big that, you know, we can pick on them and if they fight back. Well now they're picking on us.
I mean, there's a reason oil and gas is a hard time, uh, in the public relations world. I mean, they're, they're, they're probably the worst out of all the industries when it comes to pr because they don't, they can't, they can't, and if they try to stick up for themselves, they become the aggressor, you know what I mean? Because they got all the money.
Brent Bogar
Yeah. Or they, or they look like they're just trying to buy people off and that's why you don't hear the stories of when and I'm sure it was the same when you were in Dickinson, Jason when I was in Williston. The amount of community support that the oil and gas industry provides, whether it's donating money to pay, build a playground at the schools or you know, I remember one company actually bought a brand new pickup for the hospital because they needed one for a pickup for their
grounds crew. You know, just those little things that the industry does and they don't take out press releases for it because if they do, they get lambasted of trying to buy people off and it's like, that's not what they're doing. They're supporting the communities that their, their employees live and work in
Jason Spiess
well. And that's a, that's a great point. In fact, that is a study I would like to see done so Petroleum Council. If you're listening, uh Jeff Simon over at the Western Dakota Energy. If you're listening, this would be an outstanding study. Doug Burgum, You know what Doug Burgum Governor of North Dakota. If you're listening, this is why this study is so important.
We've been doing this on our program for a number of years. We call it community and culture. And what we do is we talk to those individuals from the Ronald Mcdonald House and from, you know, head Start and the places that get the donations because you're right very few times to the oil and gas companies come on publicly and talk about, you know donated a million dollars to Watford City so they can now have an emergency room.
Um you see what I mean to where they don't you're right, they don't they don't like to brag about it. But you know what the Ronald Mcdonald House, they don't have any problem talking about 25 grand from X. T. O. They love it. So we try to backdoor it and let people know about it that way. And the reason we do that is because we want people to know that Not only does oil and gas pay the lion's share of the taxes which go to your schools and your roads and your health care and a lot of these other a
lot of these other necessities that are known as the pillars of life, they also go above and beyond and donate $1 million dollars to Watford City so that they can have an emergency room because that local community doesn't get enough tax dollars to have a hospital or so that Stanley can now have an updated uh school with bathrooms that are not outhouses or something like you know what I mean to wear that that's a that is an important part of
this oil and gas story that needs to be told the amount of donations that have been given to really services that the government should be providing. Does that make sense?
Brent Bogar
It does. You know, and community outreach they do. I think it would be mind blowing to even people in those communities who who see it first hand to an extent. But you never, you don't see everything, you know, you don't see, you might see the because you you work at the hospital or family or friend works at the hospital and you hear about it there, but then you don't hear about what they did for head start.
You don't hear what they did to for the community library. You don't hear what they did for um, the Salvation Army or for the homeless shelter. I mean, you don't hear all of those things and, and even if you do, it's, you don't add it all up and you start to add up those donations, you start to add up those in kind um contributions that these companies make where they take their entire um office staff out of
the office for a day to pick up ditches along the highway or to go clean up a city park or to go paint classrooms in a school. You know, those types of things. It's significant.
Jason Spiess
Has there ever been a study like that done? Has there ever been a community impact and economic community impact study like that done? Because you start when you started mentioning pick up the patch and some of those other things, you're right. I mean this goes beyond the buildings, this is this is, you know, human labor too.
Brent Bogar
Yeah, not that I know of, not that I know of, and I think, and that's the part where for me, we have to remember that this, it's the oil industry, but any industry, whether it's oil, education, U. A. S. Banking, what drives that is people, there are people that make that up, and so it's the people within the industry, and we have to remember there are people behind that industry that make it happen.
And so it's very easy to pick on an industry as a um entity. But you have to remember, there are people behind that, that you then are, that's who you're actually targeting is those people that are making that difference that are actually part of that industry.
Jason Spiess
Yeah, it's yeah, they get treated like a monolithic monster, is what I used to call them. Um but it's amazing, you know, like, I remember the first time I went to Pittsburgh, how clean that was, I was expecting this dirty town, and I was just beautiful city, and it was like that a lot of other oil and gas communities and energy communities that I would go to to where my upbringing, you know, Harry the dirty Dog, that book, you know, about how he goes in the goes exploring the world and
goes to the coal plant gets all dirty, you know, that sort of thing, and that that wasn't the case. You know, it's, it's this, it's this totally, you know, and I think about what's going on at the Davis refinery, how, you know, they've been scrutinized for almost two years on things and every time when it comes down to it, the judge in the state and the regulators always rule in favor of the Davis refinery because they continue to provide the data and the facts and, you know, not just
chicken little speculation and that sort of thing. So anyway, um, let's get back, I want to get back to this study quick and um, what's the goal of this study? Uh, this seems like it, it should help solve a lot of questions and satisfy a lot of questions and, and, and probably debunk a lot of myths when it comes to distribution of funds in that sort of thing. But uh, you know what, what's the real intent behind this is it really kinda get rid of some of those political bickering.
