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Published September 27, 2011, 02:44 PM

A foot in both camps

TIOGA, N.D. — Kathy Neset moved to North Dakota 32 years ago because of oil. She’s still here because of oil, farming and family.

By: Jonathan Knutson, Agweek

TIOGA, N.D. — Kathy Neset moved to North Dakota 32 years ago because of oil. She’s still here because of oil, farming and family.

“I came to North Dakota, fell in love and stayed,” says Neset, a geologist who married a farmer.

In a state where oil and agriculture sometimes struggle to coexist, Neset — who has seen both ag and oil at their best and worst — has a balanced perspective.

If reconciling the interests of oil and agriculture is a problem, then “it’s a great problem to have,” she says. “I’m a firm believer that it beats starving to death.”

Kathy and her sons, R.C. and Randy, raise durum and flax on the family farm near Tioga. Kathy’s late husband, Roy, was both a farmer and drilling supervisor.

Kathy, R.C. and Randy, as well as Katie Neset, R.C.’s wife, also are active in Neset Consulting Service, which provides wellsite services. The family company has 20 employees in its Tioga, N.D., office and shop and about 160 independent contractors in the field.

Tioga, population about 1,250, bills itself as “Oil Capital of North Dakota.”

How do the Nesets manage both the farm and oil business, especially during harvest?

“Right now, it’s pretty long days. It’s a lot,” Kathy Neset says. “But the way I look at it, even though farming went through some really difficult times in the ’80s and ’90s — so did the oil fields — we were, between the two of them, able to eke out a living. It was survival mode. Even though it came close, we were able to hang on to both oil and farming.”

Need to work together

Neset speaks to groups across the state about the oil industry. This past winter, for instance, she spoke to a packed room of agriculturalists at a North Dakota State University Extension Service conference in Devils Lake, N.D.

“I know both farming and oil. I’ve lived both,” Neset says.

Her thoughts on how agriculture and oil can get along in North Dakota?

“I think it is very important for farmers and ranchers and oilmen to work together,” she says. “Those closest to the land — namely these three entities — are the best stewards of the land. And the best way to facilitate working together is through education on both sides.”

Neset says she appreciates the work of groups such as the Northwest Landowners Association, which informs, supports and promotes property rights issues to landowners and residents of northwestern North Dakota.

“We need agriculture. We need oil. We need to keep working towards common ground,” she says.

“It’s all about education. It’s educating the farmers to what the oil field is and also the oil industry to what our farming concerns are,” she says.

What about those who say the oil industry is changing North Dakota’s landscape?

“You go out there and say, ‘Oh, my goodness. My beautiful North Dakota has changed.’ I get that. But I bet our pioneers felt the same way when they saw the roads being built or the railroads carving across the land or the electric poles being put up,” she says.

Further, developing the state’s oil industry is contributing to national security, she says.

A one-two punch

Williams County, in which Tioga is located, ranked fifth among North Dakota counties in oil production last year, according to information from the North Dakota State Data Center.

Oil production in Williams County has soared in the past year. The county produced 925,000 barrels of oil in September 2010 and reached 1.6 million barrels this July, the most recent month for which statistics are available, according to the North Dakota Department of Mineral Resources.

Roads in the Tioga area reflect the growth. Many are beat up from frequent use by heavy equipment and vehicles associated with the oil industry.

“Be careful on the roads. They’re in bad shape,” Kathy Neset advises a visitor.

But even though oil’s importance is growing in Williams County, agriculture remains vital in the country, which ranks fourth in North Dakota in the amount of land in farms.

Williams led the state last year in durum and lentil production and ranked fourth in dry edible beans and fifth in barley, according to the National Agricultural Statistics Service, an arm of the U.S. Department of Agriculture.

Williams County grows flax, too, ranking 26th in the state last year.

It’s common in the Tioga area to see working oil wells on what recently had been farmland. The land being tapped for oil will be restored eventually.

