North Dakota saw a 28.7 percent increase in taxable sales in 2012. It’s the most common way to measure the performance of the state’s economy, and that kind of increase, compared to the rest of the nation, is exemplary.

The fourth quarter of 2012 was up 9.7 percent when compared to the same period in the prior year. In other words, the state’s surging, boom economy has started to slow.

Growth of 9.7 percent in a quarter isn’t anything to complain about; it’s better than respectable. It’s just down from recent history — up 52 percent in the first quarter of 2012, 41 percent in the second quarter and 22 percent in the third quarter.

The change in taxable sales, and in the overall state economy, reflects changes in North Dakota’s Oil Patch. The run on private leases, which have a three-year life span, had oil companies putting down wells as fast as they could drill. It created a pace for oil exploration that was extreme. The western North Dakota oil fields now are beginning to transition to production and maintenance.

The next phase of oil exploration will come primarily on the 10-year federal leases. Expect the drilling on federal land to be more methodical and systematic. Companies will be more strategic in drilling and laying down infrastructure. There will be less catch up. It’s good news for the people that live and work in the Oil Patch.

Although the challenges that accompanied the oil boom have not gone away, as things slow up the quality of life out west will improve.

The longer federal leases, and the production and maintenance operations on private leases, will take some of the craziness out of the state’s Oil Patch. It will take some of the edge off the boom. It will be good for the state.

The oil industry will be in North Dakota for the long haul. Getting up to speed has been terribly stressful and change continues to run full-speed-ahead in the oil producing counties. Heavy traffic remains a problem on state roads and highways. We’re still playing catch up with improving infrastructure, whether for transportation, waste handling, education, health care, child care or housing. Slowly this is all changing for the better.

Tax Commissioner Cory Fong put it this way, “As we enter 2013, North Dakota is still well positioned for more growth, but we anticipate it will be at a generally slower, yet more sustainable pace than the last few years. This will likely become our new normal.”



06/16/2015 2:14am

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