While the North Dakota oil boom has generated a fresh crop of wealthy landowners, those newly minted millionaires don’t fit the stereotype of a “fat cat,” according to a recent story in Investment News. In fact, they are more likely to remain low-key, with an eye toward helping their neighbors.
“Their grandparents were homesteaders here on not-very-fertile land, and they’ve scratched to earn every cent. Today, their lives haven’t changed and they don’t want them to,” Greg Gunderson, president and chief executive of Bismarck, N.D.-based Investment Centers of America, told Investment News.
Gunderson said many landowners have used their new-found wealth to support local churches, schools and charities as well as organizations that provide aid to the poor.
“If you didn’t know, you would never be able to tell if someone here earns $50,000 or $500,000,” Gunderson told Investment News.
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Hamm: State needs to ‘shake the negativism’
As North Dakota continues to process the effects of the Bakken boom, the state needs to “shake the negativism” that has begun to emerge, Continental Resources CEO Harold Hamm recently said in an interview with radio host Scott Hennen.
“We need to stop it, there is no place for it,” Hamm said. “There are so many good stories out there it’s unreal.”
Hamm told Hennen that a few incidents are being cited and “people are making a big deal out of every one of them,” adding that North Dakota needs leadership from all sectors to guide the state through these heady times.
“A few people are providing it (leadership), but everybody needs to get in tune,” Hamm told Hennen. “I see a great future for North Dakota.”
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Hotel business reaches new heights
As one might expect, it is a good time to be in the hotel business in North Dakota.
According to a recent story from Helena, Mont.-based television station KXLH, Bozeman, Mont., developer Andrew Braxton is building a hotel and community center in Williston, N.D., a community that continues to witness phenomenal growth. In the last year alone, according to KXLH, Williston has added 10 hotels, with another half-dozen expected to open this summer.
Even with that exponential increase in rooms, rates are still pricey, with an average night’s stay costing around $250, according to KXLH.
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CBO report: Increased oil production not a sure thing
The popular refrain that lowering energy costs by increasing domestic production of oil might in fact not be the most effective U.S. policy, according to a story in the International Business Times.
The IBT piece cites a Congressional Budget Office Report released in May on the nation’s energy security, which said that promoting greater production of oil in the U.S. would most likely not protect consumers “from sudden worldwide increases in oil prices stemming from supply disruptions elsewhere in the world, even if increased production lowered the world price of oil on an ongoing basis.”
According to the IBT, the report takes an opposing stance against the oil industry and Republican presidential hopeful Mitt Romney, among others, who have accused President Barack Obama of pushing regulatory policies that limit energy development as well as curbing oil and gas production on federal lands.
“In fact, such lower prices would encourage greater use of oil, thus making consumers more vulnerable to increases in oil prices,” IBT quoted the report as saying, adding the report also noted the U.S. lacks enough spare production capacity to hold in reserve when prices start to climb. Plus, because U.S. oil production is in the hands of private companies, those firms are not likely to withhold oil for a “rainy day” when it could be sold for a profit, according to the report.
On a global scale, the IBT quoted the report as saying that an increase in U.S. oil production might cause other oil-producing countries to curtail their production to keep prices from falling.
The report suggested policies and potential legislation to reduce the U.S. demand for oil as well as releasing oil from the strategic petroleum reserve to offset temporary supply disruptions, according to the IBT.
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