New economic study shows impact of lignite industry on North Dakota 

(3/28/08)

The lignite industry has been one of the state’s brightest economic stars for the past 30 years. In its annual economic survey recently completed by the North Dakota State University (NDSU) Department of Agribusiness and Applied Economics, the lignite industry continues to shine with its jobs, its high wages and its taxable income to the state.

Larry Leistritz, an NDSU professor who conducts the study, said the lignite industry showed significant gains both in expenditures and in taxes – two of the measurements used to judge the impact the industry has on the state.

“Expenditures from firms involved in lignite-related activities generated total business volume activity over $2.4 billion in 2007 and projections show an increase to nearly $2.8 billion in 2008,” Leistritz said. Part of the reason for the higher expenditures is higher cost for diesel fuel – a commodity needed by mining companies in their mining and reclamation activities.

The $2.4 billion gross business volume expended in 2007 is up sharply from 2006 when actual gross business volume reached nearly $2 billion.

Another indication of the impact of the industry on the state is state tax revenue resulting from companies involved in lignite-related activities. In 2006, estimated tax revenues were less than 80 million. In 2008, estimated tax revenues should soar to about $103 million.

The lignite industry is also a large employer with approximately 4,000 direct employees in 2008 and another 24,000 secondary employees, such as those who work for contractors and suppliers to the mines and plants.

Here are some other significant findings from this year’s report: