[Senate Hearing 111-734]
[From the U.S. Government Publishing Office]



                                                        S. Hrg. 111-734
 
                    FIELD HEARINGS FISCAL YEAR 2011

=======================================================================

                                HEARINGS

                               before the

                        COMMITTEE ON THE BUDGET
                          UNITED STATES SENATE

                     ONE HUNDRED ELEVENTH CONGRESS

                             SECOND SESSION

                               ----------                              


  June 1, 2010-THE ENERGY INDUSTRY'S IMPACT ON HOUSING IN NORTH DAKOTA

June 1, 2010-INFRASTRUCTURE INVESTMENTS: PROMOTING ECONOMIC GROWTH AND 
               IMPROVING SAFETY ALONG THE US 85 CORRIDOR

July 8, 2010-TRANSPORTATION INVESTMENTS: PROMOTING ECONOMIC GROWTH AND 
                    IMPROVING SAFETY ALONG THE ND 23
  July 8, 2010-DEVILS LAKE FLOODING DISASTER: HOW SHOULD THE FEDERAL 
                          GOVERNMENT RESPOND?
  July 9, 2010-TRANSPORTATION INVESTMENTS: PROMOTING ECONOMIC GROWTH 
                  ALONG THE US 52 AND US 281 CORRIDORS
  July 9, 2010-DEVILS LAKE FLOODING DISASTER: A DOWNSTREAM PERSPECTIVE
   August 16, 2010-DEVILS LAKE FLOODING DISASTER: A RED RIVER VALLEY 
                              PERSPECTIVE
 August 17, 2010-DEVILS LAKE FLOODING DISASTER: HOW SHOULD DOWNSTREAM 
                         IMPACTS BE ADDRESSED?
   August 18, 2010-TRANSPORTATION INFRASTRUCTURE'S ROLE IN ECONOMIC 
                             GROWTH: ND-13
               August 27, 2010-STUMP LAKE FLOODING ISSUES
                 October 11, 2010-THE NEXT FARM BILL

                                     
                                     

           Printed for the use of the Senate Budget Committee

                    FIELD HEARINGS FISCAL YEAR 2011



 
                                                        S. Hrg. 111-734

                    FIELD HEARINGS FISCAL YEAR 2011

=======================================================================

                                HEARINGS

                               before the

                        COMMITTEE ON THE BUDGET
                          UNITED STATES SENATE

                     ONE HUNDRED ELEVENTH CONGRESS

                             SECOND SESSION

                               __________

  June 1, 2010-THE ENERGY INDUSTRY'S IMPACT ON HOUSING IN NORTH DAKOTA

June 1, 2010-INFRASTRUCTURE INVESTMENTS: PROMOTING ECONOMIC GROWTH AND 
               IMPROVING SAFETY ALONG THE US 85 CORRIDOR

July 8, 2010-TRANSPORTATION INVESTMENTS: PROMOTING ECONOMIC GROWTH AND 
                    IMPROVING SAFETY ALONG THE ND 23
  July 8, 2010-DEVILS LAKE FLOODING DISASTER: HOW SHOULD THE FEDERAL 
                          GOVERNMENT RESPOND?
  July 9, 2010-TRANSPORTATION INVESTMENTS: PROMOTING ECONOMIC GROWTH 
                  ALONG THE US 52 AND US 281 CORRIDORS
  July 9, 2010-DEVILS LAKE FLOODING DISASTER: A DOWNSTREAM PERSPECTIVE
   August 16, 2010-DEVILS LAKE FLOODING DISASTER: A RED RIVER VALLEY 
                              PERSPECTIVE
 August 17, 2010-DEVILS LAKE FLOODING DISASTER: HOW SHOULD DOWNSTREAM 
                         IMPACTS BE ADDRESSED?
   August 18, 2010-TRANSPORTATION INFRASTRUCTURE'S ROLE IN ECONOMIC 
                             GROWTH: ND-13
               August 27, 2010-STUMP LAKE FLOODING ISSUES
                  October 11, 2010-THE NEXT FARM BILL

                                     
                                     

                  U.S. GOVERNMENT PRINTING OFFICE
58-154                    WASHINGTON : 2011
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                        COMMITTEE ON THE BUDGET

                  KENT CONRAD, NORTH DAKOTA, CHAIRMAN

PATTY MURRAY, WASHINGTON             JUDD GREGG, NEW HAMPSHIRE
RON WYDEN, OREGON                    CHARLES E. GRASSLEY, IOWA
RUSSELL D. FEINGOLD, WISCONSIN       MICHAEL ENZI, WYOMING
BILL NELSON, FLORIDA                 JEFF SESSIONS, ALABAMA
DEBBIE STABENOW, MICHIGAN            JIM BUNNING, KENTUCKY
BENJAMIN CARDIN, MARYLAND            MIKE CRAPO, IDAHO
BERNARD SANDERS, VERMONT             JOHN ENSIGN, NEVEDA
SHELDON WHITEHOUSE, RHODE ISLAND     JOHN CORNYN, TEXAS
MARK WARNER, VIRGINIA                LINDSEY O. GRAHAM, SOUTH CAROLINA
JEFF MERKLEY, OREGON                 LAMAR ALEXANDER, TENNESSEE
MARK BEGICH, ALASKA
CARTE GOODWIN, WEST VIRGINIA


                Mary Ann Naylor, Majority Staff Director

              Cheryl Janas Reidy, Minority Staff Director

                                  (ii)


                            C O N T E N T S

                               __________

                                HEARINGS

                                                                   Page
June 1, 2010-The Energy Industry's Impact on Housing in North 
  Dakota.........................................................     1
June 1, 2010-Infrastructure Investments: Promoting Economic 
  Growth and Improving Safety Along the US 85 Corridor...........    57
July 8, 2010-Transportation Investments: Promoting Economic 
  Growth and Improving Safety Along North Dakota 23..............   119
July 8, 2010-Devils Lake Flooding Disaster: How Should the 
  Federal Government Respond?....................................   201
July 9, 2010-Transportation Investments: Promoting Economic 
  Growth Along the US 52 and US 281 Corridors....................   265
July 9, 2010-Devils Lake Flooding Disaster: A Downstream 
  Perspective....................................................   311
August 16, 2010-Devils Lake Flooding Disaster: A Red River Valley 
  Perspective....................................................   423
August 17, 2010-Devils Lake Flooding Disaster: How Should 
  Downstream Impacts Be Addressed?...............................   477
August 18, 2010-Transportation Infrastructure's Role in Economic 
  Growth: North Dakota 13........................................   523
August 24, 2010-Transportation Infrastructure's Role in Economic 
  Growth: US 12 and US 85........................................   557
August 27, 2010-Stump Lake Flooding Issues.......................   591
October 11, 2010-Writing the Next Farm Bill......................   639

                    STATEMENTS BY COMMITTEE MEMBERS

Chairman Conrad......1, 57, 119, 201, 265, 311, 423, 477, 523, 557, 639

                               WITNESSES

Scott Backes, North Dakota Farmer, Glenburn, ND................542, 544
Joe Belford, Commissioner, Ramsey County.......................651, 652
Richard Betting, Secretary, People to Save the Sheyenne........347, 350
Ryon Boen, Insurance Agent, Western Agency, Minot, North Dakota..   687
John Boyd, Operations Manager, EOG Resources.....................37, 39
Becky Braaten, Insurance Agent, Farm Credit Farm Services of 
  North Dakota, Westhope, North Dakota...........................   686
Steve Burian, Chief Executive Officer, Advanced Engineering and 
  Environmental Service, Inc. AE2S.............................458, 463
Robert Carlson, President, North Dakota Farmers Union, Jamestown, 
  North Dakota.................................................646, 649
Ross Cole, Mayor, City of Lisbon.....................342, 343, 495, 498
Rich Davis, Acting Deputy Administration for Single-family 
  Housing, USDA Rural Development................................10, 13
Steve Edwardson, Executive Administrator, North Dakota Barley 
  Council, Fargo, North Dakota.................................653, 656
Bruce Erickson, Operations Manager, Rugged West Trucking, North 
  Dakota.........................................................   114
Odell Flaagen, Chairman, Nelson County Water Resource District.615, 617
Jeff Frith, Board Manager, Devils Lake Basin Joint Water Resource 
  Board..........................................................   256
Don Frye, Mayor, City of Carrington............................291, 293
Del Gates, Director, US Durum Growers Association, and Director, 
  North Dakota Crop Improvement and Seed Association, Mohall, 
  North Dakota...................................................   683
J.R. Gibbons, Board of Directors, Towner County Economic 
  Development Corporation......................................297, 299
L. David Glatt, Chief, Environmental Health Section, North Dakota 
  Department of Health...............................327, 330, 433, 435
John Hoeven, Governor, State of North Dakota.........205, 321, 429, 483
Mark Hovland, General Manager, Fressenden COOP Association.....294, 296
Mike Hynek, Mayor Stanley, North Dakota..........................20, 23
Dave Irmen, North American Bison Cooperative...................299, 302
Lyn James, Mayor of Bowman, North Dakota...............25, 28, 574, 576
Richard Johnson, Mayor, City of Minnewaukan....................242, 245
Steve Kelly, President, Trustland Oilfield Services............170, 176
Cal Klewin, Executive Director, Theodore Roosevelt Expressway 
  Association..................................................578, 582
Ward Koeser, Mayor of Williston, North Dakota....................15, 18
Marcus Levings, Chairman, Mandan, Hidatsa, Arikara Nation......144, 148
Rich Mattern, Mayor, City of West Fargo..........................   436
Trish McQuoid, Mayor, City of Minnewauken......................249, 251
Matt Miles, Principal, Leadership Circle, LLP....................41, 42
Larry Neubauer, President, US Durum Growers Association, 
  Bottineau, North Dakota......................................661, 664
Jeff Oberholtzer, Director, National Sunflower Association, 
  Mohall, North Dakota.........................................667, 670
David O'Connell, North Dakota Senator, Lansford, North Dakota....   682
Neil Olerud, Chairman, Ransom County Commission..................   509
Kenton Onstad, District 4 Representative, North Dakota House of 
  Representatives..............................................164, 167
Myra Pearson, Chairwoman, Spirit Lake Nation.....................   247
Ryan Pederson, President, Northern Canola Growers Association, 
  Vice President, US Canola Association, Rolette, North Dakota.672, 675
Kent Pelton, Mayor, City of Watford, North Dakota................87, 90
Pat Pithey, Merchant Manager, Cargill..........................547, 548
Earl Pomeroy, US Representative from North Dakota..5, 65, 125, 272, 319
Todd Sando, Acting State Engineer, Sta208, 217, 324, 486, 493, 600, 607
Morrie Saxerud, Former Mayor, City of Lisbon...................512, 514
Cynthia Schwehr, Commissioner, Barnes County...................344, 346
Jim Sturdevant, Mayor, City of Wahpeton........................539, 541
Dan Sullivan, Director of Policy for Multi-family Development, US 
  Department of Housing and Urban Development....................  7, 9
James Thernes, Mayor of the City of Ransom.....................500, 505
Jessica Thomasson, Director of LSS Housing, Inc., Luther Social 
  Services of North Dakota.......................................43, 47
Daniel Uran, Mayor, City of New Town...........................152, 155
Darrell Vanyo, Chairman Cass County Commission.................450, 453
Ben Varnson, Chairman, Nelson County Water Resource District...618, 620
Gene Veeder, Executive Director, McKenzie County Job Development 
  Authority, North Dakota.......................................97, 101
Dennis Walaker, Mayor, City of Fargo...........................438, 441
Bob Werkhoven, Mayor, City of Valley City......................331, 334
Sharon Young, Emergency Manager, Nelson County.................626, 629
Francis Ziegler, P.E., Director, North Dakota Department of 
  Transportatio67, 72, 127, 133, 228, 231, 274, 281, 529, 534, 562, 568


 FIELD HEARING: THE ENERGY INDUSTRY'S IMPACT ON HOUSING IN NORTH DAKOTA

                              ----------                              


                         TUESDAY, JUNE 1, 2010


                                       U.S. Senate,
                                    Committee on the Budget
                                            Williston, North Dakota
    The Committee met, pursuant to notice, at 12:53 p.m., 
Williston Community Library, 1302 Davidson Drive, Williston, 
North Dakota 58801, Hon. Kent Conrad, Chairman of the 
Committee, presiding.
    Present: Senator Conrad
    [presiding].


            OPENING STATEMENT OF SENATOR KENT CONRAD

    The Chairman. The hearing will come to order.
    I want to welcome everyone to this hearing of the Senate 
Budget Committee. This is an official hearing of the committee, 
so we will be operating under the rules of the U.S. Senate, and 
an official record of this hearing is being kept.
    The title of this hearing is ``The Energy's--Energy 
Industry's Impact on Housing in North Dakota.'' Perhaps a 
better title would be ``The Energy Industry's Need for Housing 
in North Dakota.'' That might better suit what we're actually 
faced with here.
    I want to begin by welcoming our distinguished witnesses 
today. We will have three panels. Our first panel will include 
two Federal officials: Dan Sullivan, the director of policy for 
multifamily development at the U.S. Department of Housing and 
Urban Development; and Rich Davis, the acting deputy 
administrator for single family housing at USDA Rural 
Development.
    Welcome to North Dakota. Delighted that you're here.
    After providing their introductory remarks, Director 
Sullivan and Administrator Davis will stay with us throughout 
the hearing so they can learn more about the challenge of 
housing that is confronting us, and so that we can continue our 
discussion of possible solutions in areas where our Federal 
partners can be of assistance.
    Our second panel will include our mayors: Williston Mayor 
Ward Koeser, Stanley Mayor Mike Hynek, and Bowman Mayor Lyn 
James.
    We're delighted that the three of you are with us, as well.
    Our Federal officials tell us they've been able to visit a 
number of communities on the way here, and I think they'll have 
more to say about that momentarily.
    The mayors are going to provide us with their assessment of 
housing needs in their communities.
    And our third panel will include Jessica Thomasson, the 
director of Lutheran Social Services Housing in North Dakota. I 
see that Jessica's here. We're delighted. Ms. Thomasson will 
give her perspective on the challenges of developing low- and 
moderate-income housing in this part of the State. John Boyd, 
the operations manager of EOG Resources. Mr. Boyd will describe 
EOG's efforts to provide housing for its workers in western 
North Dakota. And Matt Miles, a principal at Leadership Circle, 
LLC. Mr. Miles will explain the challenges that Leadership 
Circle is facing as one of the area's largest private real 
estate developers.
    And I think we all understand that the private sector has 
to have a key role in any housing solution for this area. We 
want to make certain that is emphasized at this hearing, as 
well, that--our private-sector partners are absolutely key to 
providing the housing opportunities that are needed in these 
communities.
    I look forward to hearing from all of you, as witnesses.
    Especially pleased that Congressman Pomeroy has been able 
to join us, as well. Congressman Pomeroy sits on the very 
powerful House Ways and Means Committee, and he is in a 
position to play a key role in energy development opportunities 
for our State. And I very much thank him for taking time from 
his busy schedule to be here to hear firsthand the challenges 
and opportunities in the Williston Basin.
    Our State has been blessed with abundant natural resources. 
The oil boom in the area brings enormous benefits to businesses 
and our families, but it also poses some significant 
challenges. One of the biggest that we face right now is a lack 
of housing for new workers that have been coming in. We have 
plenty of jobs, but not enough housing for the people who hold 
them. And I've certainly heard a lot from communities, in the 
entire northwest quadrant of our State, saying to me, ``Please 
come out and put a focus on this issue and help us address ways 
of meeting these challenges.''
    If we fail to address this challenge, it could stifle 
future growth. And the influx of people is also increasing 
demands on local infrastructure and resources, and perhaps 
driving up the cost of housing for others. We have certainly 
heard that from people on a fixed income. Our more senior 
citizens have been telling us they're increasingly concerned 
about whether or not they'll be afford--be able to afford 
housing in the future.
    The problem we're facing has been widely reported. Here is 
the Bismarck Tribune headline that ran last month, ``Not 
Jobless, Just Homeless: Temporary housing dots the landscapes 
of oil towns. Scenes like the one pictured here, with campers 
parked on school lots, can be found around the area.''

