# Oil creating 'overnight millionaires' in N.D.



## h2ofwlr (Feb 6, 2004)

*Oil creating 'overnight millionaires' in N.D.*
Wealth brings bling to the prairie, but folks vow to stay true to their roots
James MacPherson / AP
http://www.msnbc.msn.com/id/25466382?GT1=43001

The oil well on Oscar and Lorene Stohler's ranch in Dunn Center, N.D., has made them millionaires in less than a year.
updated 8:54 p.m. CT, Mon., June. 30, 2008

BEULAH, N.D. - Oscar Stohler was raised in a sod house in western North Dakota and ranched there for nearly seven decades. He never gave much thought to what lay below the grass that fattened his cattle.

When oilmen wanted to drill there last year, Stohler, 83, doubted oil would be found two miles underground on his property. He even joked about it.

"I told them if they hit oil, I was going to buy a Cadillac convertible and put those big horns on the front and wear a 10-gallon hat," Stohler recalled.

He still drives his old pickup and wears a mesh farm cap - but it's by choice.

In less than a year, Stohler and his wife, Lorene, 82, have become millionaires from the production of one well on their land near Dunn Center, a mile or so from the sod home where Oscar grew up. A second well has begun producing on their property and another is being drilled - all aimed at the Bakken shale formation, a rich deposit that the U.S. Geological Survey calls the largest continuous oil accumulation it has ever assessed.

'*Overnight millionaires'*Landowners in western North Dakota have a much better chance of striking it rich from oil than they do playing the lottery, say the Stohlers. Some of their neighbors in the town of about 120, from bar tenders to Tupperware salespeople, have become "overnight millionaires" from oil royalty payments.

"It's the easiest money we've ever made," said Lorene Stohler, who worked for decades as a sales clerk at a small department store.

State and industry officials say North Dakota is on pace to set a state oil-production record this year, surpassing the 52.6 million barrels produced in 1984. A record number of drill rigs are piercing the prairie and North Dakota has nearly 4,000 active oil wells.

The drilling frenzy has led companies to search for oil using horizontal drilling beneath Parshall, a town of about 980 in Mountrail County, and under Lake Sakakawea, 180-mile-long reservoir on the Missouri River.

"I have heard, anecdotally, that there is a millionaire a day being created in North Dakota," said Ron Ness, president of the North Dakota Petroleum Council.

Kathy Strombeck, a state Tax Department analyst, said the number of "income millionaires" in North Dakota is rising.

The number of taxpayers reporting adjusted gross income of more than $1 million in North Dakota rose from 266 in 2005 to 388 in 2006, Strombeck said. The 2007 numbers won't be known until October, she said.

*Incomes on the upswing*
Bruce Gjovig, director of the University of North Dakota's Center for Innovation, said his informal survey estimates the number of new millionaires in Mountrail County, one of the biggest drilling areas of the Bakken, may be as many as 2,000 - or nearly a third of the county's population - in the next three to five years.

North Dakota's per capita income in 2007 was $36,846, ranking the state 30th in the nation and up from 42nd in 1997, said Richard Rathge, the state Data Center director and North Dakota demographer.

"The two main drivers are energy and agriculture income," Rathge said. The increasing wealth in the state from oil should push the average annual wage in North Dakota, he said.

The oil boom has spurred several "Jed Clampett-like" tales of ordinary folks getting rich, said Tom Rolfstad, the economic development director for the city of Williston.

Rolfstad said he hasn't spotted any Ferraris or Rolls Royces in town, though several people can afford them now.

"I'm seeing a lot more big, shiny gas-guzzling pickups," he said.

*Staying true to their roots*
Several homes that cost more than a million dollars also are being built in Williston, he said. The community of about 12,500 people is perhaps best known as the hometown of NBA coach Phil Jackson.

Most people "don't want people to know how much money they got and they don't want to be tagged with being wealthy - they want to be themselves," Rolfstad said.

Oscar and Lorene Stohler said their newly found wealth hasn't changed them.