Brent Bogar
I think that that's a great way to put it, Jason is that it's to debunk some of the myths that are out there in regards to where the money is gone and that we, you know, I've actually heard and I'm up at the capitol quite a bit. I've heard some legislators and um, other people say, you know, the west has gotten it all, they should be there greedy because they need, they want more money for their high ways or whatever.
And it's like, well, I think you've got everyone has gotten some money. I've actually heard some, it's say it's our turn now, the West has gotten their money. They don't need anymore. We should get it out East. Those are some of the statements that are out there at times. And so I think this is about education and debunking. It's not about trying to say prove a point of the West needs more money or the industry, we should pay less.
I mean, obviously, you know, if they choose to use the information that way they can, but that in when I was commissioned to work on this, that was not their intent, their intent was for an educational piece to put something out there so that people could actually see the numbers, see the impact across the state. So that you could just um, tone down some of that rhetoric.
Jason Spiess
So when it comes to next steps on this, um, this just came out yesterday, and I don't know if you've had a chance to brief the governor. Are you going to brief the Governor or will be in front of the Industrial Commission? Talk to me about some of the leaders at the state and how they are gonna get access to this information just by press release or is it going to be a formal briefing, I guess?
Brent Bogar
Well, we're gonna see um we actually, the Petroleum Council Western kota energy actually handed this out yesterday um to the legislators, every legislator on their desk got a copy of the, of the report so that they could see it themselves. Um, there's been um, you know, I'll say an open invite that anyone that wants, you know, any group, whether it's um a a caucus group, a sub committee from the legislature, if anyone wants a presentation and more information on this, this study
at this point, um were available to do that. And we're just gonna um can I see where where the questions are and be be available to answer the questions and share this information?
Jason Spiess
Okay. Um yeah, because like I said, I think this is to the point to where, You know, I'm not saying emergency session, but there should probably at least be a public contingency plan if oil drops a certain point. I mean, I'm just saying man that 50% of the state's budget is reliant on this. And like I said, if you look at a microscope, it's probably more like 60%. So this to me is not a political issue. This is more of a hey guys, this is a real problem that could happen much more than some of
the other issues that you guys are deciding whether, you know, what was I reading the other day increased their per diem. Uh so they can have some more lunches or something like that. And you know what I mean? It's every year, all these frivolous ones come up and I'm looking at this going this, this, something like this seems like it should have been on the front page of the paper, you know, So yeah,
Brent Bogar
this is big news and yeah, I mean, it's 50% of the revenues now. It's not necessarily 50% of what we run on because we got, you know, of those tax dollars, 30% of those oil and gas tax dollars are going into the legacy fund. That's a whole new can of worms in regards to what do we do with with that legacy fund? And you know, I say, you know, we've got 100 and 41 legislators.
So that means that there's probably at least 282 ideas of how to use the um Legacy fund um, up at the capitol right now. So we'll have to see how that all plays out. But that, that fund is all oil and gas tax dollars. And so I think we have to be cognizant of how those dollars are used. That. Um
Jason Spiess
now that that Legacy fund does have some restrictions, right?
Brent Bogar
It does. I mean, it doesn't, it doesn't, I guess I
Jason Spiess
would say it depends on how creative you are with the language. Huh?
Brent Bogar
Well, in the principal can't be touched unless the legislature votes with a supermajority and they even have that they can only spend 15% of the principal um
Jason Spiess
that's right. It is a super majority to so that, that is a, that is an important part of that. Yeah,
Brent Bogar
yep. But the earnings, the earnings off the legacy fund are just transferred right into the general fund. And in the past they have um when I first started getting earnings, when it was first put in, they actually just transferred those earnings right back into the legacy fund. They didn't use those in the general fund. Well, the last two sessions, they've used the earnings of the legacy fund for, for general government, for general fund balancing and those types of things.
And so now you're creating another situation where there's somewhat, there's, you're creating the situation potentially of becoming dependent on those earnings to fund general operations of government. And I'm not sure that, that if you went back to 2010 when the legacy fund was put in front of the voters, I'm not sure that that was the intent of those that um put the legacy fund together was for it to be used to fund general operations.
