Senator proposes study on state-owned oil and gas association; industry group opposes

Senator Jeff Magram introduced Senate Concurrent Resolution 4,026, asking the Senate Energy and Natural Resources Committee to direct an interim study into the feasibility and desirability of establishing a state-owned association to develop and produce oil and gas in North Dakota. The resolution would have the study examine exploration, extraction, transportation, storage, processing, refining, and direct sale of oil and gas products and report to the next legislative assembly.

The proposal is intended as a fact-finding step rather than immediate policy change. "What I'm asking for here is a study just to look at what it would take to basically, for the state to get an oil business," Senator Jeff Magram said, adding that proponents want to explore ways to keep more resource revenue and profits in state coffers and potentially earmark funds to reduce property and sales taxes.

Andrew Alexis Farvel, secretary of the Nonpartisan League, testified in support and framed the resolution in historical context: state enterprises such as the Bank of North Dakota and the State Mill and Elevator were created a century ago in part to counter out-of-state extraction of value. "All this resolution does is call for an interim study, to investigate the feasibility of establishing a state owned association to develop North Dakota's oil and gas," Farvel said.

The North Dakota Petroleum Council, represented by Ron Ness, stood in strong opposition. Ness urged caution on several technical and economic grounds: refinery construction and operation is capital intensive and risky; regulatory and tax questions about whether the state would collect or forgo production taxes and other levies were unresolved; and the state already partners with research and education bodies, such as the Energy and Environmental Research Center, to advance industry capacity. "The state is the biggest mineral owner, has the most gain and benefit — they should be investing in research and education," Ness said, arguing partnership rather than state ownership is the preferable path.

Committee members pressed supporters on specifics. Chairman Patton and other senators asked whether the model would be state ownership of physical assets versus state financial participation in private projects; Magram suggested the state could acquire an existing refinery or equipment if available. Senators also asked about liability for downturns in oil prices; Magram acknowledged the state could face losses but said other state enterprises have weathered cyclical losses historically.

No formal action or vote was taken in the committee; the hearing record includes testimony for and against the resolution and the chair closed the hearing after public remarks. The resolution as filed calls only for a study and reporting to the next legislative assembly.

Further details from the hearing: - Supporters emphasized precedent in state-owned institutions and the potential to retain more revenue in North Dakota. - Opponents warned of competitive, legal, tax and operational complexities and urged continued investment in research and private–public partnerships. - Committee members asked clarifying questions about ownership models, the role of pipelines, the state's existing tax structure on oil production, and historic refinery economics.

The committee closed the hearing on SCR 4,026 with no committee recommendation recorded at that time.