2014 NDACo. Annual Convention Bismarck, ND Dan Brosz, Past President ND Association of Oil and Gas Producing Counties October 14, 2014

2010 The Upper Great Plains Transportation Institute was commissioned by the ND Association of Oil and Gas Producing Counties to study impacts and investments needed to support oil and gas production and distribution on North Dakota. Report identified additional needs in the oil and gas producing counties of 233 million dollars for the 2011 biennium and 294 million for the 2013 biennium. The 2011 North Dakota Legislature appropriated 142 million dollars to oil producing counties. With the assistance of the NDDOT the Counties split into a North Region and a South Region to determine eligible projects. The study was used as a guide in determining the funding allocations.

2011 Legislature commissioned The Upper Great Plains Transportation Institute do an assessment of county and local road infrastructure needs in North Dakota. This study was a comprehensive analysis of all needs of all county and township roads throughout the state, irrespective of which industries are served by these roads. The estimated needs reflected oil-related, agricultural, and other baseline traffic. The study identified needs in the oil producing counties of 521 million dollars for the 2013 biennium and 389 million for the 2015 biennium. The no-oil producing counties needs were 311 million dollars and 382 million respectfully. The 2013 legislature appropriated 160 million dollars for the 9 largest oil producing counties and 120 million for the remaining counties. They also appropriated 100 million to non-oil producing counties and cities early in the session. The 9 largest oil producing counties used basically the same procedures and divided the monies based on the UGPTI study. The other counties divided the money based on CMC miles.

2013 Legislature commissioned The Upper Great Plains Transportation Institute do update the 2011 study. This study included measured condition information, updated traffic counts and used an enhanced GIS modeler to forecast traffic movements. Using this data, UGPTI prepared an assessment of the needs throughout the state. This is probably the most comprehensive study in the US today of county and township roads. The study identified needs in the oil producing counties of 544 million dollars for the 2015 biennium and 419 million for the 2017 biennium. The no-oil producing counties needs were 440 million dollars and 452 million respectfully. They also identified 328 million dollars of needs for bridges over the next 20 years. The 2015 legislature will appropriate ??? million dollars over and above normal state and federal funds for counties and townships to use to improve our road infrastructure.

Oil Producing County Obstacles Meeting the 105,500 criteria is very costly.  Most designs require 15 to 18 inches of aggregate base and 5 to 6 inches of asphalt.  Requires re-grading roads with 40 foot plus sub-grades.  Normally requires additional Right of Way. Costs are running 1.5 to 2.5 million dollars per mile.

Action Needed Passing the “Surge Funding” so not to miss the 2015 construction season. Finding a method to fund these needs on a annual basis to help with planning. Oil producing counties need your support in changing the production tax formula to send back more dollars to meet impacts. Oil taxes was the source of most of the money that was used to fund the road infrastructure in the 2013 biennium and will probably be the source in the future. Oil companies produce oil where the return on money is the greatest. Talk to your Senator and Representatives about this and continue to monitor until the last day to make sure they understand the importance of proper funding of our states basic infrastructure needs.

Conclusion Constructing safe and functional roads for oil and gas development is expensive. Maintaining those roads is also very costly. Convincing policy makers to invest the necessary funds is challenging.