"We still know what tough times are," Oscar said. "We grew up in the Dirty '30s."

"We put our kids through college without that oil money," Lorene said.

The couple moved a few miles east to Beulah and paid cash for their new home, the first one they have owned. They have established trust accounts for their four children.

Lorene said the only thriftless purchase was an automatic sprinkler system for her flowers that surround the couple's new home. And Oscar bought a $1,000 ring for his wife to celebrate their 60th wedding anniversary.

"We got enough now to buy new stuff," Lorene said, "but we like our old stuff."


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## Murdock1960 (Mar 7, 2005)

Was taking a beak from laying down pipe,sitting in the doghouse.In walk the company hand with two couples and a couple of kids wearing orange hard hats.He -company hand told me these people were the landowners.This was in Williams county in ND.They had cam coorders and were taking alot of pictures-plus had big smiles on their face;s all the time they were there.Lucky-SOB's-But good for them!!!


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## buckseye (Dec 8, 2003)

geeze murdock I can't believe your back roughnekkin :beer:

I'm glad you have this opportunity to make some good money, the state wants local ND residents to take advantage of this even if it means switching jobs. The state would like to see these jobs go to residents rather than a bunch of migrant workers.

Good Luck and don't get worm bites.... :lol:


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## HonkerExpress (Sep 23, 2005)

Then how is it that gas prices are at 4 dollars a gallon if we can pump the chit out of our own back yard. RIDICULOUS.

On a side note, thats awesome the ol' timer is cashing in.


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## MSG Rude (Oct 6, 2003)

HonkerExpress said:


> Then how is it that gas prices are at 4 dollars a gallon if we can pump the chit out of our own back yard. RIDICULOUS.


You don't pump straight 89 out of the ground. It has to be refined. As you know. This has been a topic here for many years and many times over.

That is why we not only need to drill in more places (easy boys but here it goes...screw the baby seal..drill'er deep 'n' fast!), and get more refineries going NOW and not keep hearing, "It will take 10 years blah blah blah". If we had done this 10 years ago (how long ago were we ((I)) in the gulf war?) then we would not be bent over the oil barrel like we are now!


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## dblkluk (Oct 3, 2002)

> Then how is it that gas prices are at 4 dollars a gallon if we can pump the chit out of our own back yard. RIDICULOUS.


The real question is, how high would gas be if we weren't drilling in our back yard??

I will admit you can really see the oil $$ making a difference out here.

Now add to that the crops are looking great..

Times aren't too bad in Central-Western Nodak..


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## Leo Porcello (Jul 10, 2003)

MSG Rude said:


> That is why we not only need to drill in more places (easy boys but here it goes...screw the baby seal..drill'er deep 'n' fast!), and get more refineries going NOW and not keep hearing, "It will take 10 years blah blah blah". If we had done this 10 years ago (how long ago were we ((I)) in the gulf war?) then we would not be bent over the oil barrel like we are now!


AMEN!!!!!!!!!


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## HonkerExpress (Sep 23, 2005)

really? its not getting pumped straight out of the ground and hauled into cenex to go directly into my tank? Wow, I guess I learn something new everyday.

I realize its crude oil, hence the name oil as in comparision to "fuel" I see the difference, just don't realize why north dakota is so high in gas as in comparison to states that don't have active oil derricks.

Just askin.


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## dblkluk (Oct 3, 2002)

Lack of refineries.


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## HonkerExpress (Sep 23, 2005)

cause it makes so much more sense to haul it across the country to be refined instead of doing right here in good ol nodak. Thats what I don't understand.


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## MSG Rude (Oct 6, 2003)

HonkerExpress said:


> cause it makes so much more sense to haul it across the country to be refined instead of doing right here in good ol nodak. Thats what I don't understand.


Like dblkluk said, lack of refineries. If we had more refineries here in NoDak it MIGHT be cheaper but we do not...hence my earlier statement...we NEED more refineries...NOW.

Also, is the sarcasim really needed....? You asked a question, I explained my answer.