[GRAPHIC] [TIFF OMITTED] T8154.218


    Let me go to the next one.

    [GRAPHIC] [TIFF OMITTED] T8154.219
    

    The oil boom in the Bakken Formation has dramatically 
increased oil production in the State. This chart shows that 
North Dakota oil production was up to 8.6 million barrels a 
month, as of March of this year. And we are delighted by that. 
It is important to our country, as well as to our State. This 
is helping reduce our dependence on foreign oil, so it is very 
welcome, to have this new production come online.
    With further production in the Bakken and, of course, the 
discovery of the Three Forks Formation, we can expect 
production to continue to climb. That's certainly our hope. We 
also know there's considerable potential for future growth in 
North Dakota's oil industry.

[GRAPHIC] [TIFF OMITTED] T8154.220


    There are currently 118 rigs operating in the State. We 
expect that to grow to 150 by the end of the year. In total, we 
now have over 180 companies involved in oil operations in our 
State. And there are an estimated 2.6 million barrels--billion 
barrels of oil in the Bakken Formation that are recoverable, 
and perhaps as much as another 1.9 billion barrels in the Three 
Forks Formation. We need to be prepared to handle that possible 
growth.
    We've already seen significant spikes in the area's 
population.

[GRAPHIC] [TIFF OMITTED] T8154.221


    Although we don't have exact numbers, because we don't have 
the latest census, the Williston population has increased, 
we're told by local officials, by as much as 20 percent; the 
Bowman population, by perhaps 25 percent; and the Stanley 
population, we're told, by as much as 100 percent. But, we'll 
have a chance to hear directly from the mayors, on those 
questions.
    But, what are the key challenges that we face?

    [GRAPHIC] [TIFF OMITTED] T8154.222
    

    Generally, we have a lack of sufficient housing that will 
require financing, will require private developers, will 
require additional contractors and construction workers. All of 
that is good news, because that will all improve business 
activity in these communities.
    We've increased demands on emergency and essential 
services, and we've got increased strains on infrastructure. 
That's why, later today, I will be holding a hearing on--in 
Watford City--on what needs to be done with Highway 85. We've 
already held hearings in Williston and Dickinson on that 
matter, but we felt it was important to go to Watford City to 
hear from that community, as well. And I committed to that 
earlier this year, and we're fulfilling that commitment later 
today.
    So, again, our State has benefited, and will continue to 
benefit greatly, from the oil boom here. But, we need to ensure 
that we provide adequate housing for the influx of needed 
workers. And we need to make ensure our local communities are 
not adversely affected.
    Again, I welcome Congressman Pomeroy, am delighted he is 
here, and ask him to make any additional statement he'd want to 
make. And then we'll go to our first panel.
    Congressman Pomeroy.

STATEMENT OF HON. EARL POMEROY, U.S. REPRESENTATIVE FROM NORTH 
                             DAKOTA

    Mr. Pomeroy. Well, Senator Conrad, thank you very much for 
having this hearing. Thank you for allowing me to participate, 
making it a bit of a bicameral affair today.
    I was going to have meetings, both on transportation and 
housing, later in the week. It worked perfectly to simply do 
this at one shot. We are respectful to the fact that, 
especially, our local leaders are so busy we don't want to take 
them away from the task at hand for any more time than 
necessary.
    I think about the meetings we've had in this room over the 
years, Senator, where we've looked at drought, we've looked at 
bust, we've looked at any number of deep problems facing the 
efforts to continue economic activity at an adequate level in 
northwestern North Dakota. I look at leaders in this room, 
starting with Mayor Koeser and so many others, that have at 
times been seemingly handed the assignment, ``Make something 
out of nothing,'' because there wasn't a lot going on. And then 
I consider that day that we are now in, a day that--times like 
we've never seen before. And we are not entirely sure how this 
is going to play out, but we know one thing: This region and 
North Dakota will be forever changed by the oil play underway, 
and it's basically up to us to steward this thing in ways that 
make the outcome as positive, in all respects, near term and 
long term, as can possibly be achieved, knowing, again, that 
the leadership in the room is tried, tested, seasoned leaders. 
And looking at friends in the builders community, knowing--just 
trying to imagine how impossibly busy you must be, I want to 
thank you so much for participating in this discussion.
    Trying to keep up with the new reality--115,000 barrels of 
oil a day in 1907; 240--240,000 by 1909; 261,000, April--we 
know that figure's higher now--daily production levels--a 
doubling of production levels within 2 years, driven by--now 
I've got 4,665 wells. But, look at these rig counts: 81 in 
January, 93 in February, 102 in March, 107 in April, 118 and -
19 today--each rig, 40 direct jobs; potentially as many as 80 
indirect jobs. So, there's no mystery, in terms of where this 
housing shortage came from. We've got unprecedented level of 
activity, and we've got an extraordinary impact resulting from 
that activity.
    So, the only way you really can deal with a new dimension 
of activity of this character is ``all hands on deck.'' That 
means Federal Government. So, I'm very please about our--right 
out of the Washington headquarters, with two agencies 
represented today, as well as your State leadership. Thank you 
very much for the efforts you've made to be here. State--very--
see Lance Gaebe here, somewhere, the land commissioner. 
Obviously, State's going to play an important role.
    I got that right. Right?
    Voice: Soon.
    Mr. Pomeroy. Soon.
    [Laughter.]
    Mr. Pomeroy. Soon to be announced land commissioner--don't 
tell anyone.
    [Laughter.]
    Mr. Pomeroy. And city and county leadership, as well as 
nonprofits. It's going to take all of us, working together, to 
get this one seen through. So, let's get on with the fact-
gathering, Senator.
    Thank everyone and--for being here. And thanks, again, for 
including me in the hearing.
    The Chairman. Thank you.
    And we will go right to our Federal witnesses.
    And I want to emphasize that the Federal Government has a 
role to play here. But, in housing issues, the Federal 
Government is not the lead. Housing is a local matter, 
primarily. It is a private development matter, primarily. But, 
we've got to make certain that the role that the Federal 
Government does play is constructive and positive, and that 
they're not getting in the way, and, to the extent they can, 
that they are helping. And that's the reason we have asked 
these Federal officials to be with us, as they have a chance 
to, then, hear firsthand, themselves, from our local officials 
and our private development community and the faith community 
and others, the needs of these communities.
    With that, Dan Sullivan the director of policy for 
multifamily development at U.S. Department of Housing and Urban 
Development. Welcome, and please proceed.

 STATEMENT OF DAN SULLIVAN, DIRECTOR OF POLICY FOR MULTIFAMILY 
 DEVELOPMENT, U.S. DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT

    Mr. Sullivan. Thank you, Chairman Conrad and also 
Congressman Conroy, for your welcome today, to have us here to 
speak and to hear. And mostly, we're here to listen.
    I did want to make some comments, though, about HUD's 
involvement--FHA's involvement in North Dakota. I appreciated 
the opportunity to visit with--, who's director of our local 
HUD office in Fargo, North Dakota, the State office there, and 
toured around Minot last night, and then, today, through the 
northwestern part of the State, got to visit Stanley. And if 
you haven't had a chance to--for breakfast in Stanley, you're 
missing something. So, we got to see Tioga, and then toured 
around in Williston, as well, looking at various housing 
properties.
    In the last 2 years, for 2008 and 2009, HUD's involvement 
throughout North Dakota involved various programs, in the 
amount of $375 million, of Federal presence here. For example, 
HUD provides approximately $15 million a year for housing--
affordable housing choice vouchers throughout North Dakota, as 
well as for operating subsidies for public housing 
developments.
    HUD, through various block grant programs, provided, over 
the last 2 years, $60 million to local authorities and Native 
American tribes in North Dakota for--through block grants. As 
well, HUD provides, directly, $43 million per year to low-
income housing families living in project-based rental-
subsidized properties throughout the State. There are 150 such 
properties.
    And then, finally, our involvement through the Federal 
Housing Administration. It's an indirect involvement, in that 
we insure mortgages and loans for about $225 million of 
insurance--throughout the State of North Dakota. A large 
majority of that is single-family mortgage insurance, but we 
also--there are 17 FHA multifamily insured properties 
throughout North Dakota, and 10 properties that HUD directly 
funded for elderly and disabled low-income housing units, as 
Congress has appropriated funds for the section 202 and 811 
programs.
    We recognize that the strength in the energy sector has 
created a significant demand for additional housing in North 
Dakota and similar areas throughout the high plain States, as 
they've been impacted by the oil boom and energy sector. 
HUD's--FHA's mortgage insurance programs work with local real 
estate developers and FHA-approved lenders to provide, for 
instance, financing for new construction and substantial rehab 
of multifamily housing stock.
    By way of example, in Williston--here in Williston, HUD 
recently invited an application from the developer and a lender 
to use FHA multifamily mortgage insurance to provide new 
construction financing for 43 additional units. It's not clear 
whether that particular job will go forward or not. But, in our 
analysis and due diligence and investigation of the market, it 
became apparent to HUD that the occupancy levels are at 
incredibly high levels; between 98 to 100 percent occupied in 
Williston. That is to say, there are basically no vacant units 
at all. And rents have reflected that. Our preliminary review 
of the market suggested that market-rate new construction rents 
for one-, two-, and three-bedroom new properties were between 
850 and 1,000 and, for three bedrooms units, over $1200 per 
unit per month, which is dramatically higher than they were 
before--HUD.
    That, of course, has a secondary influence on affordable 
housing. It puts pressure on low-income housing and low-income 
families, as well as the usability of our voucher program. So, 
we're very concerned about that.
    And I look forward to hearing from other panelists and 
participants about ways HUD can continue to partner with State 
and local government and officials from the private sector.
    Thank you.
    [The prepared statement of Mr. Sullivan follows:]

    [GRAPHIC] [TIFF OMITTED] T8154.007
    

    The Chairman. Thank you. And again, thanks for traveling to 
North Dakota. And we're glad that you've had a little tour of 
this part of the State. I think it's very helpful to see, 
firsthand, what's happening. You know, it's moving so fast, you 
really have to come here repeatedly to see the developments 
that are occurring. You know, I've come here for many, many 
years. For 30 years, I've been coming to Williston as a public 
official. And, just in the last 18 months, I can see dramatic 
changes. Just the traffic is remarkable.
    Next, we'll turn to Rich Davis, the acting deputy 
administrator for single-family housing at USDA Rural 
Development.
    And we're also delighted that Jasper Schneider, the 
administrator for rural development in North Dakota, is with 
us. Good to have you with us, Jasper. Welcome.
    Mr. Davis. OK, thank you.
    The Chairman. Please proceed.

