This article from American Spectator reads more like a travel brochure or a puff piece from the North Dakota Chamber of Commerce, but there are nuggets of buried in it. Let’s take a look.

First off, it is a puff piece!  It was written by John Hoeven who just happens to be the senior Senator from North Dakota. Prior to that he was governor of the state. He is, in a word, North Dakota’s premier cheerleader.

But he has a lot to cheer about. North Dakota’s miracle has been documented by me and many others, including The New York Times. At bottom it is the remarkable confluence of opportunity and capital in a free market that has set the state ablaze with energy production records. Hoeven thinks a lot of it has to do with the state government.

First, the state has a plan:

In fact, there’s a path to follow, one that North Dakota blazed over the last decade by building a comprehensive energy plan we called Empower North Dakota. We worked to create a business environment that encouraged energy companies across all industry sectors to invest in our state. We created the kind of legal, tax, and regulatory certainty that attracted capital, expertise, and jobs.

Since government is a given in this world, knowing its limits and establishing its certainty helps entrepreneurs make plans.

Hoeven overstates the case, however:

Just 10 years ago, oil companies had left or were leaving our state’s oil patch, the Bakken formation, for a host of reasons: inadequate technology, an aging workforce, lack of transportation infrastructure, and insufficient data about our oil reserves. Industry leaders decided they had better places to invest shareholder dollars and earn a return.

But North Dakotans decided to turn this situation around.

Suuuure they did. My reading of the North Dakota miracle is that entrepreneurs took advantage of the new technology first, and began making investments into Bakken which started generating revenues for the state which it then used to provide the infrastructure. Hoeven got it backwards.

But at least the state government stayed out of the way:

These steps improved the business environment and drew new technologies and billions of dollars of investment capital to the Williston Basin, which unleashed the potential of North Dakota’s oil patch.

It was private industry that put North Dakota back on the map, not the state. The state was an enabler to the extent that it stayed out of the way and made the path to development as simple, easy and inexpensive as possible. The results?

2006, we have surpassed Alaska, Oklahoma, Louisiana, and California in oil production to become the second largest oil-producing state in the nation, trailing only Texas. In 2012, North Dakota produced more than 245 million barrels of oil and provided nearly 11 percent of all U.S. output.

He finally admits the reality:

Notably, North Dakota’s policies weren’t about government spending for its own sake. They were about creating an environment for private investment. That approach generated revenues for the state, broadened the economic base, and actually enabled us to reduce taxes several times over the past decade.

Hoeven is a politician first and foremost and this article is his attempt to run around in front of the North Dakota miracle and pretend that he’s leading it. But the point is made: governments help the most when they interfere the least.

 

 

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