Thursday, November 24, 2011

N.D. Oil Boom Creates a Boom in N.D. Millionaires

BISMARCK, N.D. (AP) — "The number of North Dakotans reporting seven-figure incomes is swelling and incomes across the state are rising, spurred largely by wealth gained from the state's oil patch, the state Tax Department said. Figures released to The Associated Press show 532 people reported adjusted gross income of more than $1 million on their 2010 individual tax returns, compared to 384 reporting that income on their 2009 returns, a 38.5 percent increase.

Tax Department analyst Kathy Strombeck said the increase in the number of North Dakotans with million-dollar income comes in part from royalties paid to mineral owners by oil companies. Tax Department records show the average adjusted gross income in the state increased from $46,860 in 2009 to $53,036 last year. State officials say the oil industry has helped bump wages throughout the state and created hundreds of high-paying jobs."

MP: More evidence that the domestic oil production in the Bakken shale oil fields is creating millionaires, wealth, prosperity, jobs, higher wages, and even increased tax revenues in the economic miracle of North Dakota, America's most successful state.     

12 Comments:

At 11/24/2011 11:26 PM, Blogger Hydra said...

By wealth gained from the states oil patch............

 
At 11/25/2011 12:38 AM, Blogger kmg said...

ND is Obama's worst nightmare, given that Obama's goal is to create no jobs unless they are in green snake oil.

 
At 11/25/2011 8:03 AM, Blogger juandos said...

Consider the following from Goldman-Sachs: Goldman Sachs predicts that U.S. will be world’s largest producer of oil in 2017

Maybe the most interesting part of the story are the 'related posts' below the story...

 
At 11/25/2011 8:03 AM, Blogger Jim said...

This will be great for Florida real estate in a few years. After all those ND new rich count their millions and pay their first state income tax bill, they will move to Florida where there is no state income tax and much better weather. After all, who wants to pay to live in North Dakota??

 
At 11/25/2011 10:05 AM, Blogger Rufus II said...

From Juandos' link:

This significant production boost will occur as a result of utilizing a new definition of oil and generous estimates for the amount of liquids-rich shale production that can occur,

They're figuring, it looks like, on a large increase in ethanol production.

 
At 11/25/2011 10:05 AM, Blogger Rufus II said...

From Juandos' link:

This significant production boost will occur as a result of utilizing a new definition of oil and generous estimates for the amount of liquids-rich shale production that can occur,

They're figuring, it looks like, on a large increase in ethanol production.

 
At 11/25/2011 11:14 AM, Blogger Che is dead said...

"By wealth gained from the states oil patch............" -- Hydra

Poor baby, still traumatized by the fall of Mother Russia? Fondly remembering how the state hanging on to all those natural resources during the Soviet era translated into wealth for the working class?

 
At 11/25/2011 1:02 PM, Blogger VangelV said...

MP: More evidence that the domestic oil production in the Bakken shale oil fields is creating millionaires, wealth, prosperity, jobs, higher wages, and even increased tax revenues in the economic miracle of North Dakota, America's most successful state.

This is a great example of how employees can get very rich even when their employers or the customers of their employers are burning through cash.

The problem with the ND story is the lack of profit for the marginal producer because the costs are too high. I keep hearing the words 'asset sales' and 'funding gap' on conference call after conference call even as shareholders are promised that positive cash flows and self funding are just a year or two away. If there is a stock market correction again many of these companies will wind up bankrupt. If you like energy the conventional producers are a much better bet.

 
At 11/25/2011 4:36 PM, Blogger arbitrage789 said...

Now Obama has TWO reasons to hate what is happening in ND.

One, the oil drilling. Obama hates that.

Two, millionaires... (need I say more?)

 
At 11/25/2011 7:29 PM, Blogger OBloodyHell said...

Time for OPERATION: NORTH DAKOTA!!!

Bwaaaaaaahahahahahahahahahahahaaaaa!!!

THAT I wanna see. :D

 
At 11/26/2011 6:14 PM, Blogger Hydra said...

Che: where do you get this crap?

I neither said nor intimated anything of the kind.

All I pointed out is that private wealth is being developed from what was described as the states oil patch.

I am in favor of strong property rights, but I am not sure how that translates. Under north Dakota law or otherwise.

Say your great grandfather bought a patch of ground for dry land wheat farming in the late 1800s. Now they are pulling gas and oil out of the ground a mile below.

Whose oil is it, really? If grandpa did not knowingly buy the oil, and the seller willingly sold it, then where is the free association in the bargain?

How and why is the ownership of such a distributed and undefended resource any different from air and sunlight?

Is it a matter of access? Ie, you cannot get to the oil without renting my (surface) property? Or do I actually own a cone reaching to the center of the earth? If so, do I also own the air and airspace above my property?

If I understand correctly, everyone in Alaska shares in the oil revenue. How is the north Dakota situation different, and how is it better?

How do north Dakota millionaires earn their money, and how long before they take it to Florida or Texas?

I just see a phrase like that, and it highlights to me, once again, all of the ambiguities about property rights that are built in to our use of the language.

As a strong proponent of property rights, I figure that you should own what you own, unambiguously.

The obvious flip side is that you should pay for what you get, unambiguously.

 
At 11/26/2011 9:34 PM, Blogger VangelV said...

Whose oil is it, really? If grandpa did not knowingly buy the oil, and the seller willingly sold it, then where is the free association in the bargain?

I think that granpa has a better claim than anyone else.

 

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