   STATEMENT OF RICH DAVIS, ACTING DEPUTY ADMINISTRATOR FOR 
         SINGLE-FAMILY HOUSING, USDA RURAL DEVELOPMENT

    Mr. Davis. Thank you, Chairman Conrad. And thank you for 
the opportunity--and Congressman Pomeroy--to be here today to 
speak to you about some of the USDA rural development housing 
programs.
    There may be some of you here who do not know that the 
Rural Development Commission area of USDA has the authority to 
make and insure single-family housing direct and guaranteed 
loans. The authority is provided to us by the Housing Act of 
1949. It allows us to provide financial assistance to purchase 
or build homes.
    Now there are some conditions, however, in exercising that 
authority. I'll mention a few of these. First, the homes must 
be modest in size, design, and cost. The homes must be located 
in a rural area, which in most cases are areas that are less 
than 20,000 in population. Now, I know Williston meets that 
requirement today, but at the rate at which it's growing, I'm 
not sure how much longer that's going to last.
    A few other requirements are that the applicants must meet 
certain income requirements, and I'll touch on those in a 
minute. And the applicants must be unable to secure credit 
elsewhere on reasonable terms and conditions.
    The single-family housing direct loans are limited to 
applicants whose household income is no more than 80 percent of 
the area median income. And we use the guidelines established 
by the Department of Housing and Urban Development. Now, we 
call these loans--we call these ``direct loans,'' because they 
are made directly by the Federal Government.
    I mentioned that we also guarantee loans. These loans are 
made by approved lenders for the purchase of a home. We call 
these ``guaranteed loans,'' because if the lender suffers a 
loss from making this loan, the government will cover most, if 
not all, of the lender's loss, and we guarantee it. These 
guaranteed loans--the income of the individuals or families 
receiving these loans must be less than 115 percent of the area 
median income.
    A key feature of both the direct and the guaranteed loan 
programs is that the loans can be for up to 100 percent of the 
cost or the value of the property being financed.
    Next, I'll give you an idea of what these incomes and loan 
amounts look like in North Dakota. In fiscal year 2009, in 
North Dakota, the average income of the households served 
through the single-family housing direct program was about 
$30,000. The average amount of the loan was about $99,000. Now, 
in the guaranteed program, the average income for the Single-
Family Housing Guarantee Program was quite a bit higher. It was 
around 46,000. And the average loan amount was right around 
100,000.
    At this point, I'd like to provide a little more background 
on the Single-Family Guarantee Program. It is designed to 
assist low- and moderate-income households to buy or build 
homes in rural areas. On a nationwide basis during the last 
fiscal year, the Guarantee Program provided over $16 billion. 
Some of the key features of this program are: first, as I 
mentioned, there is no downpayment required; we will provide 
100 percent financing. The loan period is 30 years. The 
interest rate is set by the lender, and it must be fixed; we do 
not allow adjustable-rate mortgages. The homes must be modest, 
decent, safe, and sanitary.
    Now our delinquency and our foreclosure rates, despite the 
fact that we're giving--providing 100 percent financing, 
compare extremely well, and are less than the industry rates. 
These loans, again, are made by private-sector lenders--
approved lenders, and are guaranteed by the Federal Government.
    In the last 3 years, Rural Development's single-family 
housing programs have been quite active in North Dakota. Our 
total involvement for all of our single-family housing programs 
is approximately $104 billion. I'll briefly mention some of 
those activities.
    We averaged over $130,000 a year in home repair loans for 
single-family homes in North Dakota. And this was through the 
Home Repair Loan Program. We also made grants, and those 
averaged about $285,000 a year for the single-family homes. And 
it's through that same Home Repair Loan Program.
    And I talked earlier about the single-family direct loans. 
In our activity in that area, we provided--we averaged about $8 
million a year, for the last 3 years. So, we totaled, in the 
last 3 years, around $24 million. But, in the Guarantee 
Program, we averaged about $27 million a year. So, the total 
there was nearly $80 million.
    I'd like to briefly mention our multifamily housing 
program. It provides financing for new construction as well as 
the rehabilitation of existing housing. In the past year, Rural 
Development's involvement in North Dakota, through the various 
multifamily housing programs, was as follows: In our 
Multifamily Direct Loan Program, we provided about $2 million 
for new construction last year. We financed about 32 apartments 
for very-low and low-income individuals.
    In our Guaranteed Rural Rental Housing Program, we also 
provided approximately $2 million for new construction and for 
the repair of existing multifamily housing.
    I just learned that we've got two projects underway in the 
Williston area--one is at the--50 units, and the other one's at 
41 units, and about to break ground soon, I believe. And the 
other's about to get started. So, excited to hear that.
    We also have another program--a Rental Assistance Program, 
in which we provide rental assistance to very-low and low-
income tenants. And last year, we provided about $4 and a half 
million in assistance there. And that served over 1200 
individuals and families in North Dakota.
    We also recognize that the boom in the oil industry in this 
region has created a housing crisis for North Dakota. Rural 
Development's housing programs and offices are ready to work 
with you and local realtors, real estate developers, and 
lenders, approved lenders, to finance new construction and/or 
the rehabilitation of single-family housing.
    Now, for some, ownership of housing may not be an option. 
In those cases, we recommend our Multifamily Housing Program, 
which can provide financing and loan guarantees to increase our 
housing portfolio for individuals and families with moderate 
incomes or less.
    That concludes my remarks. I look forward to your questions 
and comments regarding ways that USDA Rural Development can 
partner with--.
    [The prepared statement of Mr. Davis follows:]

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    The Chairman. Thank you, Rich. Thank you very much for 
that.
    We're going to handle this hearing a little bit differently 
than we typically do. We're not going to go to questions of the 
first panel, because they're going to stay with us through the 
whole hearing.
    And so, what--our intention is to go to the second panel 
immediately. Then we'll call up the third panel. We'll go to 
them. And then we'll have time for questions that would involve 
any of the participants. So, that's what we intend to do today.
    And we'll go to our second panel immediately, with our 
three mayors. And we'll start with Mayor Ward Koeser, the mayor 
of Williston. We've asked each of the mayors to give us an 
assessment of what the housing needs are in their communities, 
what's being done to address it, and what we might do, with our 
Federal partners, to improve the situation.
    Mayor Koeser, welcome.

STATEMENT OF HON. WARD KOESER, MAYOR OF WILLISTON, NORTH DAKOTA

    Mr. Koeser. Thank you, Senator Conrad, for holding this 
hearing on housing issues in Williston today.
    And thank you, Representative Pomeroy, for being here, as 
well. We sure appreciate that.
    I believe that providing adequate and affordable housing is 
the most critical issue facing our community at this time. And 
I believe that the only way we will be able to successfully 
address the challenge is by partnering with the State and 
Federal Government.
    The Williston region has been impacted by oil--by oil 
development since the 1950's. An oil boom then, followed by 
bust, was followed by an oil boom and bust in the 1980's, and 
now the oil boom we are presently experiencing. During each 
boom experience, a shortage of housing for oilfield workers has 
put tremendous stress on the city of Williston.
    Oil booms are very difficult to plan for, and their impacts 
can create lasting scars on the community. The oil boom and 
bust of the 1980's left the city of Williston with over 20 
million in special assessment deficiency debt, largely created 
when developers walked away from infrastructure projects 
financed by special assessment bonds.
    Williston's population is now estimated to be between 14- 
and 15,000 people. The impact of this boom has seen thousands 
of workers from around the country travel to Williston, looking 
for work. With the nationwide recession America is now 
experiencing, workers come here looking to begin a new life and 
a new career. Most of them are good people--many times, down on 
their luck--simply wanting a chance to start over. Their 
challenge, once they arrive here, is finding affordable 
housing.
    For the past several years, the city of--the City 
Commission of Williston has been diligently working to 
facilitate and provide incentives for affordable housing of all 
types. Tax breaks, low- and no-interest loans, and sales of 
city-owned property at reduced prices have all played a role in 
encouraging developers and builders to invest in our community.
    Although we have been successful, with 160 housing units 
permitted already in 2010 alone, the demand has greatly 
outpaced the supply. The demand for affordable housing 
increases monthly as people come here looking for work.
    One major concern of ours is that, after 2010, we will need 
additional lots developed with infrastructure. That is, water, 
sewer, streets. Experts believe that a community should have 
about 2 years of inventory of lots ready to build on, where we 
presently have less than 50 lots available. This has caused us 
to intensify efforts to attract developers who can purchase raw 
land, develop the infrastructure, and have lots available for 
sale. This has been a challenge, as the cost of developing 
infrastructure has doubled in the past 4 years, from roughly 
20,000 per lot to roughly 40,000 per lot. At the same time, 
credit has tightened dramatically, making it difficult for 
developers to secure loans.
    The city approached the Governor of North Dakota, 
requesting assistance, and is presently working out details of 
a plan whereby the State would share in some of the risk in 
developing raw property. This pilot program requires a 
developer to purchase the land and install the underground 
infrastructure--about half the cost of the development. And 
then the city special-assesses the installation of the 
aboveground infrastructure, with the State sharing 50 percent 
of that risk. This amounts to the developer assuming about 50 
percent of the total risk, the city assuming about 25 percent 
of the risk, and the State assuming 25 percent of the risk. We 
believe that this plan will be helpful in attracting developers 
to invest in our community, and will help keep the price of 
lots affordable.
    Now for the role of the Federal Government. The greatest 
challenge we face when it comes to housing is to provide 
affordable housing for the workers. If the Federal Government 
could provide additional community-development block-grant 
dollars that could assist with the installation of major 
infrastructure, I believe that the cost of the lots could be 
reduced, thereby making the housing more affordable. The low- 
to moderate-income requirements of CDBG program may also need 
to be adjusted to accommodate oilfield incomes in our 
community.
    As we are providing jobs for many displaced workers from 
around the country, I believe that his proposal may provide 
unemployed workers a chance to begin a new career.
    The other area that we need assistance with is financing of 
home purchases. Since the meltdown of the banking industry in 
2008, it has become substantially more difficult for home 
buyers to finance new homes. I am uncertain as to what could 
correct this problem, but a review of banking regulations might 
find some rules that could be adjusted to loosen up the credit 
situation. Also, if HUD provided a good home loan guaranty 
program, easily accessed by home buyers, more people moving to 
Williston would be able to purchase a home.
    A unique idea would be for the Labor Department, which 
tends to focus on unemployment numbers, to develop a program 
whereby unemployed people in other parts of the country could 
receive assistance with moving costs to come to North Dakota, 
where there's an excess of jobs waiting to be filled.
    In January of this year, Job Service estimated that the 
Williston service area had about 475 job openings. Now, less 
than 5 months later, they estimate that there are 1100 job 
openings. And keep in mind that many job openings in the 
oilfield are not listed with Job Service. During that same 
period, hundreds of workers became employed in our community.
    The oil industry is a very volatile industry, with great 
fluctuations in work force demands. For a community to adjust 
to these fluctuations requires a great deal of planning and 
support from the State and Federal Government.
    Thank you, Senator Conrad, for listening to our concerns 
and the support you have given Williston as we work together to 
supply energy for all of America.
    [The prepared statement of Mr. Koeser follows:]

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    [GRAPHIC] [TIFF OMITTED] T8154.003
    

    The Chairman. Thank you very much, Mayor Koeser.
    And we'll go to Mayor Hynek, of Stanley. And then we'll 
conclude with Mayor James. And at that point, I think it would 
be useful to open it up for questioning, and also to have 
involvement of our Federal officials, in terms of talking about 
specific needs in these communities and programs that are 
available that might address them, as they listen to what we 
hear.
    Mayor, welcome.

  STATEMENT OF HON. MIKE HYNEK, MAYOR OF STANLEY, NORTH DAKOTA

    Mr. Hynek. All right. Thank you very much. Thanks for this 
opportunity of being here. I thank Senator Conrad, Congressman 
Pomeroy for this opportunity.
    I'm the mayor of Stanley, North Dakota. I've spent my 
entire life in the Stanley area, with the exception of my 
college education. I've been mayor for 4 years, and am 
currently seeking reelection. Prior to being the mayor, I 
served on the city council.
    Stanley is a small community in northwest North Dakota. It 
is located in the area which is being intensively developed for 
crude oil and natural gas. Both the Bakken and Three Forks 
formations are proving to be great producers in the Stanley 
area. The chart that Senator Conrad had up had North Dakota 
producing 8.6 million barrels, in the month of March. Over a 
third of that--over--slightly over 3 million barrels of that 
came from Mountrail County.
    Prior to the oil development, our population was 1,279, 
based upon the 2000 Census. Some estimates now have our 
population nearing 1800. Those estimates are based on 
residential water users at the last Census, and the number of 
2.2-residents-per-water use, while at our critical shortage of 
housing, it is highly possible that we're closer to 3 per-water 
use. So, that would put us a 2400 and some. These estimates do 
not include workers' camps and trailers park--and trailer parks 
located in the--not in the city limits, but to which the city 
still provides services. These outlying locations would include 
an additional 600 to 700 people.
    Mr. Pomeroy. Mayor, what was the starting figure you used?
    Mr. Hynek. Twelve hundred and seventy-nine was the 
population in 2000.
    Mr. Pomeroy. So, that'd be a--it is entirely possible 
you've got a 100-percent increase.
    Mr. Hynek. Totally. If you--without a doubt, if you 
included the outlying workers----
    Mr. Pomeroy. Yeah.
    Mr. Hynek [continuing]. That we provide some services to.
    At this time, there's no available housing in Stanley. Some 
houses, and two additional apartment buildings, are currently 
being constructed. Current rental rates for a two-bedroom 
apartment in Stanley are $1300 per month. This not only--this 
also puts a stress on school districts, cities trying to hire 
police officers, schools trying to hire teachers. They come 
because the pay scale has increased. But, when they find the 
cost of living, they move on; they just can't afford those 
types of rents.
    Mr. Pomeroy. Could you--how many units in those two 
apartment buildings?
    Mr. Hynek. That are going to be built? I believe there are 
15 in one, and 16 in the other.
    We are limited in expansion by our existing infrastructure, 
also. Due to State law, section 15 of Article 10 of the North 
Dakota Century Code, Stanley is at its limit in regards to 
debt. This basically keeps us from improving and expanding our 
infrastructure. Over the last 3 years, Stanley has, 
approximately, added $8 million worth of infrastructure to our 
city.
    The exploration part of oil production will go on for 
several more years in our area. The workers for this part of 
the industry are, and will be, housed in workers' camps and 
trailer parks. The production part of the oil industry is 
estimated to last an additional 50 years. These are the jobs 
where families will actually move to Stanley and need homes. 
These jobs are starting to be filled, and housing is becoming 
critical for these families.
    There are two ways in which Stanley is seeking assistance. 
First is infrastructure. We need an additional cell for our 
sewage lagoon, which is designed for 1500 people. And we also 
need sewer and water mains, along with streets, curb, and 
gutter. Because of financial restrictions, these cannot be 
completed by the city.
    Second is housing. I would ask that the banking regulations 
which have been enacted be revisited. Currently, because of 
these--new regulation, it has become nearly impossible for our 
local community banks to loan money for housing. I visited with 
two local community banks and the Bank of North Dakota, all of 
whom said loaning money on a house in Stanley is very 
difficult. And if the house were be--to--located outside of the 
city, the local community banks would not even accept an 
application for a loan.
    Some of the specific problems are: education and training 
costs for staff to maintain compliance; regulatory penalties 
for noncompliance; software investment and continuous updates; 
regulatory guidelines for terms that do not fit with lending 
plans that are in-house; appraisals which require segregation 
of duties so additional staffing may be required; and also, 
mandatory escrows. And I do apologize if some of these have 
been addressed; it's highly possible.
    So, whatever assistance that is available, it would be 
greatly appreciated. Stanley is a very bright spot in a dim 
economic time. With some assistance and guidance, we will 
overcome our challenges.
    Thank you.
    [The prepared statement of Mr. Hynek follows:]

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    [GRAPHIC] [TIFF OMITTED] T8154.006
    

    The Chairman. Thank you. Excellent testimony, as well.
    Mayor James, welcome.