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## buckseye (Dec 8, 2003)

there are many by-products of crude oil some of which I'm glad they let someone else have in their state. generaly speaking it makes more sense to produce gas where it will be consumed than way out here


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## cgreeny (Apr 21, 2004)

Biggest thing we need is the cnogress or president to slap back at the EPA first for the absurd restrictions it puts on the nations refineries. And I completely agree we should explore the ocean floor where they know the oil is and bump the tree huggin politicians out of the way. they keep crying out the BIG OIL already has (80%)? of the federal leases leased up why cant they find it there. Its called exploration not a game of drill it and it will bubble up. If you knew it was where you were not allowed to drill you would keep askin to be let in???? Crazy world.


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## h2ofwlr (Feb 6, 2004)

guys, look at Canada. They are exporters of oil, and they are paying approx 25% more for gas than we are. Namely it is their huge tax on the gas is why it costs 25% more than here is the States.

But the point is that they switched to "global marketing" of setting the bench marks for the crude oil. So they are paying dearly for it too although they export much of it to the States.

But then again not everyone is global economy based. Look at Venezuela, their pricel is 12 cents a gal. yes 12 cents! It is Govt control and they are an exporter of oil, so the export fees reduce thier domestic cost per gal. Most oil reserves are Govt controlled--not at all owned by the oil compnaies.

So it is the 'global based market" that sets the prices of crude. For each $1 per barrel of crude that + 2.5 cents at teh pump. So 140 x 2.5 =$3.50 a gal, and then add your refining, delivery and retail mark up and local taxes too. It is generally another 50 to 75 per gal of gas. So be looking for 4.00-4.25 a gal in Aug.

But much of the run up in price is due to speculators dringoing up the price as THERE IS NO SHORTAGE OF OIL AT ALL. This per a month ago by the Suadi and Iraqi oil ministers. So blame the profiteers of the big pension and investment funds of driving up the prices. The OIL COMPANIES DO NOT SET OIL PRICES, it is the investment community on the trading of oil futures that set the crude oil prices. Crack down on their profiteering and the oil prices will drop to 60-70 a barell.
*
If you do not like paying the high gas prices--***** to your congressmen and 2 US Senators to overhaul how the futures market opperates.*


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## nickle ditch (Aug 26, 2002)

There are tanker trucks loaded with Canadian gasoline, driving past my house everyday. They're heading to nodak where the gas will be sold cheaper then up here where it was pumped and refined. :x


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## Skip OK (Jul 16, 2006)

H2Ofowler,

While I understand that the "Speculators cause the high oil price" is really fashionable right now, particularly among the "we'll do anything to stop oil production" set, it is begining to be debunked.

Robert Samuelson, of the Washington Post Writers Group (hardly a "drill at all costs" organization) pointed out in an editorial today, at least today in my local paper, that while several publicly traded commodities' prices have risen sharply in the last 18 months or so (oil up 170%, corn up 64%, copper up 360%, another food stock I can't remember up 108%), during the same time period, steel (which is not a publicly traded commodity) is up 110%; in other words, there is little, if any, difference between price increases in commodities due to investment speculation vs those withoiut that added pressure.

He goes on to cite some of the benefits of futures contracts in reducing future market uncertainty (he used a corn farmer "locking in" his corn sales price, and an airline doing the same for its fuel purchase price).

If not the nefarious schemes of dastardly futures traders, what IS driving the higher prices, you ask? Samuelson answered that with "supply and demand" he points out that while US demand is flat to declining Asian demand, even outside China and India is growing at about 4% per annum, and has done so for the last ten years.

While demand is growing, supply has not been keeping up. Non OPEC producers in Europe, Mexico and elsewhere are seeing production declines.

Political unrest in South America, Africa, and the Mid east call into question the reliability of that source of supply.

In OPEC, Venezuela and Indonesia are mere shadows of the petroleum giants they once were (although a big part of Venezuela's problem is Mr. Chavez penchant for politically friendly but technically inept managers for Petroven.

Russia has shown itself to be a totaly reliable supplier; that is until they don't to be anymore.

