North Dakota Officials to Put Unused Federal Virus Funding into Oil Production, Education

north-dakota-energy-sector Reuters

Officials in North Dakota voted to use $221 million from federal coronavirus funding to use for other purposes to benefit the state and its citizens, including $16 million in grants to help oil companies and for education costs.

The North Dakota Emergency Commission announced the decision on Friday, with the Bismarck Tribune reporting that producing oil in the state includes the use of hydraulic fracturing or fracking.

The Associated Press (AP) reported on the development:

The money comes from the $1.25 billion awarded to the state through the Coronavirus Relief Fund established by the federal CARES Act. The Oil and Gas Division plans to award the $16-million grant to oil companies for acquiring and disposing of water used in the hydraulic fracturing process, in which water, sand and chemicals are injected underground to crack rock and release oil.

State Mineral Resources Director Lynn Helms said the grant would help create jobs and help stabilize oil production by leading to an increase in well drilling. Officials said higher oil production would stabilize the state’s revenue.

Helms added that oil companies have been hit hard by the price drop resulting from the pandemic, leading to slow work in the state’s oil fields.

Environmental activists and Democrats oppose the plan, AP reported, including the Sierra Club, which called it “totally inappropriate” because they believe the money should be used for virus-related projects.

Democrat state Sen. Tim Mathern said in the AP report that the plan is “an incredible misuse of tax dollars that could help small businesses or independent contractors struggling to stay open or working families barely able to afford rent.”

The commission also voted to give $33 million to the state’s education department, $29 million to the Department of Commerce for economic resiliency grants and $61 million to counties and cities to help with law enforcement and other costs.

Proposals from the state agencies have to be approved by the North Dakota Legislative Assembly, which is scheduled to meet next Wednesday.

The assembly is controlled by Republicans, according to Ballotpedia.

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