Take Action: Tell North Dakota’s Leaders To Fix The Oil Tax

I posted yesterday about Alaska looking to North Dakota for leadership on the oil tax issue. In Alaska they raised their oil tax and are now seeing a drop off in production. While here in North Dakota we’re seeing production that’s rocketing upward, lowering and simplifying the extraction tax now would ensure that we see continued growth in the future.

There are a lot of things that could change in the market. The federal government could enact new regulations. The bottom could fall out of the oil market and prices plunge. Some new oil play in a state with a friendlier tax environment could open up. If we want the oil producers here for the long term, rather than just for a boom-and-bust, then we need to take action now to facilitate their staying.

But unfortunately, our state’s leaders have set aside this debate for now buying into short-sighted excuses about needing to get all the tax revenues from oil now that we can. Or that our state won’t have enough revenue if we cut the oil tax. Or that the oil producers don’t need tax relief because oil production in the state right now is just fine. These are all superficial arguments based on big government greed and knee-jerk dislike of the oil industry in general.

We need to tell them that the oil extraction tax needs to be fixed. With its trigger rates based on oil prices it’s far too complicated. Give North Dakota oil producers a flat, reliable tax rate and we can ensure a much longer oil play in the state.

The form below will send an email to every legislator in Bismarck. Use it to tell them to reconsider legislation to fix the oil extraction tax.

[customcontact form=18]

Rob Port is the editor of SayAnythingBlog.com. In 2011 he was a finalist for the Watch Dog of the Year from the Sam Adams Alliance and winner of the Americans For Prosperity Award for Online Excellence. In 2013 the Washington Post named SAB one of the nation's top state-based political blogs, and named Rob one of the state's best political reporters. He writes a weekly column for several North Dakota newspapers, and also serves as a policy fellow for the North Dakota Policy Council.

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  • borborygmi

    From the Mar 2011 Prairie Business Journal, Avg oil well 37 years in production, 838,000 barrels of oil,
    57 million in gross profit. less 6.1 to complete a well, 5.775 million in taxes, royaltes, 9.5 million, 1.55 million in salary, 1.7 million in operating expenses. Subtract all that out 32.425 million net over life of One well. They do not give avg price of oil they are working this out at. Numbers to contemplate. “operators are planning to bring in another 70 rigs in 2011, up from 165 rigs…. there are also projections of 2000 wells per year with a total of 21,000 + wells. …… For what it is worth.

    • http://sayanythingblog.com Rob

      Well, nobody is arguing that we aren’t drilling a lot of oil right now when everything in the market is favoring the bakken oil play.

      The point is to keep the play pumping when market conditions aren’t as favorable.

      • borborygmi

        From what I can see I don’t see the market conditions becoming unfavorable. With the turmoil in the world, and with the US dollar sucking in value commodities should stay high. The dollar turning around is probably the biggest threat to commodities.

  • fredlave

    With oil prices hovering around $100 per barrel the oil companies are profiting hugely and there is no end in sight to high oil prices. I don’t think that a lowering of ND’s extraction taxes is justified at this time. However the legislature decides to spend these windfall taxes, I hope they will take the high fuel prices into account and return some of the overage to the taxpayers.

    • robert108

      Your understanding of econ is deficient. Taxes are supposed to pay for govt costs, which has nothing to do with the amount of profit being made by a business. Big profits mean that the company is doing something that the people value highly. That’s no excuse for govt greed.

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