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Vol. 17, No. 19 Week of May 06, 2012
Providing coverage of Bakken oil and gas

Anderson: North Dakota not just about oil

Rose Ragsdale

For Petroleum News Bakken

North Dakota has one of the strongest economies in the nation and while oil plays a role, it is only one piece of the puzzle, making up just 25 percent of the state’s revenue collections, North Dakota Commerce Commissioner Alan Anderson said in commentary written for Prairie Business Magazine, titled, “Growth in targeted industries led to state’s strong economy.”

“Steady growth in North Dakota’s targeted industries is key to our state’s strong economy and diversification. These targeted industries include advanced manufacturing, energy, value-added agriculture, technology-based business and tourism.

“Our technology sector has gained national recognition and our information technology subsector job growth has been triple that of the nation. Microsoft and Amazon have both recently expanded. Amazon added a 30,000-square-foot facility that will expand its customer service operations in Grand Forks and create 200 full-time jobs. Microsoft’s Fargo campus is one of the larger Microsoft locations worldwide, and its three buildings house over 1,500 employees, vendors and contingent staff.

“Manufacturing also continues to grow in North Dakota. One example is the recent expansion announcement by Caterpillar in West Fargo. Construction has started on a $50 million project that will create about 250 new jobs during the next three years, nearly doubling the plant’s current workforce. Caterpillar officials told us that North Dakota’s pro-business climate was a major factor in its decision to expand in West Fargo. Phoenix International, a company that manufactures electronics for John Deere, recently broke ground on a $22 million expansion project that will include 90,000 additional square feet in Fargo for an expanded work force.

“The state’s business growth also includes expansions at WCCO Belting in Wahpeton, Harris Manufacturing in Oakes, and at the Monsanto and Cargill facilities in the Fargo area. Cargill recently started a $50-million expansion project and Monsanto has completed a $17.5 million expansion that has created 20 new jobs.

“Tourism is another area that continues to drive North Dakota’s economy as the third-largest contributor to gross state product. The tourism industry growth is visible by looking at the number of new hotels constructed across the state. In the past two years, 21 new hotels have opened, adding 1,474 sleeping rooms in 11 communities. Another 24 hotels are under development and are expected to add another 1,800 rooms by later this year.

“North Dakota has the lowest unemployment rate in the nation; we have 16,000 plus jobs openings, with 60 percent of those outside of oil-producing counties. In fact, the counties with the greatest number of job openings right now are Cass with 3,684 and Burleigh with 2,797.

“North Dakota has added nearly 50,000 new jobs in the last decade. The American economy grew at a pace of 2.9 percent last year, while North Dakota’s economy increased by 7.1 percent last year.

“Oil is just one piece of our economic success and our economy is much bigger and more diverse than ever before,” Anderson concluded.

Fast-growing oil sector

But the oil industry is a rapidly growing and highly lucrative sector of the state’s economy.

In a March 20 presentation to the North Dakota Legislature’s Energy Development and Transmission Committee, Lynn Helms, director of the state’s Department of Mineral Resources, used the adjacent oilfield employment chart in his presentation.

“It’s important to see that in 2011 we were at 35,000 oil field jobs; by the middle of this year we expect to be at 45,000 … peaking in 2020 at 65,000. We peak and then we drop back to a long-term producing paradigm of 45,000 people,” Helms told committee members.

The multiple for every oilfield job is 2.5, he said. This adds another 112,500 people in support positions to the 45,000 figure for permanent oilfield jobs.

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