   STATEMENT OF HON. LYN JAMES, MAYOR OF BOWMAN, NORTH DAKOTA

    Ms. James. Thank you.
    The Chairman. Why don't you proceed with your testimony, 
and----
    Ms. James. Senator Conrad, Congressman Pomeroy, Mr. 
Sullivan, and Mr. Davis, thank you. Good afternoon.
    It's a privilege to be here and be part of this historical 
time in North Dakota. I appreciate the opportunity to speak to 
you.
    You know, although the exploration has slowed in Bowman 
County, oil production is still going strong. And it is 
projected that it will continue for more than 20 years. And 
until very recently, Bowman country was the highest-producing 
oil county in North Dakota. I think Mountrail knocked us off 
the map, but--anyway, we're still going strong down there. And, 
hopefully, with the Three Forks development, it looks like we 
will be back in the exploration phase again, when they get to 
that.
    Production brings long-term jobs to a community, which, in 
turn, creates a need for permanent single-family housing, as 
well as multifamily units. As we look back over the past 20 to 
30 years, and as we look forward to the new development of our 
communities, we are well aware that many local taxpayers have 
less than enthusiastic support for municipal development of the 
infrastructure needed to foster new housing, such as streets, 
curb and gutter, water and sewer mains, et cetera. And I'm sure 
Ward can speak very familiarly to that.
    The city of Bowman and other cities in western North Dakota 
have been, and are now, struggling with the need for expanding 
that infrastructure in order to accommodate new development.
    Oil is not the only energy industry driving the demand for 
housing, either. Bowman country is also seeing activity in wind 
energy, pipeline projects, and proposed uranium and coal 
development, as are many of the other counties over here in 
western North Dakota.
    The city of Bowman offers a real estate tax exemption of up 
$150,000 per year for 2 years to individuals who build new 
housing. And this exemption was passed by the North Dakota 
legislative body in 2009. And we resolved to follow that 
pattern.
    Presently, there's nothing in place for the developer who 
steps up and takes on risk in all his development costs. And 
also, the inflated prices on housing that the oilfield has 
supported over the years has skewed our values to the point 
where we are now forced to have a countywide reassessment. And 
we have older residents on fixed incomes, who are very 
concerned about what is--what that's going to bring them. You 
know, in theory, it should be OK for them, but they're very 
concerned. And so, as a leader, so am I.
    After visiting with some local developers and also our 
economic development director in Bowman, I found that one of 
the topics brought up on each occasion was a public-private 
partnership. The local government entities have their hands 
full, as Mike stated, taking care of the day-to-day needs of 
communities who serve the energy industry.
    There are terrific burdens on the existing infrastructure 
in the impacted areas, and insufficient funding available to 
keep up with those burdens. The State of North Dakota worked 
with oil-impacted counties, during the last legislative 
session, to help bring more funding back to the areas affected 
by oil exploration and production. Although the adjustments to 
gross production tax paid back to counties and cities was 
appreciated, it was not enough, and more work will need to be 
done during the next session.
    We would like to see the Federal Government make an 
investment in oil country by offering loan guarantees to 
private developers, if at all possible. It would seem to be a 
safe investment in growing the local, State, and national 
economy by minimizing the risk to the developers and local 
governments.
    We are well aware that there are many housing programs 
available through USDA, North Dakota Housing, finance, et 
cetera. Unfortunately, they're geared toward low- to moderate-
income housing. That does not apply to the oilfield. So, we're 
kind of caught in a little bit of a trap there. There does not 
seem to be any programs available, to speak of, for market-rate 
housing.
    It would be helpful if there were some sort of program 
available to developers that could buy down interest on their 
speculative homes, or something that could assist them.
    It would also be extremely helpful to the municipalities if 
there were some sort of assistance to us for the infrastructure 
projects. As I stated previously, local government budgets are 
stretched to the limit, and the taxpayers are not receptive to 
sharing the burden of new development.
    I visited with one of our local--our city engineer, and he 
said, ``Minimal cost per lot, to develop water, sewer, curb and 
gutter, and the pavement to finish it off, would be $30- to 
$40,000 in Bowman. And I'm sure here it's higher, as Ward 
indicated.
    I believe that the developers would step forward, after 
visiting with them, to build the needed housing in our 
communities if there were programs to assist them, as well as 
the infrastructure being in place.
    The Bowman City Commission looks forward to working with 
Federal, State, and other local governments in order to partner 
to find solutions to these housing problems and challenges in 
western North Dakota.
    Thank you for your time. I appreciate it.
    [The prepared statement of Ms. James follows:]

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    The Chairman. Thank you very much. Really excellent 
testimony. I'm delighted that the three of you could be with us 
today.
    Maybe we need to start on what happened the last boom, 
because I know it very much affects thinking, still today. I 
was tax commissioner at the time. It's riveted in my mind what 
happened here. I remember very well, in about 1986 or 1987, 
Williston, as I recall, had about $27 million of debt. And you 
are dedicating 34 to 38 percent of your property taxes in this 
community to paying down that debt. And that went on for 7 
years. That was a tremendous burden on this community. And I 
understand, absolutely, why local officials who have seen that 
experience have been reluctant to step forward again.
    And Mayor James, Mayor Koeser, you both talked about the 
development cost per lot. I think one of the figures was $20- 
to $40,000. I think, Mayor James, you used the figure of $30- 
to $40,000. That's really what we see, with respect to single-
family homes. And that is--you know, there is a risk associated 
with it. And then you talk about curb and gutter, you talk 
about sewer and water; you're talking about significant risk 
for these communities.
    And, of course, the question in everybody's mind, Is this 
time different? Is this time different? We've got lots of 
reason to believe this is going to be a longer-lasting boom, 
one that really has legs. But, you know, that's what we thought 
the last time. And so, none of us can be absolutely certain. 
You know, maybe there's going to be some new technological 
breakthrough in some other form of energy. Hard for me to see 
how that's going to happen in any near-term sense. And so, our 
reliance on petroleum, it seems to me, is going to continue, 
and it's going to grow.
    And especially if we want to reduce our dependence on 
foreign oil, which has to be a very high priority for our 
country.
    So, that gives--leaves us with the question of, What do we 
do about infrastructure? It's been raised by Mayor Hynek. What 
do we do about housing? And both of these, historically, have 
been a local matter and private development matter.
    Because this energy play is so important to our national 
security and our national economic situation, there really is, 
in this case, some national responsibility. We've got to make 
certain that this development goes forward, that we're not 
losing out on developing this resource locally because there's 
insufficient housing for the workers that are needed for that 
production to come online. That's why there is a national 
interest.
    So, I think, Mayor James, you talked about the need for 
public-private partnership. And that's what some of these 
programs are that are in place. Rich, I think you talked about 
assistance with the development of two fairly large apartment 
units here; 31 units or--I can't remember--40 units; 31 units 
in another. How did that come about, with the fact that so many 
of these programs are designed for low- and moderate-income 
people? Do you know the--how those were able to be met?
    Mr. Davis. I briefly learned about that just before 
arriving today. I know that they were funded through our 
Guaranteed Low-Rental Housing Program. And those programs are 
for the low- and moderate-income. So--projects--are guaranteed. 
The tenants must not exceed moderate income levels.
    The Chairman. Yeah. And, as I recall, you said, in this 
community, $46,000? Thirty thousand under one----
    Mr. Davis. Yeah.
    The Chairman [continuing]. Program, 46,000----
    Mr. Davis. Those aren't--those are averages. We took--just 
took a little bit of the data to see what the typical borrower 
was in both of our programs. In our direct program, it's about 
30,000, in our Guarantee Program it's about 36,000. I don't 
have the----
    The Chairman. And it's the Guarantee Program that's being 
used for these apartment units.
    Mr. Davis. Well, no. They're actually--that's the Single-
Family Guarantee Program that I was speaking of at that point. 
For that program, that was the average income. For--so, that's 
115 percent of area median income, which would be comparable to 
our tenants in the apartment building.
    The Chairman. Can you tell us, in your experience--I'm 
interested in the mayors'--boy, it sounded to me, Ward--is 
you've got the need for hundreds of units, here. What is your 
current assessment of how many units--additional units you 
need, here?
    Mr. Koeser. It's a difficult question to answer. I think a 
lot of it goes back to the number of jobs that are available. 
And where--Job Services, they have 1100 openings now in the 
Williston service area. There are probably, some believe, up to 
2,000 job openings, because a lot of companies don't list with 
them. So, obviously, you have need for that number of workers.
    Now, many of the workers coming here are young people who 
don't have credit or don't have good credit, or they are 
individuals moving here from--and I'll pick on Michigan, as an 
example, where they're down on their luck, they may have lost 
their home, and so, their credit is no longer good. And so, 
most of the people moving here really need to be in the rental 
situation. They're not--they aren't qualified. They don't have 
the credit to buy a new home. So, we see a huge demand in that 
area.
    Interesting to comment on Rich's projects that--one of them 
is a 51-unit project, and one's a--I think, a 41-unit project. 
And they'll deal with the lower- and moderate-income people.
    Now, we have a number of those. You know, the oilfield pays 
great wages, and they have good benefits. But, when--you have 
your whole service industry--people who are working in the 
motels, the restaurants, the retail sectors--who don't make 
that kind of money. And so, they're really being stressed right 
now, as to, How do they afford a place to live? And so, we're--
--
    The Chairman. And our senior citizens, too----
    Mr. Koeser. Oh, man. Let's----
    The Chairman [continuing]. Is what I'm hearing from, in the 
Williston community. Seniors who are, some of them, just 
petrified that they're going to get priced out of the market, 
here.
    Mr. Koeser. Yeah. The--I received a call last week from a 
senior citizen who had been paying--I think it was a two-
bedroom apartment--$450 a month. And they were doing fine. And 
they just had received notice that next--in 1st of June, it was 
going to go up 100; 1st of July, it was going to go up 100; 1st 
of August, up 50. So, they were going to go from 450 to 700. 
And she was very, very concerned.
    The Chairman. Yeah.
    Mr. Koeser. And so, projects like this are something, of 
course, we direct them to. And we're very anxious for them to 
be completed. Because we really think there's that whole sector 
that----
    The Chairman. That will take some of the pressure off.
    Mr. Koeser. That will take some of the pressure. But, you 
know, to know how many houses we need--it's very, very 
difficult. But, it's certainly in the multihundreds, if not--
you know, if we had 1,000 housing units available right now--
whether that be apartments--and mostly apartments--and 
affordable houses, I believe that they would be full in a 
matter of maybe a month. It's just--affordable housing is kind 
of a gray area, what's affordable. But, it seems, in this area, 
if you can build a house or have a house available under 
200,000, it will sell in a day, maybe 2 days. If you get over 
200,000, it takes longer. But, tremendous demand--tremendous 
demand for it there. And, as you know, when you have that great 
demand, it drives up the prices of all things; rents and 
everything go up and really challenges people.
    The Chairman. You know, there was this housing needs 
assessment that was done by Minot State University in 2006. And 
they were projecting a need for an additional 2,000 housing 
units in Williston and Williams County between 2010 and 2015. 
Now, that was from----
    Mr. Koeser. Right.
    The Chairman. --2006. So, do you think that that's probably 
out of date?
    Mr. Koeser. It's out of date. And things, you know, have 
changes dramatically, you know, since that particular time.
    I--sometimes people get frustrated that we've not been able 
to react as quickly as we would actually like to, to the 
housing demand. But, if you even look back to what Job Service 
said there was for openings in January versus now----
    The Chairman. A dramatic change.
    Mr. Koeser [continuing]. You know, you've had probably 
1,000 or 1500 job openings happen, and there's no way you can 
build apartments or houses or anything in 4 months' period of 
time, especially in the wintertime, to accommodate that. So, 
it's just--it's a huge challenge. I mean, it's--there's some 
great opportunities with it. And I like to kind of piggyback 
what Mike said; these are some real opportunities for us to 
grow and become a better community and have the goods and 
services and the retail that people want.
    But, it's taking everybody, working together. It's taking 
everybody, working long hours. And we're ready to do that, and 
willing to do that.
    And any help that we can get from the State--we really 
appreciate the initiative of the Governor. That, I think, is 
going to help us in the area of getting some raw land 
developed. And anything that we can do as we meet more with you 
and talk to you more on the Federal level.
    But, this--the credit situation, I have often said, is 
where we are feeling the recession the most in North Dakota--in 
western North Dakota. We don't--you know, we don't know the 
people unemployed and all the other issues, but we feel it in 
the credit side of things. Credit is very, very tight. Realtors 
will tell you that, developers will tell you that. And that 
certainly is complicating finding a solution.
    The Chairman. Yeah, it is, because what's happened is, you 
know, when the economic downturn--the balance sheets of banks 
were impaired.
    Mr. Koeser. Yeah.
    The Chairman. And so, the regulators come in and say, 
``Hey, you've got to restore your balance sheet.'' That's 
what's leading to these regulations that Mike referenced, is--
we can't allow a repeat of just what happened. And part of what 
just happened was caused by overly loose credit. So, they were 
making loans to people, with nothing down. You know, we--I know 
there are people who will urge me to support loans, with 
nothing down. Look, we cannot do that. We cannot do that. We 
can't afford another crash. And part of the reason we had a 
crash is because lending institutions were making loans that 
you could almost assure yourself they were going to be a high 
default rate. And, in fact, that's what we got, was a high 
default rate. So, we've got to have some standards here. We've 
got to have some regulation to prevent that from happening.
    On the other hand, it can't be so severe that we restrict 
the flow of credit to places that desperately need it and can 
use it and not abuse it.
    Mike, let me ask you, how many units do you think you need?
    Mr. Hynek. As far as--well, what we're looking at is a 
little bit of a different situation. We've got the EOG 
resources, and we've got--with their wonderful apartment--or 
their office building and their infrastructure, and Whiting is 
putting up a big office building on Highway 8; and those folks 
are looking, really, more at family housing. What we need for 
numbers there? It's seems just ridiculous to say this, but I 
think if we had 100 homes available, they would sell, in a 
matter of months, when these people start coming in to fill 
these positions that they're offering.
    The Chairman. And at what price point would they sell?
    Mr. Hynek. Well, from the folks I've visited with on that, 
they think in the $125- to $150,000 homes--would be their range 
of where their--it would be very affordable for these folks.
    The Chairman. OK. Lyn, if I can ask you--how many units do 
you need? What's your assessment of how many units you'd need 
in your community?
    Ms. James. I would say--of course, we're in a little bit of 
a different situation in Bowman, without the exploration side 
right now. But, I would say we safely could use 50. And----
    The Chairman. And that would----
    Ms. James. Right now. And then--with planning for more as 
this exploration widens its path, because we will see more. I 
know we will.
    The Chairman. All right.
    Let me go to Congressman Pomeroy for his questions.
    Mr. Pomeroy. I know we want to get, Mr. Chairman, to the 
local builders, too. So, I will be very quick.
    Mayor James, you said there was an 1909 law passed in the 
legislature. Did--is there a State program that's relevant, in 
addition to the Governor's initiative on sharing the risk?
    Ms. James. You know, I have a copy of that here I can share 
with you, if you'd like.
    Previously--prior to 2009, it was $75,000 exemption that 
was supported by the State for 2 years. And then they raised it 
to 150. Now, each individual community has the choice of doing 
nothing or doing the maximum. We believe that it would be 
beneficial to us to forgive that amount for 2 years and then 
get a higher dollar back on the tax roll later. So----
    Mr. Pomeroy. Right. That's a----
    Ms. James. But, I do have a copy--
    Mr. Pomeroy [continuing]. Tax exemption----
    Ms. James [continuing]. Of that----
    The Chairman [continuing]. On new home construction.
    Ms. James. Right. And that's the burden to us, as a 
municipality. There's no reimbursement from the State. It's 
just that we will see a greater return later.
    Mr. Pomeroy. Yeah.
    Ms. James. And one of the other things I'd like to mention 
regarding real estate tax, and then also development, is that, 
without infrastructure in place for new development within the 
city limits, we are seeing these little neighborhoods pop up 
that are outside of the city limits. They want city services; 
in fact, they demand them. But, we don't reap any benefit back 
from them. And for us to--as a city, to step out there and 
invest in the infrastructure, the return is so slow that it--
you know, it's really a difficult risk to take, you know, for a 
small community--or a large community. I mean, it's all economy 
of scale, I guess. But----
    Mr. Pomeroy. The Economic Recovery Act was passed to try 
and jump start a lot of activity across the country. Actually, 
that was responding to economies that were dead, not economies 
white hot. But, nonetheless, funds have been available, to an 
extraordinary dimension. I'd like to ask our Federal 
representatives, both Dan and Rich, if you--have the Federal 
Recovery Act dollars spent out to your agencies--are there 
opportunities, relative to Recover Act dollars, relative to the 
need, up in this area?
    Mr. Davis. Well, I can speak to the housing side--single 
family housing. We received $10 billion--the Recovery Act, and 
have practically fully obligated all of those funds. In fact,--
January. We've had some--obligations, so there's still a little 
more remaining on the guarantee side.
    Voice: We'll take it.
    [Laughter.]
    Mr. Davis. But, on the direct side, that program is very 
much alive and well. We have plenty of funding there. But, as I 
mentioned, it is for the very-low- and for the low-income. But, 
we're working very hard. And we're optimistic we'll be able to 
obligate all those funds. We do have plenty of funding in the 
direct program.
    Ms. James. If I might, Congressman, regarding the Recovery 
Act, we went line by line through that--through all of the 
programs. And because of our numbers, our population, we did 
not qualify for----
    Mr. Pomeroy. On the low- to moderate-income----
    Ms. James [continuing]. On----
    Mr. Pomeroy. Basis, or what? I mean----
    Ms. James [continuing]. On--basically, on any of the 
programs where there were funds available, whether it was 
infrastructure funds or anything. I mean, because of our--size 
of our community.
    Mike, did you find that?
    Mr. Hynek. We didn't go through--. That's what we were 
basically advised----
    Ms. James. Yeah, yeah. It was very frustrating. We actually 
had Senator Dorgan on the phone while we were going through 
that. And there just really--for small communities, we really 
fell through the cracks.
    Mr. Pomeroy. I'd like both of you to respond to that. What 
have you got for places like this?
    Mr. Sullivan. I apologize. I don't have the data on the 
funds, the dollar amounts, but I do know that--was obligated 
for our community fund--. I do think that there is a problem in 
rural States like North Dakota, where, you know, the 
entitlement areas get a portion, and the rest of the State--.
    The Chairman. Well, we know that, in our funding--we got 
$180 million, in North Dakota, for roads and bridges. And that 
money was distributed over a 2-year period. So, that benefited 
areas all across the State. In fact, that's part of the funding 
stream. It's hard to differentiate which dollars go where. But, 
North Dakota got $180 million right there. In the energy area, 
we got tens of millions of dollars. We got--you know, Basin 
Electric, alone, got $100 million.
    So, North Dakota had substantial benefits from ARRA 
funding. Whether the specific programs that would be of use to 
a community of your size, other than highway or energy--
retrofitting homes--that kind of thing, which flowed across the 
State--that's something we should go back and assess.
    We've got--you've got other----
    Mr. Pomeroy. The final would be this low/moderate-income 
issue. The--we've encountered that with some of the flood 
reconstruction, back in the late 1990's, I remember. The--well, 
I guess I've got to see what the mayors--are you seeing 
eligibility criteria for Federal programs requiring low- and 
moderate-income levels to access the funds being a substantial 
bar to your ability to use them in the rural communities?
    Mr. Hynek. I think some of that will--right now, it hasn't 
been, on some of the programs, you know, still based upon the 
old Census numbers. I think what's going to happen is, the new 
Census numbers come out and the new dollars of income come out, 
I think we're going to real--bump hard against that.
    Mr. Pomeroy. OK.
    Mr. Hynek. That's my feeling.
    Mr. Koeser. And I would say that's going to be true in 
Williston. I mean, up to this point, we have kind of chased 
down different trails, trying to find dollars. The incomes are 
good. I mean, we're blessed. The people make a lot of money 
here--not--but not everybody. But, it's been difficult to make 
that happen. We continue to look--and, you know, we'll 
certainly continue to see if things change. But, we--the State 
shows Williston has having the highest per-capita salary in the 
State right now. That's good, and yet, it doesn't help you get 
funded on special programs.
    Mr. Pomeroy. Thank you, Senator.
    The Chairman. Yeah. It's really the case. I think that's 
the thing that's been knocking us out on some of these. 
Clearly, road and bridge funding is not allocated on that 
basis--on an income basis. A lot of the energy funding is not 
allocated on that basis. The money for energy projects are not 
allocated on that basis. But, when you go to housing--just the 
description, Dan, that you and Rich gave here--it is really 
targeted low- and middle-income people. And some of our people 
qualify. So, for example, we see projects underway here that 
will help low- and middle-income people.
    But, we've got kind of an unusual thing going on here. You 
know, in this economy, there aren't many boom places. This is a 
place that's booming, and yet there is a Federal--some Federal 
responsibility--not complete, because housing is typically 
local and private. But, because this is a national priority--we 
have to reduce our dependence on foreign oil.
    So, we clearly have an obligation to help on roads, 
bridges, and, I would argue, infrastructure. Because, 
otherwise, it's very hard to see how it can happen in a timely 
way, given the high capital costs and given the risk that we 
have seen in the past. I mean, isn't that kind of the truth?
    I mean, money follows money. We all know that. When you've 
got high-income people, that means higher local revenue, that 
means more construction, that means more jobs, more economic 
activity, more ability to provide education, housing, and all 
the rest.
    But, the problem is timing. That's where we've got a big 
gap here. And it's made very clear to me by the testimony of 
the three of you. We appreciate it very much.
    Mr. Pomeroy. I would just say, I'm very much struck by the 
number of homes you're saying you could move immediately--
available in each of the three communities. That, perhaps, left 
as big as impression of any of the other testimony.
    I'd also like to introduce, for everyone in the audience, 
the North Dakota face of these Federal agencies that have 
played such an important role in housing. Joel Masgee with 
HUD--can you stand up, please?--and Jasper Schneider, with 
Rural Development at U.S. Department of Agriculture. You've got 
troubles, call these guys.
    [Laughter.]
    Mr. Pomeroy. You call Conrad and me, we'll refer you to 
these guys.
    So, we're really pleased to have such competent, focused, 
local leadership for the Federal programs that--these are a 
couple North Dakotans that we know are really very much focused 
on this aspect of need. And we'll be working with you to make 
sure these Federal programs can work.
    The Chairman. And thank you, thanks to this panel.
    And we'll call the next panel: Jessica Thomasson, director 
of Lutheran Social Services Housing, LSS Housing, Incorporated; 
John Boyd, operations manager of EOG Resources--large 
international oil and natural gas company. And I know they have 
tried to alleviate the housing shortage by erecting a man camp 
of temporary housing in Stanley. And Mr. Boyd is a native of 
Stanley, I believe.
    Mr. Boyd. That's correct.
    The Chairman. And Matt Miles, who is a principal in 
Leadership Circle, LLC, a large, experienced real estate 
developer that's had a part in developing the Timbers 
residences, here in Williston.
    Welcome, to all of you. Thank you so much for being here.
    John, why don't we start with you, and we'll go right down 
the line. We'll start John Boyd, then Matt Miles, and then 
Jessica Thomasson.
    Again, John, thank you so much for taking your time to be 
here today.

   STATEMENT OF JOHN BOYD, OPERATIONS MANAGER, EOG RESOURCES

    Mr. Boyd. Thank you.
    Senator Conrad, Congressman Pomeroy, Federal 
representatives, distinguished guests, and citizens of North 
Dakota, thank you for convening this field hearing regarding 
housing needs related to oil and gas operations.
    EOG Resources agrees that housing issues in western North 
Dakota need to be addressed in a proactive and efficient 
manner. I am EOG's North Dakota operations manager, responsible 
for all aspects of our operations in the State. I was born and 
raised in Stanley, and am excited to see the positive economic 
impact oil and natural gas development is having in the State. 
I have 30 years of experience in the industry in the U.S., 
including initiating and developing field crew housing 
facilities both onshore and offshore. I refer you to my 
biography for my professional experience.
    Currently, EOG employs 100 people in North Dakota, and is 
the largest crude oil producer in the State. As our operations 
began to ramp up in 2008, EOG recognized a shortage of housing 
for our employees and service contractors in Mountrail County.
    Many of our contractor personnel are spending considerable 
time outside of normal business hours, commuting daily from 
Minot, Williston, and other towns in the area. In order to 
minimize the commuting and travel obligations for these 
workers, and to minimize traffic on the North Dakota roads, we 
initiated development of a 400- person field crew housing 
facility, located near Stanley, to support drilling and 
completion operations and other support contractors. This has 
worked well for EOG in the past, in operations in other States.
    In developing our field crew housing facility, our biggest 
challenges involve providing infrastructure services, such as 
water, power, communications, and sewage. Early on, during our 
activity in Mountrail County, we discovered that the power 
infrastructure had not been updated for 40 to 50 years. The 
system, at that time, was operating at maximum capacity, and 
the area was experiencing blackouts. EOG and other oil and gas 
companies worked with the local electric cooperative to secure 
funding to upgrade the power grid in the county. This upgrade 
was very important for our continued operations in the area.
    The Chairman. Do you know how much that upgrade cost, John?
    Mr. Boyd. Approximately $15 million.
    The Chairman. And was that federally funded?
    Mr. Boyd. No, it was funded from the oil companies.
    The Chairman. The oil companies put up the money for that 
themselves.
    Mr. Boyd. Yes, through interest-free, nonrecourse loans.
    The Chairman. Interest-free nonrecourse loans.
    Mr. Boyd. Yeah.
    The Chairman. OK.
    Mr. Boyd. And that's with Mountrail Williams Electric, here 
in Williston.
    The Chairman. So, you pre-fund--in effect, pre-funded that.
    Mr. Boyd. Yes.
    The Chairman. So it could be put up.
    Mr. Boyd. Yes. And then we get repaid through new hookup 
charges----
    The Chairman. OK.
    Mr. Boyd [continuing]. Which most of the new hookup charges 
are us, so----
    The Chairman. Right.
    Mr. Boyd [continuing]. We're repaying ourself----
    The Chairman. Yeah.
    Mr. Boyd [continuing]. Is what's going on.
    [Laughter.]
    The Chairman. Thank you.
    Mr. Boyd. Originally, power for the field crew housing was 
provided by diesel generators. Because of this power upgrade, 
we now have the power grid connected to the man camp.
    Potable water at our field crew housing facility is trucked 
in daily and stored onsite. We are currently working on 
bringing city water to the facility from the city of Stanley.
    Sewage from the field crew housing facility is also trucked 
daily from the facility to the city of Stanley sewage treatment 
lagoons. The operating capacity of the sewage lagoons is being 
stretched, and the city is working on upgrading the system. 
This upgrade will be very costly for the city. I believe Mayor 
Hynek referred to the issue of their sewage lagoons earlier.
    Overall, the modular housing concept has worked very 
efficiently for our drilling and completion operations. 
However, for our production operations, another type of housing 
that needs to be developed is permanent single-family homes or 
condominiums for operational personnel and their families who 
will work in our offices in Stanley. Most of the wells 
currently being drilled in North Dakota will be producing for 
30 to 40 years, and will require ongoing maintenance, which, 
hence, creates permanent jobs. We anticipate that EOG's total 
number of employees also will increase as we hire additional 
staff to meet our operational needs; and as we continue to 
develop additional resources, we think that more families will 
be moving into Mountrail County.
    Permanent housing is difficult to develop, because of the 
cost--the capital cost of installing infrastructure and its 
maintenance expense become the responsibility each city. Due to 
the recent rapid expansion of operations in the State, most of 
the local communities are struggling to secure the capital 
necessary to properly expand the infrastructure. In addition, 
the existing local infrastructure is being stressed, due to the 
sheer number of people that it now must support.
    EOG has been working with the mayor, the city council, 
Mountrail County commissioners, to find additional land that 
can be developed for permanent housing. However, such areas do 
not have infrastructure to support that development. And I 
understand the city of Stanley and the county do not have 
sufficient funds to upgrade the infrastructure. Herein lies a 
challenge.
    In conclusion, EOG and our North Dakota employees consider 
ourselves to be an important long-term member of the local 
community of Stanley and Mountrail County. We support the 
efforts by the Federal Government to help the cities and 
counties in upgrading the local infrastructures.
    [The prepared statement of Mr. Boyd follows:]

    [GRAPHIC] [TIFF OMITTED] T8154.012
    

    [GRAPHIC] [TIFF OMITTED] T8154.013
    

    The Chairman. Thank you. Thank you, John. That's very 
important testimony.
    Matt, welcome, why don't you give us the private 
developer's perspective and what you've encountered.

