Wary of squandering a windfall that will not last forever, North Dakota set aside a share of its oil taxes in a permanent fund meant to outlive the wells themselves.
Booms end, and the wisest response to a windfall is to save some of it. Mindful that the oil beneath the west is a finite inheritance, North Dakota chose to divert a share of its oil and gas tax revenue into a permanent savings fund — a nest egg meant to grow with investment and to outlast the wells that filled it.
A Nest Egg from the Oil Patch
The idea is an old prairie virtue written into public finance: put by something in the fat years against the lean. The fund's earnings can steady the state's budget when the oil price sags, softening the busts that would otherwise cut deepest just when help is most needed.
From the almanac's reckoning:
- A share of oil and gas tax revenue flows into a permanent savings fund.
- The fund is designed to outlast the finite oil resource itself.
- Its earnings can help steady the state budget during price downturns.
Debates continue over how much to save and how the earnings should be spent, as they must in any democracy. But the almanac approves the instinct behind the fund — that a resource dug once and burned once ought to leave something behind for the generations who never saw the boom.
Elsewhere in the Almanac
The Roughneck's Trade on the Bakken Rig
On drilling floors across the west, the roughnecks work the pipe in long shifts through heat and cold, in one of the hardest and best-paid trades the plains have to offer.
Carbon Capture Comes to the Lignite Country
Hoping to square coal with a lower-carbon future, engineers on the Missouri Slope are pursuing projects to capture carbon dioxide and lock it deep beneath the plains.
Produced Water: The Oil Patch's Other Flood
For every barrel of Bakken oil comes salty water from deep in the earth, and managing that brine has become one of the oil patch's quietest and costliest challenges.