Western N.D. infrastructure update

Since I was in another legislative meeting for a big chunk of today, I was unable to go to the interim Energy Development and Transmission Committee meeting. Here’s a news release from the state Commerce Department with Shane Goettle’s testimony to lawmakers.

BISMARCK, N.D. — Commerce Commissioner Shane Goettle today provided legislators on the interim Energy Development and Transmission Committee with a progress report on the state’s current efforts to address western North Dakota infrastructure needs.

“The growth in oil producing counties is having a positive effect on local economies but it is also posing challenges,” Goettle said. “The good news is that city and county officials are working together, and with the state, to make progress on immediate issues, while developing thoughtful plans for permanent, long-term investments that will enhance the infrastructure of this region for years to come.”

Direct Funding

More than $210 million in direct funding will go to oil and gas producing cities, counties and schools in the current biennium. That includes $165 million in oil county revenues and $50 million from royalties on federal lands in the public domain.

Transportation

The state implemented a record budget of $1.35 billion statewide for transportation in 2009-2011, a 50 percent increase from the last biennium. This includes $500 million for state and local roadways. In the 2010-2011 construction seasons, $237 million is dedicated to the western part of the state including the Dickinson, Williston and Minot areas. Goettle said for continued transportation improvements North Dakota needs a dependable, multi-year federal transportation bill.

Major western North Dakota highway projects integrated in the state transportation improvement plan include:

 *   US 85 – $75 million to Super 2 US 85 with passing lanes, intersection improvements & turning lanes, transitional to four-laning from Williston to I-94.
 *   ND 12 – $34 million to provide major rehabilitation of the road.
 *   ND 8 – $21 million to re-grade and add a traffic signal at the intersection of US 2 and ND 8 at Stanley.
 *   ND 23 – $16.5 million for major upgrades, intersection improvements, passing and turning lanes moving toward a Super 2 status, and designed to allow four-laning.
 *   ND 22 – $14 million for pavement upgrades.

Public Safety

Additional safety measures have been implemented to improve road safety, including rumble strips, turning lanes, education efforts and enforcement campaigns. According to the North Dakota Highway Patrol these steps are proving effective and fatalities are down in oil and gas producing counties. Fatalities for the 17 oil and gas producing counties are 56 percent lower than last year at this time, 21 fatalities compared to 46 at the same time last year.

Housing

More than 1,000 new units are in the works in Williston alone, including about 848 new units permitted or under construction in 2010-11. This includes 122 homes, 169 apartment units, 136 manufactured homes, 30 extended stay-hotel rooms, 233 standard hotel rooms, 158 crew quarters. It also includes a new mobile home park with accommodations for more than 300 lots already committed. In addition, a contractor in Dickinson is planning 170 single family and duplex homes, up to 320 apartment units, and 13 acres of commercial land to serve the community’s long-range needs. Other developers are in the early stages of developing approximately 250 more homes in the Dickinson area. State and local officials are also working successfully to attract additional investors. Several are breaking ground on new housing projects including:

 *   Granite Peak Development, LLC, in partnership with the City of Williston and Bank of North Dakota has 159 single-family and twin homes targeted for completion by Christmas; two apartment complexes with more than 100 units; and 850 new residential lots are being planned for next spring.

 *   Leadership Circle, L.L.C. has more than 130 single-family lots in various stages of construction and 16 nearing completion, with 32 targeted for completion by October. Six single-family homes are currently under construction with plans to start at least 10 more homes before October. A 5.5 acre lot is targeted for developing two apartment buildings with between 100 and 120 units.

 *   Roers Development, Inc., a Fargo-based company with projects in Minot, Jamestown and Fargo, is planning a major five-year project in Dickinson, which will include about 85 single-family homes; about 85 twin homes; up to 320 apartment units; and about 13 acres of commercial land for stores and services.

Water Needs

The State Water Commission has approved 34 groundwater and six surface water permits to help meet industrial and municipal water needs in western North Dakota. Depots in Dodge, Ray, Tioga, Stanley, Watford City and elsewhere are providing the water necessary to address the long-term municipal water supply needs of the petroleum industry to enhance industry sustainability.

Pipeline Capacity

New pipeline capacity is helping to reduce wear and tear on state and county roads. In fact, pipeline and rail capacity in the state now exceeds production in both North Dakota and Montana, resulting in reduced discounts for producers of North Dakota petroleum and less stress on the state’s infrastructure. For example, the new Four Bears Pipeline scheduled to be completed late this year or early next year will be able to transport 60,000 barrels of oil per day, enough to take 300 trucks a day off ND 22 and ND 23 between New Town and Dickinson. Other intra- and interstate pipelines and gathering systems throughout western North Dakota are reducing traffic on the roads.

Studies and Initiatives

To help cities and counties with their planning, Goettle said the Commerce Department is collaborating with the Oil and Gas Producing Counties and other state agencies on studies and initiatives to gather information about transportation, housing and workforce needs prior to the upcoming session.

 *   Transportation: The study is compiling an assessment of current traffic counts on key county and township arteries in order to quantify short-, intermediate- and long-term needs. Goettle said a draft report is expected by mid-November.

 *   Housing: The North Dakota Housing and Finance Agency, the North Dakota Department of Commerce and the Bank of North Dakota are providing 70 percent of the funding for a comprehensive housing assessment to identify opportunities and barriers to housing development in these communities.  When completed, sometime in December, the final report will include an examination of housing issues from the employers’, communities’ and developers’ perspectives. The communities of Watford City, Williston, Tioga, Stanley, New Town and Parshall have joined this study.

 *   Workforce: The North Dakota Petroleum Council and the North Dakota Department of Commerce are conducting a workforce needs assessment to project the workforce and skill needs for the oil and natural gas industry and industry sub-sectors.  Seventy-seven oil and gas employers were targeted for this survey.  This survey also includes a series of questions designed to assess short and long term housing demand to feed into the housing study described above. The study is to be complete before the legislative session begins in January.

 *   Technical Assistance: This $300,000 technical assistance matching grant program available through the North Dakota Department of Commerce will help cities and counties in oil development areas craft plans for water, sewer, zoning and other infrastructure needs connected with oil and gas development.  To date, Commerce has received formal applications from McKenzie County, Adams County, Stark County, Parshall, Crosby, Stanley and Killdeer and interest from a number of other communities.

State Agencies Working To Help

Meanwhile, the state is working to help through existing agencies and programs. The ND Public Finance Authority is providing assistance with bonds, up to $10 million in two phases to reduce risk. The Bank of North Dakota is providing Flex PACE loans; letters of credit to mitigate risk for necessary infrastructure in support of housing developments; access to credit with local lenders; and a variety of housing programs, including a $10 million pool to purchase USDA Guaranteed Loans. The North Dakota Housing Finance Agency is providing a total of $4.2 million in western North Dakota through a broad range of programs to provide financial assistance for low- and moderate-income housing.

“We’re working with cities and counties to provide the funding and technical support necessary to substantially boost their ability to meet both the immediate and long-range transportation, housing, and water needs of their communities,” Goettle said.

Moving Forward

Goettle said the various studies are advancing to fully assess needs. The challenge for lawmakers and local authorities will be to find consensus on how those needs will be presented and funding will be administered and distributed.

“North Dakota is investing significant sums of money to address infrastructure needs in this region,” Goettle said. “In doing so, it’s essential that we not only make funds available but that we ensure the money is being used wisely and in a way that will provide meaningful long-term solutions.”