Jason Spiess
Yeah. Boy, I tell you give them an inch they take a mile. That's for sure. That's well, it is. There's a lot to this that people don't get. And the more the more layers that really get pulled apart here is it's showing that north Dakota is a lot more of an oil and gas energy state than it is agriculture. That's kind of, that's, that's kind of the way the winds been blowing and it's not an egg versus oil thing.
It just shows that, that's kind of the direction of the economy right now and the way that the businesses are going and I, I don't know if that's true or not. I know North Dakota's egg is still doing robust I think were between 13 and 17 of the number one, uh, commodities in the nation, like number one and honey, number one and dry peas. And, you know, in addition to some, you know, other ones.
So egg is doing just fine. Don't get me wrong. But the amount of attachments to the oil and gas industry through the government is much more than egg is what I'm getting at. So, um, anyway, yeah. Well what's next for you, What are you gonna do on this? Are you gonna, if, if you need me to do a presentation on the east side of the state?
I certainly can because to me this sounds like, you know, you get in your car and you go from city to city and and explain to the people who want to show up and, and learn about it, type of a thing. Are you going to do anything like that or is just kind of, you know, what, wait and see
Brent Bogar
that, that honestly, that is one of the goals is to utilize this and do a little bit of, uh, a road show and get out and show people, you know what the impacts are and come into communities and you know, not, not that it's not about um, picking on them, but it's just helping them understand, you know, like even going through. So the report, it totals everything up.
But highlighting the number of projects, One of the big projects that in doing this and uh, sticking out, you know, Grand Forks, there's 100 and $26 million facility, the medical school building put on um campus that was built that was paid for by oil dollars. And for the city of Grand Forks are for U. N. D. You know, so highlighting to these communities, some of those types of benefits that they have seen in their communities and the impacts across the state.
You know, not just highlighting that and saying, see, you got this, you shouldn't get anything more. It's more of a C you have benefited and you're going to continue to benefit.
Jason Spiess
Oh, I think it's great. Yeah. Anything we can do to help you out, let us know. I mean, that's that, I, I think that is one of the most important messages for North Dakota to understand is how diverse the oil and gas industry has been to the state. I I just, it's my, and, and you know this because you're out there. If you see it, you figure it out pretty quick.
But if you're, you know what a lot of people don't understand about North Dakota is a very different state. Um 60% of the voting population is, is on the east side of the state. Uh, and I'm talking like 45 miles from the border used to be Jamestown, but now I think it's between Jamestown and Valley City is you draw a line and you get 60% of the population on the east side of the state.
So the masses have absolutely no idea what the oil and gas industry is. They're so far removed from it and the older generations weren't around during the nineties and eighties, during the eighties boom type of a thing. So they don't understand much about it. And there was some spite. So I, I get that. And so I think this is a great study. I think it's something that needs to be uh, explain to the state because the state is a new oil state, the whole state is new.
They don't understand how oil works. You go down to texas, every part of that state gets how oil works, man, they all get it, so does Oklahoma, You know what I mean? They don't, they, and, and and then you go to North Dakota and like I said, there were still, you know, trying to figure out how to get our sea legs on, I guess, you know, that type of thing because it'll iron out it will.
Brent Bogar
Yeah, it will. And one of the unique things compared to like some of the other states, like texas and Oklahoma specifically they have their oil industry is not as concentrated as North Dakota's is, you know, you can draw a line just like the population, the oil industry is really basically the same thing. You know, you're, you're looking um, 70 80 miles off of the Montana border is the bulk of the industry and there's a little bit beyond that, you know, getting over to Minot and up
into and stuff. But you know, there's no, there's no oil in bismarck, there's no oil and gas in Fargo or Grand Forks or Jamestown. And so other states, it's, it's more a part of their entire state in regards to that development, people being impacted and being that. And so that's, that's one of the things and, and you're right too, we're getting our sea legs under us. So I mean, we went from being what, the 10th largest oil producing state to the second largest oil producing state in
about 44 or five years. That's some significant rapid growth. You know, that's like I was, I compare it to like a high school kid that one summer, he grows 6" and he goes out and tries to play basketball. He's so uncoordinated that for those first couple of weeks of basketball practice because he just grew so much over the summer and that's kind of where we're
Jason Spiess
at, I wish I would have done by other example because the one I wanted to say was 1/9 grade basketball player. But I didn't think you'd understand that because you want it. You look at the ninth grade basketball players, half of them, their feet are too big for their bodies. And so they're going through that growth spurt. It's, it's comical to watch, you know, because, you know, some of them are like really good, but they're done growing.
