Second opinion on North Dakota revenues sees higher oil prices, lower production
BISMARCK — North Dakota lawmakers received a second opinion on revenue projections Tuesday, March 12, that included rosier oil prices but lower production figures for the upcoming two-year budget cycle than one presented by the state's executive branch Monday.
The estimates from IHS Markit, a firm lawmakers hired after previous revenue projections missed the mark, came a couple of days before legislative appropriators are expected to adopt a revenue forecast to guide their budgeting decisions on Thursday.
IHS said oil prices would drop from $61 to $58 per barrel next biennium using the West Texas Intermediate benchmark. Under current market conditions, a discount of $5 to $6 is used to determine the North Dakota oil price, said North Dakota Pipeline Authority Director Justin Kringstad.
Monday's forecast from OMB used North Dakota oil prices of $49.50 and $49 in 2019-21. It also said production would rise from 1.4 to 1.44 million barrels per day, while IHS said it would drop from 1.4 to 1.3 million barrels per day.
The new IHS forecast predicted general fund revenues through sales, income and motor vehicle taxes would be 7.5 percent lower than Monday's executive branch forecast.
Gov. Doug Burgum, a Republican, praised Monday's forecast as "reliable, reasonable and conservative." Top Republican lawmakers, however, expressed caution about the figures and wanted to hear from their own prognosticators Tuesday.