Big Talk, No Walk

Governor Brian Schweitzer talks big on natural resource development, but when it comes down to it little action has taken place. At a time when state revenue is falling drastically short of supporting the bloated government in Helena, the governor travels the country touting oil, coal, natural gas, and of course wind. While his speeches talk of grandiose progress in our state, the folks are struggling to make ends meet, jobs are in short supply, and the legislature is talking about raising taxes.

When a Montanan steps back and looks at our next door neighbors to the south and east we see two states that are developing their natural resources for the betterment of the citizens. Wyoming has coal, of course, and North Dakota is in the midst of one of the biggest oil booms in the country. North Dakota recently brought in $158 million in revenue from oil and gas leases on state lands and cities in the western part of the state are booming.

Here in Montana we might expect to be having a boom of our own, but that is not the case. The Governor’s statements about increasing energy production and decreasing our national reliance on foreign oil at the 2008 Democratic National Convention, don’t really add up: The Energy Information Administration states that Montana has gone from producing 2.4 million barrels of crude in January 2005, to a high of 3.1 million barrels in August 2006, to a dismal 1.3 million barrels in February 2010; compared to North Dakota’s production of 2.8, 3.5, and an astonishing 7.3 million barrels in the same months. Montanans have to ask ourselves, how did we get left out of the game? The Bakken Formation is in our state too! That answer is two-fold, first, the formation may hold more accessible oil in North Dakota, but we should still expect to see more exploration than we currently do. Secondly, Republicans in North Dakota control the governor’s office as well as both houses of the legislature. Taxes on oil production in North Dakota are 5% of the gross production value, here in Montana, we have a variety of different rates depending on what stage of the process and the type of well is producing the oil. While some of the rates are meant to encourage exploration and production, after a certain period of time the rate is increased to about 9% on most wells. The problem is in more than just the tax structure, because of the influence of the environmental lobby, Montana is generally perceived to be closed for business.

A perfect example of this occurred during the 2009 Legislative Session. Rep. Kendall van Dyk of Billings, with the support of Governor Schweitzer, proposed a $1 tax on every barrel of oil produced in Montana. This tax came on the heels of the price of Montana crude going from an all-time-high of $126.80 per barrel in June of 2008 to $26.76 per barrel in January 2009 (when the bill was introduced). What kind of company would come here when our governor and elected officials turn their back on jobs for hard-working Montanans in the midst of a recession for a political stunt to grab the headlines. Our governor can talk the talk to his coastal friends with deep pockets all he wants, but the numbers prove he hasn’t walked the walk.
Just as a side note – Kendall van Dyk is running against Sen. Roy Brown for Roy’s Senate District 25 seat, Roy needs our continued support to make sure the anti-development and anti-business van Dyk is not elected.