Bill Seeks to Expand North Dakota’s Oil Footprint With Tax Breaks

A workover rig is shown in Williams County.  (Kyle Martin/For the North Dakota Monitor)

(Jeff Beach – North Dakota Monitor) – A bill seeks to encourage drilling for oil outside of North Dakota’s highly productive Bakken Formation and take advantage of the Trump administration’s desire for U.S. energy dominance.

“Drill, baby, drill is real,” Ron Ness, president of the North Dakota Petroleum Council said Tuesday, repeating a Republican mantra for oil and gas development.

Ness was testifying in support of House Bill 1483, which would expand an oil extraction tax exemption outside the Bakken and Three Forks formations.

The Bakken has produced more than 5 billion barrels of oil, mostly since 2007, Ness said. But he said North Dakota has 10 other oil production zones that have potential.

While the Bakken is dominated by large, publicly traded companies, Ness said the tax break would encourage more drilling by smaller operators, or wildcatters, “trying to to find the next big thing.”

North Dakota has a 5% oil extraction tax and a 5% oil production tax. The law already allows a 2% oil extraction rate for some oil produced outside of the Bakken and Three Forks formations.