BISMARCK, N.D. (AP) - North Dakota is “stronger than ever” but slipping oil prices could hinder the state’s economic rise, Gov. Jack Dalrymple said Tuesday in his State of the State speech.
“In the end, our growth may be slowed but it will not stop,” the Republican governor told a joint session of the North Dakota Legislature as lawmakers began their 2015 session.
Dalrymple’s 40-minute address featured similar themes as a speech he gave last month while unveiling a proposed two-year, $15.7 billion budget, which is some $10 billion more than the state’s budget a decade ago.
Prices for North Dakota sweet crude have slid below $50 barrel this week, a several-dollar drop from when Dalrymple delivered his December address. Highlights of his preferred budget include $3.7 billion to help western North Dakota’s oil-producing region address its rapid growth.
The governor said it’s fair to ask if the state’s spending is out of control “in light of recent drops in oil prices and the potential impact on state revenues. But he said the state “is committed to a structurally balanced state budget, where ongoing spending never exceeds our available, ongoing revenues.”
“There are risks associated with any economy that relies on the value of commodities, and those risks must always be carefully considered,” Dalrymple said.
He predicted a “correction” or “rebalancing” of worldwide oil production, despite OPEC’s recent decision to not curb oil production - a move that is seen as a threat to domestic oil production.
In the meantime, he said, production in North Dakota “may concentrate in core areas where production is especially high and operating costs per barrel are low.”
Dalrymple called U.S. oil production led by emerging shale plays like those in North Dakota “a game changer.”
“No longer can OPEC and other foreign oil producers hold our country hostage to their control of oil supplies,” he said.
He cited several surveys that said North Dakota ranks among the best states in the nation in terms of the economy and quality of life. He also touted the state’s reversal of fortunes from a decade ago, when North Dakota was the only state in the nation to lose residents. It now has a record population of about 740,000 residents and the nation’s lowest unemployment rate at less than 3 percent.
“I suspect there are many governors all across this great nation who wish they could offer an address like the one I share with you today,” Dalrymple said.
Republicans have two-thirds control in both the North Dakota House and Senate.
Senate Minority Leader Mac Schneider and House Minority Leader Kenton Onstad said Dalrymple’s address lacked long-term vision.
“We all know the state is strong but what’s the state going to look like 10 or 20 years from now?” said Onstad, a Parshall Democrat.
Schneider, a Grand Forks Democrat, said Dalrymple offered “appropriate optimism” for the short term in his address and he agreed with the governor’s predictions on the potential for rebounding oil prices.
“The price of oil should give rise for concern but certainly not panic,” Schneider said.
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