BISMARCK, N.D. -- Six Democratic state legislators and Agriculture Commissioner Roger Johnson have formed a task force to explore whether North Dakota should get into the oil refining business, reported the Associated Press.
Expanding North Dakota's refining capacity may help moderate prices for gasoline and diesel fuel, which are among the nation's highest, and ensure a more regular supply, lawmakers said at a news conference earlier this month.
During the last several months, fuel dealers often found themselves scrambling for supplies because of refinery shutdowns and other factors. [image-nocss] Governor John Hoeven waived workday limits for commercial truckers who deliver fuel because they often had to spend hours in line to take on their loads.
"We can't be running out of product. We can't have farmers sitting out there not being able to harvest, when we're one of the largest producing oil states in the nation. That's ridiculous," said State Representative Rod Froelich (D).
Another group member, State Senator Tim Mathern, D-Fargo, is seeking the Democratic endorsement to oppose the re-election bid of Hoeven, a Republican. Mathern has discussed the idea of having a state-owned oil refinery.
Two lawmakers from western North Dakota's oil-producing country, State Reps. Shirley Meyer (D) and Kenton Onstad (D) will be co-chairs of the task force. Other members include Johnson, Mathern, Froelich, State Sen. Aaron Krauter (D), State Rep. Pam Gulleson (D) and Frank Moseley, a finance professor at Minot State University who has a background in the oil industry.
Hoeven in September formed an energy policy committee, headed by Shane Goettle, director of North Dakota's Commerce Department, to look into ways to boost the state's energy production from oil, coal, ethanol, wind and other sources. A legislative interim committee also is exploring energy issues, along with ways to encourage development of more electric transmission and fuel pipeline capacity.
In October, the state Industrial Commission awarded a Williston businessman, Mel Falcon, a $40,000 grant to look into the possibility of building a new oil refinery in northwestern North Dakota. Johnson is a member of the Industrial Commission, which oversees state oil and gas regulation.
During the 2007 legislature, Froelich and Meyer sponsored a resolution asking for a legislative study of whether the state should finance a new refinery or offer incentives to encourage private companies to build more processing capacity. It was defeated in the House.
Tesoro Corp. has an oil refinery near Mandan, the only one in the state. It processes about 58,000 barrels of oil daily. Oil production in North Dakota has been rising, and is now approaching 130,000 barrels daily.
Onstad said the task force would consider a number of possibilities for encouraging the development of more North Dakota refining capacity, including industry tax incentives, a state partnership with a private company to build a new refinery or a state-owned refinery.
Mike Rud, president of the North Dakota Petroleum Marketers Association, said state investment in a refinery would be welcomed if it helps moderate fuel prices and ensure that stations have fuel to sell. "Whatever is the fastest way to solve this problem is what we're for," Rud told AP. "And as long as it doesn't put a major pinch on the consumers and the retailers of North Dakota, we'll be all for whatever direction this project takes."
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