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Here is the latest, that is including and through March 2014 and Year To Date data. There are no surprises here and really just what we would have expected. That is good.

First of all, remember both Devils Lake and Jamestown are going to be getting service from a new airline and that will bring a change in their destinations. That begins this fall if I remember. In the meantime, they have no service. That is why their reports are zero.

Second, as it has been for a few years now it is the oil patch airports of Williston and Dickinson that are still our big growth. For those who say the boom is over they need to look at this. It is probably fair to say that the oil companies know where the oil is, but there are still thousands of wells to be drilled to get at that oil. Someday there may be fewer people coming in to finish this up, but it isn’t now.

It is nice to see Minot has finally, I think, completed its adjustment from its terrible flood. Now we will be able to see the effect of oil. I think, as we see this month, that effect is growth in a lot of areas including airline boardings.

Bismarck is probably the only major city slowing down, and that is both because of changes in the oil boom and the fact that the legislature is not meeting this year. The oil boom is because of the current decline in state land leasing.

Finally, Fargo shows it is the busiest, fastest growing industrial town. Grand Forks disappoints me. A year ago it showed signs to me that it might be the next growth area in the state as Fargo was wrestling with some of the growing pains a city needs to go through. This month doesn’t support that thesis. We will have to wait a couple of more months to see if that is happening.

 

We are not there yet. At least we weren’t in February. Of course in the depths of winter, one of the worst winters in a long time what do you expect, but boy is this country lucky. Just think of all the American men and women who are alive today because of The Bakken, oil and gas.

I just read recently that America will reach a point of being a net exporter of oil. Just think of those long lines at the gas pump. Think of all the articles, the dire articles that were written about our future. Yes, others will gain as well, and some of them are not too nice, but with the proper leadership, well things are looking good again for America.

That doesn’t mean we can not be concerned about global warming, or at least studying the science to see if it is true. That doesn’t mean we shouldn’t design safe pipelines, or tank cars. But just think of how much better the American economy is today because of fracking. All those railcars, all those pipes, all those people employed. All that money including in our taxes. Especially what we are setting aside for our children and grandchildren, even great grandchildren.

What will they write about us in the books a hundred and two hundred years from now.

So, here is the current data. Now it will get interesting as we go into the summer.

 

Should we call it “The Perfect Storm”? I, along with most economists who write about agriculture because it is so important to those areas we are writing about have been saying crop prices are going to go down and that means the incomes we look at are going to decline.

We apparently were right. If you read Moody’s Analytics chart of wheat and soybeans, two important ND crops, that is what has been happening. Their prices are declining. As always I am surprised about Moody’s analysis. Where is the corn. It isn’t on the chart and it certainly has become important to ND. So too have been dry beans and they are also not charted.

So, take the figures with a grain of salt, no, at least a half teaspoon of salt. With what they show though wheat and soybean prices are more than 20 percent about the 2010 base. Of course in 2011 and 2012 they both were as much as 60 percent higher than in 2010 and that is significant. If they were shown, so too would corn and dry beans. Moody’s show all food commodities at about 25 percent above the 2010 average, down from a peak in late 2012 of about 35 percent above the 2010 base of 100.

If you don’t believe that has made a difference just drive by the implement dealers lots and look at all the machinery in their lots. If that doesn’t convince you go inside and ask a salesman. Watch their eyes.

As for Moody’s projections, they are only short about a percent a one-half in sales taxes. That is certainly within the realm of acceptability. However, individual income tax collections are nearly 40 percent above their predictions and so too the corporate income taxes, collections more than 40 percent above their predictions. Auto sales excise taxes are 10 percent short of what they predicted.

They are so far off on so many accounts that when it comes to the bottom line the net figure collected is only a little more than 6 percent greater than their predictions.

This begins to get complicated, but please note: The general fund cap for oil and gas taxes contains two tiers. The first tier of $200.0 million was reached in October 2013. Additional oil taxes will flow to the property tax relief fund until that fund receives $341.8 million, after which time the general fund will receive an additional $100.0 million. Total production and extraction tax collections were $250.3 million in February 2014. Monthly allocations to the property tax relief fund were $73.4 million; allocations to the legacy fund were $69.6 million.

Standby. A significant negative in collections could lead to an interesting situation before the biennium is completed. I don’t know the people in OMB, and I have tried to keep my comments from being partisan in anyway, but I am glad that Jack Dalrymple is the Governor. They may have a tiger to ride before the biennium is over.

 

Normally we think that the airline data for February is sort of ho-hum. But this year there is something to comment on at least. That is, the total boardings for February exceeded 100,000 passengers. That is the first time that has ever happened, and it is a substantial increase from as recently as five years ago.

Of course the weather maybe had something to do with it. People wanted to get away this winter. But the main reason, the big change for North Dakota is oil. Oil has changed North Dakota in ways that we could not have imagined even those five years ago. North Dakota is a mainstream and highly important state of the U.S.

Just think how what has happened here has lessened the impact of the recession. Remember, it is not just in this state, but it is all the industrial production that took place across the United States because of the Bakken. Building all those pipes, all the airline trips, even all the extra calories consumed in the United States because of the hard working people.

As for my comments, not much different than last month. Minot again is down because they are post flood activity and Williston has a lot more flights than two years ago. So too Dickinson.

Devils Lake and Jamestown no longer have airline service until this summer, and we still exceeded 100,000 passengers.

Now we need at least another month to see what depth the economic change will take. Let’s hope our politicians provide the leadership this country needs.

 

Well the weather has kept us from the million barrel mark to the point of this report, but it wouldn’t surprise me if March is the month. In any case, it will happen soon, real soon.

We see how the weather has affected us. The rig count was down from December to January and the well completion number was nearly only one half-119 to 60. This was a tough winter, and there is no guarantee it is over yet.

According to Lynn Helms there were only three days in January too cold for fracking, but there were 12 days too windy for well completion work. Twelve days, that is 40 percent of the month gone because of the wind.

We are beginning to see the federal governments plans for fracking on federal land. BLM published proposed rules and they received 177,000 comments. Don’t know what the rules said and I don’t know what the comments said, but the BLM withdrew the rules. That gives me an idea of the direction of what they were saying.

They then issued a new proposed rule last May with the comment period ending in August. That rule brought 1.2 million comments. Next week the Department of Interior is holding a meeting in Denver to “continue dialogue on implementation of the rules”. They are also starting the process of new venting and flaring regulations.

North Dakota has said from the beginning of this that it would be the federal government that would stop this oil activity. Now we will see. The time is here.

In the meantime here is the production for the middle of the winter. Pretty good I think. Where we go from here is up to us as a nation. I have included a new section comparing the different oil patches around the country. Proves how important the Bakken-Three Forks is.