Low oil and gas prices good news for North Dakota road budgets

JAMES MacPHERSON, Associated Press

The same slumping oil prices that forced North Dakota's Legislature to trim some state spending are stretching road construction dollars further, officials say.

BISMARCK, N.D. (AP) — The same slumping oil prices that forced North Dakota's Legislature to trim some state spending are stretching road construction dollars further, officials say.

The reason: Prices for petroleum-based asphalt are down as much as 20 percent than what had been estimated for road building this summer, transportation department spokeswoman Jane Berger said. "It's tied to oil prices," she said.

Asphalt-dependent projects are tied to a so-called surge funding bill that fast-tracked $1.1 billion for state highways and communities that have grown quickly. The record one-time spending bill was rushed through the House and Senate and signed by Gov. Jack Dalrymple in February so infrastructure projects could begin by summer.

The bulk of the money is being spent in in western North Dakota's oil-producing region, which has been overwhelmed with spending needs on roads, utilities, housing and schools. The total sum includes $450 million for state highway projects there, where traffic has increased 71 percent since 2010, data show.

The DOT already has approved funding for about 30 state highway, bridge and other projects that total $300 million, Berger said. The total project costs are coming in about 6 percent less than forecast, due largely from lower asphalt prices, she said. The remaining $150 million, which represents 10 additional projects, should be awarded by month's end, she said.

Bidding competition and plentiful contractors in the state also have contributed to lower-than-estimated project costs, officials said.

Williston mayor Howard Klug said the surge funding amounts to about $62 million for his city. And many of the bids coming in for the projects in and around his city are running 30 percent below earlier estimates.

"That allows us to do some other projects," the mayor said.

Watford City Mayor Brent Sanford, whose city is near the epicenter of the oil patch in McKenzie County, said the surge funding amounts to about $32 million for his city. The paving of one county road has come in $10 million less than what was forecast, he said.

"We're getting lots of bids, it's very competitive," Sanford said, adding that more projects may be done with the savings.

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