So they're just, I wish I would have my c instincts, ninth grade basketball players, um, which is like, you know, getting your sea legs, you're just trying to understand yourself and that's what North Dakota is doing right now trying to understand itself and this study is a really good study to help people understand that. Um, these people out west that have been standing up on their soap boxes and not demanding stuff, just looking for some equity and some fair and balanced
treatment to it. And I think that is at least gonna catch some of the people's eyes. Don't you agree that at least at the end you'll probably get a little bit more fairness now from the state
Brent Bogar
I do. And I think Western Dakota sees that the Western Dakota Energy Association sees that, um, with this information coming out. Um, people are recognizing that, hey, um, we've got to continue to make those investments. We've got to allow these communities to make the right investments in their community for, for their infrastructure, but also to support the quality of life so that we can support this workforce that's here because we are
competing on a global stage for workforce and for capital investment. And so we need to, we need to put our best foot forward as a state and as local communities um for the industry.
Jason Spiess
Well, I just noticed the time we've went beyond our 10 minute interview here a little bit, so I should probably get right. I got a chili cook off, I got an interview next. So you go from taxes, the chili cook off. That's uh hey man, keep the variety and spice of life going, I guess.
Brent Bogar
Absolutely, man. So I appreciate the time Jason and we will be in touch. I'll definitely reach out to you with whether it's Jeff or Ron or whatever, but I do think that we want to probably do a little bit of a dog and pony show and would definitely, ... and
Jason Spiess
I'd appreciate it. Yeah, no problem. And you know, I'm seeing the bacon barbecue again this year. So some people think I can be bigger than life at times. So that's that's a good sign. Um uh real quickly, how can people access this information? You guys have it at a website or something?
Brent Bogar
We do. It's actually um at tax study dot nd energy dot org. Nd energy dot org is the Western Dakota Energy Association's website. We just, we made it a nice easy link, um, tax study dot nd energy dot org for people to go out there and find this information
Jason Spiess
outstanding. Thank you, sir, appreciate it,
Brent Bogar
you bet.
Support American Entrepreneurs! Click on the image and use the promo code OTIS!
Submit your Article Ideas to The Crude Life! Email studio@thecrudelife.com
About The Crude Life
Award winning interviewer and broadcast journalist Jason Spiess and Content Correspondents engage with the industry’s best thinkers, writers, politicians, business leaders, scientists, entertainers, community leaders, cafe owners and other newsmakers in one-on-one interviews and round table discussions.
The Crude Life has been broadcasting on radio stations since 2012 and posts all updates and interviews on The Crude Life Social Media Network.
Everyday your story is being told by someone. Who is telling your story? Who are you telling your story to?
#thecrudelife promotes a culture of inclusion and respect through interviews, content creation, live events and partnerships that educate, enrich, and empower people to create a positive social environment for all, regardless of age, race, religion, sexual orientation, or physical or intellectual ability.
Sponsors, Music and Other Show Notes
Studio Sponsor: The Industrial Forest
The Industrial Forest is a network of environmentally minded and socially conscious businesses that are using industrial innovations to build a network of sustainable forests across the United States.
Studio Email and Inbox Sponsor: The Carbon Patch Kids
The Carbon Patch Kids are a Content Story Series targeted for Children of All Ages! In the world of the Carbon Patch Kids , all life matters and has a purpose. Even the bugs, slugs, weeds and voles.
The Carbon Patch Kids love adventures and playing together. This interaction often finds them encountering emotional experiences that can leave them confused, scared or even too excited to think clearly!
Often times, with the help of their companions, the Carbon Patch Kids can reach a solution to their struggle. Sometimes the Carbon Patch Kids have to reach down deep inside and believe in their own special gift in order to grow.
The caretakers of Carbon Patch Kids do their best to plant seeds in each of the Carbon Patch Kids so they can approach life’s problems with a non-aggressive, peaceful and neighborly solution.
Carbon Patch Kids live, work and play in The Industrial Forest.
Click here for The CarbonPatchKids’ website
Featured Music: Alma Cook
Click here for Alma Cook’s music website
Click here for Alma Cook’s day job – Cook Compliance Solutions
For guest, band or show topic requests, email studio@thecrudelife.com
Spread the word. Support the industry. Share the energy.
The Crude Life Podcast: Brent Bogar on Oil & Gas Tax Collections