By 2030, the EIA estimates that world demand will be 150% of the current levels. I don't believe the world productive capacity will be able to absorb that much increase; UNLESS we start increasing supply right away.


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## cgreeny (Apr 21, 2004)

Nickle Ditch, I hear you there, I see many of the same trucks heading down Hwy 52 from SK. lots of trucks here heading the same direction.


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## buckseye (Dec 8, 2003)

> If not the nefarious schemes of dastardly futures traders, what IS driving the higher prices, you ask? Samuelson answered that with "supply and demand" he points out that while US demand is flat to declining Asian demand, even outside China and India is growing at about 4% per annum, and has done so for the last ten years.
> 
> While demand is growing, supply has not been keeping up. Non OPEC producers in Europe, Mexico and elsewhere are seeing production declines.
> 
> ...


If thats not all speculation terminology I'm a duck!


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## cwoparson (Aug 23, 2007)

> They're heading to nodak where the gas will be sold cheaper then up here where it was pumped and refined.


That is incorrect. The cost and margins for gasoline is almost identical throughout the world. The difference between cost at the pump for Canada and the US is taxes added at the pump. 32% for Canada and 12% in the US. Still that's better than the UK where the tax is 126% but not as good as Mexico where the gas is subsidized and costs about half what you and I pay.


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## Skip OK (Jul 16, 2006)

Buckseye,

I am not trying to defend speculation in the slightest.

I am trying to point out that many of those who cite speculation as the sole cause of high prices are doing so with their eyes closed, their fingers in their ears and screaming "nanana" in what will undoubtedly be futile effort to ignore the fact that demand is growing faster than supply.

I know that some people "believe" they have a fundamental right to unlimited fuel at low prices, and ANY disruption of that condition must be the fault of somebody.

I also know that some other people "believe" they are the handsomest men on Earth and the only reason they can't get a date is that women are afraid they just couldn't resist the guys.

Both of these beliefs are equally right (not at all).

Fact is, that a big part of the increase in oil price (and corn and copper and steel) is that demand for these commodities is outstripping supply.

Another fact is that developing new sources for these products,while in our best interests, is not done over-night. We need to plan many years ahead to ensure adequate supplies.

Another fact is that on a National level, the country has steadfastly refused to do so for about 25-30 years. This obstinate lack of foresight is costing us right now and will continue to cost us for years to come.

We NEED the extra production from places like the Bakken, and the Barnett Shale in Texas and the Haynesville Shale in LA, and the Woodford shale in OK, and on and on. These are NOT traditional oil/gas plays; it takes something a little extra to make them work, but they are each a piece of the puzzle.

So are other unconventional resource plays, like Coal Bed Methane, or Tar Sands or Oil Shales. So are older partly depleted conventional plays such as Enhanced Oil Recovery Projects, simple conventional primary production, and infill drilling in established fields.

So is the search for oil and gas in areas that are currently off limits to exploration; places like ANWR and the Eastern Gulf of Mexico. A recent BLM study stated that 60% of the remaining O&G to be found in the USA is in areas that are closed to exploration, and another 32% is to be found in polaces that are off limits for some part of the year.

All of these different pieces need to be on the table; at the VERY LEAST for exploration.

If ANWR or the Eastern GOM proves to be a bust; take it off the table. If it proves to be better than expected, though the debate should be on. Which is why so many people are willing to do almost anything to prevent us from finding out.


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## nickle ditch (Aug 26, 2002)

cwoparson said:


> > They're heading to nodak where the gas will be sold cheaper then up here where it was pumped and refined.
> 
> 
> That is incorrect. The cost and margins for gasoline is almost identical throughout the world. The difference between cost at the pump for Canada and the US is taxes added at the pump. 32% for Canada and 12% in the US. Still that's better than the UK where the tax is 126% but not as good as Mexico where the gas is subsidized and costs about half what you and I pay.


 I know why it's more expensive. I was just commenting on the fact that i can drive down across the border and fill up with Saskatchewan fuel cheaper then in Saskatchewan.


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