Here’s how the process works, Neset says.

“After the drilling, the site is cleaned and put on production. Then — after the well is plugged and permanently abandoned, perhaps 20 to 40 years later — the site is fully restored to the original topography of the land with native grasses seeded and roads/access removed. Eventually, no remnants of the drilling activity are evident,” she says.

A roller-coaster ride

Kathy Neset and other veterans of North Dakota’s oil industry have seen some wild swings.

Oil production in the state shot higher in the late 1970s and early 1980s, peaking at about 53 million barrels in 1984, according to the North Dakota State Data Center.

Neset, a New Jersey native and Brown University graduate with a degree in geology, came to North Dakota in 1979 to participate in the oil boom.

“I just felt this was the place to be,” she says.

She met Roy when both working on a rig in the state.

“He was from the school of hard knocks and I’m Brown University. You know what they say about opposites,” she says with a smile.

After marrying, they launched Neset Enterprises in 1980.

The business benefitted from a few good years in the oil business. But statewide production began falling after the 1984 peak, dropping to 29 million bushels in 2003.

In those long, lean years, “we were just hanging on, hoping things would get better,” she says.

They did. North Dakota’s oil production has been rising in recent years, soaring to 110 million barrels in 2010, 32 million more than in 2009.

North Dakota is now the nation’s No. 4 oil-producing state and could surpass California for third spot by year’s end, officials say

New tech fosters boom

Credit the boom to the oil-rich Bakken shale formation, which encompasses much of northwestern North Dakota, northeastern Montana and part of southern Canada.

The formation contains oil that, in the past, was difficult, if not impossible to utilize. But high oil prices and strong demand for oil in the past few years led to the development of new technology that allows it to be tapped.

In the past few years, as technology has improved, officials have continued to increase their estimate of how much oil potentially can be recovered in North Dakota.

“This is an exciting time,” Neset says.

The booming oil patch helps make it possible for talented young persons such as her sons to remain in North Dakota, she says.

R.C. has a degree in geology, Randy a degree in petroleum engineering.

“We’re able to keep our young talent at home. We don’t need to export them to other parts of the country,” Kathy Neset says.

Better times in farming

She’s seen ups and downs in farming, too.

Roy Neset died in 2005 after being ill. That year, for the first time, the family cash-rented its farm to a neighbor. That arrangement continued for several years, while R.C. and Randy finished up their education and National Guard commitments.

In 2010, her two sons were in position to begin running the family farm, which they did.

Kathy Neset says she was highly active in farm operations once. Now, however, R.C. and Randy are in charge, though all three make decisions.

R.C. and Randy tease their mother about doing a less-than-perfect job of running the grain drill this spring.

Wearing the twin hats of farmer and oilman requires “knowing how to manage your resources,” R.C. says.

Randy shrugs when asked if, forced to choose, he would pick agriculture or oil as his life work.

“This is western North Dakota. We have both, he says.

Randy and R.C. say they’re accustomed to balancing the demands of farming and the oil industry.

“Just go back and forth, do whatever needs to be done,” R.C. says.

R.C. and Randy say they’re enjoying today’s attractive prices after having suffered poor prices in the past.

Durum is fetching about $11.50 per bushel at area elevators surveyed weekly by Agweek, about twice what it sold for a year ago and triple what it brought a decade ago.

The Nesets have combined most of their durum this year, and quality and yields are good.

The Nesets haven’t combined their flax yet. But prices for the crop are strong; it’s averaging about $13.50 per bushel at the elevators surveyed by Agweek, about $2 per bushel more than a year ago and triple what it brought a decade ago.

The Nesets say they’re committed to agriculture, even with the oil boom in western North Dakota.

“Farming is the backbone of our family. But the oil field is great. To be able to do the two of them, we’re just very fortunate,” she says.

Neset smiles at her sons and says, “I’m right where I want to be. Working with oil and agriculture, here with my two guys.”