   STATEMENT OF MATT MILES, PRINCIPAL, LEADERSHIP CIRCLE, LLP

    Mr. Miles. Thank you, Chairman Conrad and Congressman 
Pomeroy.
    I've spent 2 years looking at the Williston, North Dakota, 
housing market. Currently, my company is underway with a 130-
unit single-family housing subdivision inside the city limits.
    I appreciate you giving me the opportunity to express my 
thoughts on the current issues facing housing availability.
    I believe housing shortages, in general, should be solved 
by the private sector. Demand, followed by supply, is the best 
way to build a healthy market for all involved. Subsidized 
housing, in most cases I have observed, is just a way to keep 
businesses from paying their employees enough to afford to 
live. This said, there are always people on the margins that 
may need help. In these comments, I am addressing boomtown 
impacts specific to energy industry workers.
    Homeownership is the backbone of any community. If home 
ownership opportunities exist, the most important thing then is 
to assure people can finance the purchase of their homes.
    Due to changes in underwriting standards over the last 2 
years, and a perception that there is an additional risk in 
lending in a local economy fueled by an energy boom, a program 
to assist buyers in obtaining mortgages for the purchase of 
permanent housing would be helpful. The Bank of North Dakota 
and the city of Williston have expressed interest in helping 
developers offset or defer some of their building costs. I 
think the effort would be better placed helping people purchase 
their homes.
    Also, it is currently very economical to own or build a 
home in Williston, because the city does not assess impact 
fees. As the area continues to grow, city infrastructure will 
be stressed. Making sure the city has funds for water, sewer, 
and major transportation routes for future growth would help to 
assure long-term affordability.
    To restate the specific things that are necessary to create 
home ownership opportunities, we need to promote home ownership 
and long-term community stability by providing some vehicle to 
offset risk to mortgage lenders in this boomtown environment 
and thus providing a long-term permanent work force base. 
Financially supporting infrastructure projects now to provide 
long-term affordable--to provide a long-term affordable 
building environment in the area would also be helpful.
    The helpful attitudes and actions of both Williston and the 
State of North Dakota create an inviting atmosphere for real 
estate developers, and is very much appreciated. Directly 
helping prospective homeowners--in the short term, with 
mortgages; and in the long term, with a sustainable low housing 
cost--seems to be the best plan.
    Thank you for your consideration.
    [The prepared statement of Mr. Miles follows:]

    [GRAPHIC] [TIFF OMITTED] T8154.010
    

    [GRAPHIC] [TIFF OMITTED] T8154.011
    

    The Chairman. Thank you very much.
    And we'll go now to Jessica Thomasson.
    And then we'll have a chance to go back to everybody and 
ask questions before we have to conclude.

STATEMENT OF JESSICA THOMASSON, DIRECTOR OF LSS HOUSING, INC., 
            LUTHERAN SOCIAL SERVICES OF NORTH DAKOTA

    Ms. Thomasson. Thank you, Chairman Conrad, Congressman 
Pomeroy.
    As a nonprofit private housing developer working across the 
State of North Dakota, it's been my privilege to meet community 
leaders from across the State who are doing what they can to 
build their communities; not just for today, but for the 
future. And we met three such officials earlier. They really 
have a very difficult job, and rise to the task, I think, 
admirably.
    I'm going to try to skip through a lot of the written 
testimony that I have. You've heard really great testimony 
earlier today, and I wanted to get to some of the potential 
solutions that I'd like to ask you to consider for multifamily 
housing, in particular.
    But, I did want to spend a minute and talk about the reason 
why--With all of this activity, with all of the good things 
that are happening in the region, why don't we see those 
housing numbers being achieved? Why don't we see the need being 
met? If North Dakota is the envy of many States, with its 
economic fortunes and economic successes, do we need to talk 
about affordable housing? Do we need to talk about 
availability? Won't the market just take care of it? And, I 
guess, from my perspective, unfortunately, the answer is, no. 
For a number of reasons that we've talked about earlier, the 
market just can't address affordable housing in a meaningful 
way.
    And I want to talk about affordability not in a narrow 
sense, of being only affordable to, say, a low- or a moderate-
income household, but ``affordable'' really is a relative term. 
And I think one of the mayors mentioned that in the panel. We 
need housing that's affordable to a variety of people in the 
work force.
    This is an issue that I think particularly affects rural 
communities. If we have--and I'll talk most about multifamily, 
because that's the primary work that I'm involved in--but, if 
you have programs that require you to have a very targeted or 
specific tenant group that your serving--in a rural community, 
that's a very limiting factor. I think you need the flexibility 
to be able to serve low-, moderate-, middle-, and other housing 
needs, as well, in the same project. So, that's one of the 
unique challenges, I think, in working in small towns.
    So, a little bit on the ``why.'' Why do we have market 
issues that perhaps aren't always being addressed? I think 
building housing in rural communities can sometimes be more 
costly than building in urbanized areas. It may be proximity to 
materials or labor, in some cases. It could be size of 
projects. In a lot of smaller towns--and, again, Williston is 
on that border of being a larger community--but, in some of the 
smaller towns, you really can't build 100 units at a time. And 
so, you have some economy-of-scale issues to deal with.
    Financing housing projects in rural communities presents 
unique challenges. National secondary markets are seldom 
designed to really understand or appropriately value rural 
properties. And so, you run into the appraisal gap issues that 
we talked about. You run into challenges with community bankers 
being able to sell those loans on traditional secondary 
markets, and they present very real barriers to financing 
housing.
    You also run in, then, to lenders--community lenders who 
are very interested in lending on projects in their 
communities, but they run into loan-to-value challenges. It's 
not loan-to-cost, it's loan-to-value. And so, if that value is 
determined by an appraisal, sometimes it presents a challenge.
    In addition to these cost factors, rural markets sometimes 
are less attractive to many in the real estate industry; in 
part, because of the--in my opinion, the risk-reward ratio 
sometimes is greater in other places. So, there's less risk for 
more reward if you're building larger projects in perhaps more 
proven markets. And I think that's just a common issue, when 
you looking at rural communities and unproven markets, that 
that's a very natural economic decision that's oftentimes made.
    Some of the programs that are available to assist with 
financing, particularly, affordable housing are complicated. I 
don't think anybody tries to make them complicated, but they 
are. And there's a lot of paperwork and regulations and things 
that you need to keep track of. And if that's not your business 
model, it's difficult to enter into some of those programs. 
It's also easier to take on all that paperwork for 72 units 
than it is for 12. It's just, again, another practical matter 
of economies of scale.
    So, who needs affordable housing? And I'll just--again, 
this is in the written testimony, so I'll just give you the 
highlighted version. Housing units that had previously been 
affordable in a lot of rural communities perhaps are not 
affordable anymore. Maybe they were sold and repurposed for 
another housing need. So, that source of affordable housing is 
gone. If there's no physical displacement--let's say that a 
renter or a homeowner doesn't have to move--it doesn't apply to 
homeowners--but, let's say a renter doesn't have to move; there 
may be economic displacement, so perhaps their rents go up, as 
I think Mayor Koeser referenced in his testimony. And then 
housing demand has outstripped the supply. So, even if people 
have good employment and good jobs, a lot of times they have a 
difficult time finding housing. And I think you mentioned that, 
as well. Supply follows demand. And that is, in fact, very 
true. Sometimes there's just that time lag that really causes 
true hardship for families.
    In markets like the one in western North Dakota, without 
housing that's tied to affordability requirements for the long 
term, market pressures will eliminate any latent affordability 
that does happen to exist. Rental housing market dynamics will 
feel more like San Francisco than Stanley. And situations like 
the one that we've seen in Mountrail County recently will be 
more common.
    In Mountrail County, the county housing authority has had 
Section 8 vouchers go unused, not because families don't need 
the rent assistance, but because they've really struggled to 
find units that they can afford. Where--in communities where 
fair market rents, published by HUD, used to seem like a high 
rent, those communities now can only see those in their 
rearview mirror. They're really--the rent structure has changed 
very dramatically in a short period of time.
    So, what can the Federal Government do to help address the 
housing shortage in western North Dakota? There really is no 
silver-bullet, single-answer solution in a market that faces as 
much dynamism as this does. But, I think there are some things 
that can help facilitate public-private partnerships and help 
leverage private investment to create affordable housing in 
rural North Dakota.
    There are three general things that I wanted to mention. 
One is to continue programs that already work for rural 
housing. The second is make existing affordable housing tools 
work even better--for rural projects, in particular. And then 
the third is to help create new affordable housing. And I'll 
highlight just a couple of things in each of those areas.
    Continuing programs that work for rural housing. The USDA 
Rural Development has a number of products that really are very 
well suited to housing in rural communities, as you'd expect. 
The USDA Section 538 Rental Housing Guarantee which has been 
mentioned, I think holds real promise to providing long-term 
fixed-rate relatively low-cost financing for rural projects. We 
run into some practical difficulties with not very many lenders 
being able to originate those loans, or having the capacity to 
originate them. The State is working to help address that, 
but--there are always practical concerns, but it's a great 
program.
    The same with what's called the MPR Program, Multifamily 
Preservation and Revitalization. It's a USDA program that's in 
its fifth year as a pilot. So, it's still not a permanent 
program, but I would argue that the preservation of existing 
affordable housing is absolutely essential--in these markets, 
in particular. Once that affordable unit is lost, it's almost 
impossible to replace. And I'd say the units that HUD and the 
USDA have in these communities come with a rent subsidy, 
already. Once those units are taken out of the program, there 
is no replacement for that rent subsidy. We may be able to 
build new affordable units, but that rent subsidy is typically 
gone forever from those communities. So, I think preservation 
programs like MPR are really essential for rural affordable 
housing.
    The second is to make existing affordable housing tools 
work better for rural projects. And I'll just mention two items 
there. And these relate to the tax credit program--the Low 
Income Housing Tax Credit Program. It--tax credits haven't 
traditionally been a huge source of development capital in 
rural markets. But, I would argue that they could be a more 
major factor if there were a few changes made. And a couple of 
them are before Congress, actually, right now. I have a letter 
with me that I'd like to submit to you for the record that 
details those--the actual bill numbers and things. But, fairly 
simple, fairly revenue-neutral proposals that would really 
bring more investors into the tax credit program in rural 
markets. One is to allow people to carry back tax credits 5 
years. So, instead of having to predict out what a particular 
investor's tax liability is 10 years forward, the proposal is 
that you actually let people look back 5 and forward 5, and it 
gives a little bit more certainty, and entices non-CRA 
investors to get involved in the tax credit program. So that--
--
    The Chairman. Matt, would that have any interest to you?
    Ms. Thomasson [continuing]. Would expand it.
    Mr. Miles. No, sir.
    Ms. Thomasson. It's probably a different market.
    Mr. Miles. A different market.
    Ms. Thomasson. Yeah.
    Mr. Miles. We're single-family residential.
    Ms. Thomasson. Yeah, there are very few applications, I 
think, of tax credit with single-family. It's a possibility, 
but there aren't very many.
    The Chairman. OK.
    Ms. Thomasson. And then the second is actually just to 
allow S corporations to invest in tax credits. And it sounds, 
again, like a minor provision, but the Federal Home Loan Bank 
of Des Moines estimates that about 60 percent of community 
banks across the Midwest are organized in this fashion. Under 
the current rule, they can't invest in the tax credit program, 
even if they wanted to. So, allowing a greater number of people 
to invest and to leverage their capital could make a big 
difference.
    [The prepared statement of Ms. Thomasson follows:]

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    [GRAPHIC] [TIFF OMITTED] T8154.023
    

    The Chairman. Thank you all.
    Let me just go bing, bing, bing, down--right down the line, 
because we're time-challenged, in terms of getting to Watford 
City for the next hearing there.
    John, in your--from your experience, what could or should 
the Federal Government do or not do that would be most 
important?
    Mr. Boyd. I think help communities with their 
infrastructure needs.
    The Chairman. Infrastructure for those communities that 
have a high energy impact, something like that?
    Mr. Boyd. By something, you know, where the population has 
probably doubled----
    The Chairman. Yeah.
    Mr. Boyd [continuing]. In 3 years, maybe 4 years.
    The Chairman. And the infrastructure we're talking about 
would be water and sewer.
    Mr. Boyd. Yeah.
    The Chairman. OK.
    Matt, what's your assessment? What should we do--not do?
    Mr. Miles. Well, I would parrot Mr. Boyd's comments. I 
think that the Federal Government could assist in providing 
big-picture infrastructure--major sewer, major water, major 
road infrastructure--and then, you know, private developers, in 
the single-family world, will do the infill, the small streets, 
and whatnot. But, long term--as somebody brought up, a San 
Francisco-like atmosphere--long term, what we--what needs to be 
avoided is overtaxing or overstressing of existing systems, and 
then create some kind of situation where there has to be large 
impact fees in order to sustain.
    The Chairman. OK.
    So, what I'm hearing from the first two is a focus on the 
infrastructure piece of this.
    What say you?
    Ms. Thomasson. I would actually concur. I think, if you had 
to figure out something that would have a very immediate 
impact, it's figuring out how to help get that infrastructure 
in place. Because if there is no land to develop, there is no 
development that can happen, regardless of what programs there 
are.
    The Chairman. OK. Well, think we've got pretty good 
agreement.
    Ms. Thomasson. Yeah.
    The Chairman. Congressman Pomeroy.
    Mr. Pomeroy. I found this to be a very, very helpful panel; 
an important component of making today's hearing so 
informative, because Senator Conrad's on the Finance Committee, 
and I'm on the Ways and Means Committee. You've come up with 
tax incentive to help move things along, that's right in our 
wheelhouse, so I will be very interested in further information 
you have on those programs.
    And I hear you loud and clear on--it's expensive to build 
out infrastructure, but before you have the infrastructure, you 
can't have a lot of the housing that we need to get 
constructed. So, clearly, I think, at State and Federal levels, 
we've got to be attentive to that.
    Thank you very much.
    The Chairman. If I could just ask--Mayor Hynek is still 
here. I don't know if Mayor James is still here.
    [Laughter.]
    The Chairman. You going to play the piano?
    Mayor James still here. And Ward's still here.
    Let me just ask you quickly, for the record--we've heard 
from this panel, really strong consensus that Federal 
Government's most useful role would be in infrastructure. Would 
you agree with that? This is Mayor Hynek I'm addressing the 
question to.
    Mr. Hynek. Yes, I would agree with that. We are--we're up 
against it, on a couple of real important items in our city, 
and we just simply don't have the funds available at this point 
in time to----
    The Chairman. OK. And you've got that debt-limit issue.
    Mr. Hynek. Yep.
    The Chairman. Right?
    OK. Mayor James?
    Ms. James. Yes, we would strongly agree with that, too.
    The Chairman. All right. Mayor James agrees, for the 
record.
    Was our recorder able to get that? OK. OK, I want to make 
sure we capture this.
    Mayor Koeser?
    Mr. Koeser. Yes, definitely. That's the big issue. If you 
have to try to put the cost of that major infrastructure--first 
of all, it goes into the price of the lots at some point, which 
makes them cost prohibitive, so then you get away from--we need 
affordable housing, and that is more difficult. We have to put 
in--and infrastructure is extremely expensive right now.
    The Chairman. OK. Thank you all.
    We've got to wrap this up, to get to the next hearing in 
time.
    I very much appreciate the contribution of all the 
witnesses.
    Thank you, to our Federal officials who've come. I've heard 
you--hope you've heard, loud and clear, what these witnesses 
have told us.
    Mr. Pomeroy. Mr. Chairman, for the record--it's a little 
off-topic, but an announcement--I just became aware of this in 
the course of our discussion--that Governor Art Link died this 
morning. And, clearly, there have been no finer example of 
statesmanship, common sense--prairie decency, Alexander, North 
Dakota, native, led our State through a period of extraordinary 
development pressures during his time in leadership. And ask 
that we remember Grace and the family in our payers. And keep 
Governor Link's example in mind as we look at how to work our 
way through the challenges we've been talking about today.
    Thanks, Senator.
    The Chairman. I'm glad you mentioned it. And I think now 
it's public. So, missed--a very fine man, just turned 96 years 
of age on the 24th. So, he got to see his 96th year. And I know 
he was looking forward to being with his----
    [Whereupon, at 2:30 p.m., the hearing was adjourned.]


FIELD HEARING ON INFRASTRUCTURE INVESTMENTS: PROMOTING ECONOMIC GROWTH 
            AND IMPROVING SAFETY ALONG THE U.S. 85 CORRIDOR

                              ----------                              


                         TUESDAY, JUNE 1, 2010


                                       U.S. Senate,
                                    Committee on the Budget
                                         Watford City, North Dakota
    The Committee met, pursuant to notice, at 3:28 p.m., 1st 
International Bank Building, 120 North Main Street, Watford 
City, North Dakota 58854, Hon. Kent Conrad, Chairman of the 
Committee, presiding.
    Present: Senator Conrad.
    [presiding].

              OPENING STATEMENT OF SENATOR CONRAD

    The Chairman. I'll bring the hearing to order.
    We've just received the sad news that Governor Link passed 
away this morning. And so, I'd ask that we observe a moment of 
silence in his memory.
    [A moment of silence was observed.]
    The Chairman. Thank you.
    Governor Link--we are going to miss a great man, and our 
thoughts and prayers go to Grace and the family. We are told 
that a service may be on Saturday. And we await further news on 
that. But, we appreciate everybody's showing their respect for, 
really, a remarkable man.
    Thank you all very much for being here today. This is 
actually the third hearing that I've held now, on Highway 85. I 
did two hearings last year--one in Williston and one in 
Dickenson. Gene was out to see me recently, and we talked about 
the benefit of doing a hearing in this location, as well, to 
try to rivet the point of the importance of upgrades to Highway 
85. And that's why we're doing this hearing today.
    I want to welcome everyone to this hearing, especially 
welcome my good colleague Congressman Pomeroy, who has been 
able to join me here today.
    This is a hearing--official hearing of the Senate Budget 
Committee. And as a result, we will be operating under the 
rules of the U.S. Senate, and an official record of this 
hearing is being kept.
    The title of this hearing is ``Infrastructure Investments 
Promoting Economic Growth and Improving Safety Along the U.S. 
85 Corridor.''
    I want to begin by welcoming our distinguished witnesses 
today. We have two panels.
    Our first panel includes our distinguished and excellent 
director of North Dakota's Department of Transportation, 
Francis Ziegler; and Watford City mayor, Kent Pelton. That's a 
very good first name. And the last name is good, too.
    Our second panel will include McKenzie Country sheriff, Ron 
Rankin; and McKenzie County Job Development Authority executive 
director, Gene Veeder; and Rugged West Trucking operations 
manager, Bruce Erickson.
    I appreciate all of the witnesses being here today, and I 
look forward to hearing from you all.
    The timing of this hearing is especially important because 
this Friday I will be convening a Transportation Committee 
transportation summit in Bismarck with the Secretary of 
Transportation, Mr. Ray LaHood. The summit is part of the 
Secretary's nationwide tour to solicit feedback from local 
communities as the administration puts together its highway 
bill. I want to make certain that we are able to share with him 
your concerns about what is happening in this corridor.
    I also want to be able to lay on the record, as best we 
can, the substantive case for improvements on Highway 85. I 
believe we have a very powerful case to make. We want to make 
certain we leave no stone unturned in our attempt to make that 
case persuasively.
    As I have indicated, this is really the third hearing I've 
done on the subject, and I very much appreciate the Secretary 
of Transportation, our North Dakota commissioner, for 
participating in those hearings, as well; and also appreciate 
their dedications of additional resources last year to address 
several stretches along Highway 85, improvements that will be 
made to make this a ``super-2'' highway, providing passing 
lanes and other enhancements between Williston and Watford 
City, as part of its 2010-2013 construction plan. I think all 
of us know that more needs to be done, that this is an area 
that is developing so rapidly that it's really hard to keep up 
with what needs to be done. But, we need to put a focus on 
those needs and urge everyone at the Federal and State level to 
help us accomplish the improvements that we really desperately 
need in this corridor.
    This map shows why Highway 85 is so important to the energy 
production in our State.

[GRAPHIC] [TIFF OMITTED] T8154.347


    We have major gas plants and oilfields scattered up and 
down this road. We need to ensure that Highway 85 has the 
capacity to handle the increased activity.
    The oil boom in the Bakken Formation has dramatically 
increased oil production in this part of the State.

[GRAPHIC] [TIFF OMITTED] T8154.348


    This chart, if we go to the next one, shows the really 
dramatic increase, as we've gone to production of 8.6 million 
barrels a month, as of March of this year. With further 
production in the Bakken and the discovery of the Three Forks 
Formation, we can expect additional production in this area.
    Let's go to the next slide, if we can, Matt.

    [GRAPHIC] [TIFF OMITTED] T8154.349
    

    Highway 85 represents a critical lifeline for this energy 
development. Specifically, 400,000 barrels a day are produced 
in the corridor, and a large percentage of it is hauled over 
Highway 85 to tank farms for transport via pipeline. And the 
400,000 barrels a day I'm referencing here is not only 
production in North Dakota, but, obviously, in Montana, as 
well.
    The highway connects six major east-west highway systems 
that service these energy developments. And the highway serves 
as a major route for the transport of oil rigs, pipes, steel, 
and supplies. And all of us who have driven up and down Highway 
85 have encountered those trucks. My grandfather used to say, 
``Hill, truck, curve--hill, truck, curve.'' And we've all 
experienced that on Highway 85.
    We also have significant and growing manufacturing and 
agriculture businesses in this area that rely on Highway 85 to 
transport their products.

[GRAPHIC] [TIFF OMITTED] T8154.350


    The result is that Highway 85 has seen a huge spike in 
truck traffic. Truck traffic on 85 near Watford City increased 
44 percent between 2005 and 2009. Unfortunately, the highway 
was not designed to handle these loads--the increasing number 
of heavy trucks, the oversized loads that travel on them. And 
as a result, the road needs improvements to foster continued 
growth, and to better serve the communities in the area, and to 
ensure a safe travel route. I want to emphasize, safety is of 
increasing concern.
    Let's go to that next slide, if we can, Matt.

    [GRAPHIC] [TIFF OMITTED] T8154.351
    

    With the growing traffic and wear and tear on the area 
roads, we have seen a disturbing increase in the number of 
crashes. In 2000, there were 86 crashes on McKenzie County 
roads, with one fatality. Last year, there were 162 accidents, 
with eight fatalities. Several of those fatalities occurred on 
Highway 85. I'd like to hear from our witnesses what we can do 
to make Highway 85 safe.
    As I noted, now is an important time to focus on our 
transportation infrastructure, because the new highway bill is 
beginning to be developed. It's worth remembering that North 
Dakota benefited greatly from the last bill. As a conferee on 
that bill, one of the negotiators between the House and the 
Senate, I made certain that North Dakota received significant 
funding for our highways and transit.

[GRAPHIC] [TIFF OMITTED] T8154.352


    In that bill, we received $1.5 billion, a 31-percent 
increase over the previous bill. Annually, that averages out to 
$234 million for highways, with additional funding provided for 
transit. We did very well, in comparison to other States, 
receiving $2 for every dollar we send the Federal Government. 
That put us in about fourth place in the country, among the 
States, in terms of our return for dollars sent Washington. In 
other words, only three States did better than we did in 
getting dollars back from the Federal Government. And we think 
that's fair, given the fact that we are a rural State, we're a 
big State, and yet, we are a State that is critically important 
to the country. We're important for our agricultural 
production, for our energy production, and for our national 
defense contributions made by our bases.
    I also fought hard to have Highway 85 designated a high-
priority corridor. That designation means that Highway 85 is 
eligible for special corridor funding from the Federal Highway 
Administration. And we're going to need to bring this to the 
attention of our friends from the Federal Highway 
Administration that will be here on Friday with the Secretary.
    In terms of the next highway bill, I will be focusing on 
these priorities:

[GRAPHIC] [TIFF OMITTED] T8154.353


    I believe the next bill must identify sufficient funding so 
that the infrastructure investments are secure and robust over 
the longer term. States and communities must be able to rely on 
them. In other words, we've got to have a stable and secure 
funding source.
    Next, any new highway bill must maintain recognition that 
rural transportation needs are vital to the Nation.
    And finally, I'll fight to secure funding from long-term 
investments for our nationally important corridors, like 
Highway 85.
    So, I'm particularly interested in hearing from our 
witnesses today on the immediate investments that are needed in 
Highway 85, and what future investments are required to support 
the growth in this area and the safety of those using this 
road.
    With that, I want to turn to my able colleague, Congressman 
Pomeroy, for his opening remarks. And then we'll go to the 
first panel.
    Congressman Pomeroy, by the way, serves on the very 
powerful Ways and Means Committee, in the House, that plays 
such a significant role in funding any highway legislation, and 
so, will play a critically important role in the energy future 
of our State.
    Congressman Pomeroy.

STATEMENT OF HON. EARL POMEROY, U.S. REPRESENTATIVE FROM NORTH 
                             DAKOTA

    Mr. Pomeroy. Senator Conrad, thank you very much. I'm very 
pleased to join you on today's hearing.
    As we looked at our respective recess work schedules, we 
were each going to be in the northwestern part of the State, we 
were each going to be focusing on infrastructure and housing, 
and it just made sense to combine the meetings. I'm very 
pleased you are adding a bicameral flair to this hearing by 
including a House guy.
    We understand that our local leaders, under the crush of 
development, are so busy. We didn't want to take any more of 
your time than required. But, we absolutely need to have a 
vigorous back-and-forth with you during this period of time so 
that we fully understand the rapidly changing circumstances 
that you're dealing with and we identify the Federal areas that 
can play an important role in helping in this period of time.
    I thought Highway 85 made sense as a high-priority area 
long before I knew much about the Bakken play. I felt like the 
possibilities--major north-south area--the delegations that 
have come in to see me, including even representatives as far 
as Texas, along a route that could be hooked up in this 
fashion, made an awful lot of sense.
    But, what has become a rational, national highway artery 
strategy has now given way to a development impact that has 
presented urgent demand to build out this infrastructure and 
improve it to four-lane capacity, to the fullest extent we can.
    I'm very pleased Brad Bekkedahl, a city commissioner in 
Williston, able to come down Watford City for this meeting. He 
was a driving force for many, many years in pushing Highway 2 
to move from two-lane to four-lane. Finally, with a very 
successful fight won in the highway bill, we were able to have 
the resources to make that move and summon the political will, 
as a State, to get it done. Brad--when it comes to making two-
lane roads--four-lane roads, I'd start with Bekkedahl as a guy 
you want to confer with.
    So, I'm very please you're here.
    The last thing I would mention relates to the remarks that 
Senator, and chairman, made, relative to our dear friend Art 
Link, now departed. I was at a public event with him 2 weeks 
ago. He summoned me to the table. He wasn't as mobile as he 
once was, but just sharp as a tack. And he talked to me about 
highways up in this area, and specifically Highway 85, running 
through his old home territory. I promised him that I would 
come and see him--come to he and Grace's apartment--and we were 
going to talk about the impact on Highway 85.
    So, I believe that, even as we internalize this news, that 
our Governor has left us, at the age of 96, we do honor to his 
memory in two ways today; one, by continuing the public work. 
If there's one thing Art Link stood for, he was a public man 
and cared about the greater good. So, I think that every one of 
you who has spent the time and distance to travel here does 
honor to Governor Link, his memory, today.
    And then, specifically, because the last thing he wanted to 
talk to me about was Highway 85, and I--we had an exchange on 
the topic for a couple, 3 minutes at this event, looking 
forward to the longer conversation that will never happen. I 
believe, by specifically focusing on this issue, we will be 
doing precisely what Governor Art Link would want us to be 
doing this afternoon.
    So, thank you for including us, Senator.
    And on to business.
    The Chairman. Thank you. And that's a special--gives 
special relevance to the hearing.
    I also, before we go further, want to recognize Lance 
Gaebe, who is here as deputy chief of staff of the Governor.
    Lance, thank you very, very much for joining us. And I 
think that sends a signal of the Governor's interest in this 
subject, as well. So, thank you very much for taking your time 
to be here, as well.
    With that, we'll turn to our first panel. And we'll start 
with director of North Dakota's Department of Transportation, 
Francis Ziegler.
    Let me just say, one of the things I am especially 
appreciative from Francis, of being here, is--Francis has a lot 
of credibility in Washington with my colleagues. And when we 
have a hearing and Francis is involved in it, it confers 
additional credibility on the case that we're trying to make. 
So, I am especially appreciative that he's here today.
    Director Ziegler.

  STATEMENT OF FRANCIS ZIEGLER, P.E., DIRECTOR, NORTH DAKOTA 
                  DEPARTMENT OF TRANSPORTATION

    Mr. Ziegler. Mr. Chairman, Congressman, good afternoon.
    I'm Francis Ziegler, director of the North Dakota 
Department of Transportation. And I want to thank you for the 
opportunity to appear before the committee today. And thanks 
for your interest in improving transportation in North Dakota.
    Today, I'd like to address a number of broad transportation 
issues that you've already touched on, and on Highway 85 
Corridor, as well as some of the other roads in the immediate 
area that we've been working on.
    North Dakota has been working hard to improve 
transportation. Transportation infrastructure investment 
results in many benefits: creates jobs, strengthens the 
economy, improves safety, and improves mobility for citizens 
and businesses.
    The Department of Transportation recently held public input 
meetings across the State to discuss transportation. 
Preliminary input illustrates the following: Residents want 
more infrastructure, and that's across the State. Residents are 
concerned about traffic increases, especially in western North 
Dakota, due to the energy industry. And public expectations are 
growing for load-carrying capacity and wider roads.
    The State of North Dakota increased its financial 
commitment to transportation infrastructure with a $1.35-
billion transportation funding bill. This year, the Department 
of Transportation has the largest construction season in the 
history of the department, with approximately $423 million in 
projects on nearly 2,000 miles of roadway, statewide. Projects 
include regular Federal aid, stimulus, emergency relief, and 
State funding.
    Specific to the energy-area projects, in the energy area, 
there are many transportation investments to be completed 
between 2010 and 2013.
    The first map that I have up here--it's part of the 
attachment--shows the immediate area. You--and you can see 
that. It's the map on your right, Senator. More than $60 
million will be contracted for improvements to the U.S. Highway 
85 Corridor, which includes a super-2 concept between Watford 
City and Williston.
    We're going to be adding safety improvements. We're adding 
a three-lane section that includes intermediate left- and 
right-turning lanes from Highway 2 to the Missouri River, which 
is about 2--just a touch over 2 miles, just south of Williston, 
south of Highway 2. Adding several turn lanes and numerous 
intersections between the Missouri River and Highway 200 East, 
which is south of Watford City.
    We're regrading the section south of the Long X Bridge, 
located south of Watford City. And a climbing lane will be part 
of that new regraded section.
    On the Highway--in addition to that, we're going to be 
doing a lot of other work on Highway 85. We're doing 
microsurfacing, which is to get rid of any ruts that might have 
occurred, depressed cracks, and those types of things, that 
are, as you say, due to the heavy loads. So, we'll be--also be 
doing that.
    But, in other areas, on Highway 23 we'll--next year, we'll 
start regrading and adding a new asphalt paving west of the 
Four Bears Bridge. Overlay and rumble stripes, will be added 
this year, east of New Town. And turn lanes will be added at a 
number of intersections east of New Town this year. And 
reconstruction is in the future for the city of New Town, 
within the city limits.
    On Highway 8, we'll be widening and regrading north of 
Stanley. That road is breaking up badly now; and so, rather 
than just doing an overlay, we're going ahead with regrading 
that portion, too.
    Other safety projects: We're lowering speed limits on 
various highways in this area. We're installing rumble stripes 
in the Williston district in 2010. And, on all two-lane 
highways, include shoulder and centerline throughout the entire 
State in the next 3, 4 years, depending on how the funding 
comes in.
    Rumble stripes have been shown to be a real safety effort 
that many States have been using in the past, and have found it 
to be very successful. I've had a lot of comments on the rumble 
stripes that we already have in North Dakota, and that they're 
working very well.
    DOT is also working in partnership with the Petroleum 
Council to create additional programs to promote safety on 
highways, especially in the western part of the State.
    While the State of North Dakota is doing more than ever, 
Federal investment in transportation is critically important. 
Federal aid accounts for 52 percent of the current biennial 
construction budget, and that's without ARRA. It's, therefore, 
critically important that legislation reauthorizing the Federal 
Highway Program serve the needs of rural States like North 
Dakota.
    And, Senator, we're very pleased that the--Secretary of 
Transportation LaHood will be in Bismarck, as well as Victor 
Mendez, the Federal Highway Administrator, so that we can visit 
with them about some of the issues we're facing as rural 
States.
    A strong----
    The Chairman. Can I----
    Mr. Ziegler. Federal----
    The Chairman [continuing]. Stop you on--right there, 
Francis, just for the record?
    Fifty-two percent is Federal aid, not counting the Recovery 
Act money. What is it with the Recovery Act figured in for the 
years that it's available?
    Mr. Ziegler. Senator, with the Recovery Act, it's 57 
percent.
    The benefits from transportation infrastructure investment:
    First, job creation. Jobs are created on projects. They're 
created in supplier and support industry. They're also a boost 
to the general economy from onsite and supplier jobs.
    As you can see from the second map, many projects are 
completed--and that's this map right here, to my left--many 
projects are completed and planned with transportation 
investments covering the entire State. These projects create 
jobs, and positively affect economic development throughout 
North Dakota. And the way they affect economic development is 
by us being able to move loads. We have a strong ag economy, we 
have a strong energy economy. And those two are heavy users of 
our transportation system. So, it's important that we keep 
pushing for the funding.
    Safety is another benefit. Preserving and improving roads 
in pursuit of smooth surfaces, appropriate roadway width, 
guardrail, signage, and pavement marking is essential in our 
mission of the DOT providing a transportation system that 
safely moves people and goods. These investments are also 
important to the economic competitiveness of North Dakota and 
the Nation.
    The needs are there to justify increased investment. 
Various commissions and reports have called for increased 
surface transportation infrastructure investment. Our AASHTO 
Association has recommended, for a 6-year period of 2010 to -
15, proportional increases in highway and transit programs over 
the next 6 years, of $375 billion and $93 billion, 
respectively, for those programs. It's essential that rural 
States like North Dakota participate at least proportionately 
in any growth of the Federal Highway and Transportation 
Program, both as to formula and other funds.
    The authorizing committee in the House of Representatives 
has outlined a partial legislation. This outline apparently 
calls for increases in Federal Highway program authorizations 
of about $110 billion over the next 6 years, compared to the 
last 6 years. We're concerned about proposals with programs for 
metro areas with a population of over 500,000 or more--large, 
nationally significant projects--highspeed rail and 
infrastructure banks. We prefer that increased funding be 
provided to highway formula programs.
    We recognize--and it's important that I indicate this--we 
recognize that there are major needs in urban areas. However, 
we just don't want rural States to be forgotten.
    In short, even though all details of this bill are not set, 
we're very concerned that the House legislation would provide 
North Dakota with considerably reduced share of transportation 
program dollars, compared to the current law.
    The highway industry has been hit by inflation during the 
past decade. From 2001 to 2010, inflation has gone up about 87 
percent. And so, we've lost some spending power there.
    Now I'd to say how the Nation benefits from Federal 
transportation investment in and across rural States. Reasons 
why are that, first of all, rural States serve as a bridge for 
truck and personal traffic. They enable ag exports and serve 
the Nation's ethanol production and energy extraction 
industries, are a lifeline for remotely located and 
economically challenged citizens, and enable people and 
business to traverse the vast tracks of sparsely populated 
land. In addition, the Federal aid system, extending beyond the 
NHS, enables ethanol--enhanced investment needed to address 
safety on rural roads.
    Moving beyond----
    The Chairman. We can put a word in for ethanol, too.
    Mr. Ziegler. Yeah. There you go.
    The Chairman. That's OK.
    Mr. Ziegler. That would be twice, now.
    [Laughter.]
    Mr. Ziegler. Essential service--on page 5--essential 
service to agriculture, natural resources, and energy.
    Governor Hoeven's economic strategic plan has identified 
ag, energy, advanced manufacturing, technology-based 
businesses, and tourism as growth industries, because North 
Dakota holds a competitive advantage in these areas. These have 
been the focus of much of North Dakota's investments in 
economic development. Ag is one sector of the economy where the 
United States has consistently run an international trade 
surplus and not a deficit.
    North Dakota is a major contributor of energy production in 
the State. Good roads throughout the State are important to our 
Nation becoming energy-independent and providing agricultural 
products to feed the world.
    Over the past three decades, and nationwide, railroad 
branch lines have been abandoned. Over 1500 miles were 
abandoned in North Dakota. The reduced reach of the rail 
network means many areas, particularly rural areas, must rely 
heavily on trucks to move the goods. With increased truck 
traffic, it's a challenge for us to continue to move the 
products. The challenge is compounded by the necessity of 
imposing spring load restrictions. The underlying reason for 
imposing spring load restrictions is inadequate roadway 
thickness. Like congestion, load restrictions slow down 
commerce and add greatly to the cost of doing business.
    Funding and financing considerations: North Dakota faces a 
number of serious obstacles in preserving and improving the 
highway system within their borders. We're very large, we're 
very rural, we have low population densities, and have 
extensive highway networks. These factors make it very 
challenging for rural States to provide, maintain, and preserve 
a modern transportation system that connects to the rest of the 
Nation.
    We also ask your help to avoid increases in regulatory 
requirements. The next authorization bill should not make 
Federal Highway Program delivery more complicated. We do 
support the Federal Highway Administration's initiative of 
``Every Day Counts'' to streamline the project development 
process. Additional rules and regulations will add time to 
program and project delivery costs. Senator, the Every Day 
Counts is a brainchild of Victor Mendez, the Federal Highway 
Administration director, and we certainly do support that.
    One area where new regulation--concerns performance 
standards. I am on a task force of AASHTO regarding performance 
standards. And we use performance standards in North Dakota. 
And we certainly support performance standards. But, what we 
believe is that each State should be allowed to establish its 
own specific targets for those performance measures.
    We're a strong supporter of the approach to program 
delivery and current law, and that most funds are apportioned 
to the States. And we conduct public outreach and then 
prioritize project selection. We think rapid growth in 
discretionary Federal programs should be avoided.
    Transportation is a good investment. Many people have 
invested in new forms of communication in their home, spending 
more than ever before on items such as cell phones and 
Internet. Today an individual consumer will spend up to $500 a 
year on a cell phone bill compared to the national average of 
$109 for transportation. So, I say, transportation is a very 
good investment.
    In conclusion, it's essential that Congress, through the 
reauthorization process, recognize that increased Federal 
investment in highways and surface transportation in rural 
States is, and will remain, important to the national interest. 
The citizens and businesses of our Nation's more populated 
areas, not only residents of rural America, benefit from good 
transportation network in and across rural States like North 
Dakota. With such legislation, we'll be better equipped to 
address transportation issues on the U.S. 85 Corridor, as well 
as elsewhere in North Dakota.
    Senator that concludes my comments. And I will be happy to 
answer any questions you may have.
    [The prepared statement of Mr. Ziegler follows:]

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    The Chairman. Thank you, Director Ziegler, for your always 
excellent testimony.
    Typically, we would go to Mayor Pelton next, but, for the 
purposes of this record, I hope, Mayor, that you'll indulge us 
as we direct a series of questions to the Director, because I 
want to have this record, with respect to his testimony, all in 
one piece. And I--because I think that's important for the 
purpose of our colleagues.
    First of all, Director Ziegler, do you have an estimate of 
how many jobs are created for every billion dollars that's put 
into the transportation infrastructure?
    Mr. Ziegler. Senator, yes I do. That number was 35,000 jobs 
for each billion dollars. And I believe, now, with some of the 
inflation factors, it's in the neighborhood of 29,000 jobs per 
billion dollars invested.
    The Chairman. So, for every billion dollars we put into the 
national transportation infrastructure, the most recent, 
credible, objective estimates is that creates 29,000 jobs. Is 
that correct?
    Mr. Ziegler. That is correct, Senator.
    The Chairman. And that's 29,000 jobs that are created in 
America. Wouldn't that be the case?
    Mr. Ziegler. That's correct.
    The Chairman. So, when we look at places where Federal 
expenditure creates jobs, this is a good place to look. And I'm 
talking about American jobs.
    No. 2, when we look at a place that helps our competitive 
position in the world, this is also a good place to look.
    So, to me, this is a place where you get a double bang for 
the buck; you get American jobs and you get improved 
competitive position for American industry. And isn't that what 
you have found, as well, Director Ziegler, that it is important 
to improving the competitive position of the United States that 
we improve the efficiency of our transportation system?
    Mr. Ziegler. Mr. Chairman, that's very correct. In fact, at 
the Department of Transportation, we often say that you can't 
have an economy without good transportation.
    The Chairman. I've often wondered--you know, as we travel 
across North Dakota, and we see the delays on a highway like 
85--you go to Washington--if you go out on, the highway system 
in Washington, D.C., after 4 o'clock in the afternoon: stopped 
dead. What is the cost to this Nation of the delays of moving 
goods and services because our transportation infrastructure 
has not kept up?
    I believe it would be in the tens and hundreds of billions 
of dollars that we're losing in competitive position.
    Director Ziegler, do you know if AASHTO or any of your 
other related organizations have done a calculation on what the 
cost to the Nation is of not keeping up with our 
infrastructure?
    Mr. Ziegler. Mr. Chairman, you're correct, it's in the 
billions, but I can't recall that number right now. It's in one 
of the AASHTO publications, and I would certainly get----
    The Chairman. If you could----
    Mr. Ziegler [continuing]. That for you.
    The Chairman [continuing]. Provide that for the record, I 
think it'd be very useful.
    The Chairman. Third question I want to go to--and, again, 
it's very important for the record, again, because we're going 
to have the Secretary of Transportation in Bismarck on Friday--
the recommendation that your organization is making nationally 
for the next transportation bill--could you repeat those 
numbers? How much money you believe is important to put into 
the next transportation bill? That'd be a 6-year bill.
    Mr. Ziegler. Mr. Chairman, our association, AASHTO, 
American Association of State Highway and Transportation 
Officials, has recommended a $375-billion investment in roads 
and bridges, and a $93-billion investment in transit.
    The Chairman. So, the--and the $375 billion in the 
transportation part of the bill--that's roads and bridges----
    Mr. Ziegler. That is correct.
    The Chairman [continuing]. That's 6-year--that's a 6-year 
total, is it not?
    Mr. Ziegler. That is correct, Mr. Chairman.
    The Chairman. And the $93 billion in transit is also a 6-
year total, is it not?
    Mr. Ziegler. It is.
    The Chairman. So, that is $468 billion, the combined cost 
of those two programs, in terms of the recommendation that your 
organization is making to us.
    And can you tell us, over that period, how much the Highway 
Trust Fund will produce in revenue?
    Mr. Ziegler. Currently, the Highway Trust Fund is producing 
$31 billion a year.
    The Chairman. So, correct me if my math is wrong, but that 
tells me: $186 billion. So, that's a shortage of $282 billion, 
if we're going to fully fund this legislation and pay for it so 
it doesn't get added to the deficit or the debt. Is that 
correct?
    Mr. Ziegler. That is correct.
    The Chairman. So, somewhere we've got to find--if we're 
going to have a transportation bill that meets the needs of 
this country, we're going to have to find an additional funding 
source of $282 billion over the next 6 years.
    Mr. Ziegler. That is correct.
    The Chairman. And it's the position of your organization, 
AASHTO, the national organization, that this bill be paid for.
    Mr. Ziegler. That is correct.
    The Chairman. That we not just put it on the charge card, 
we don't just add it to the deficit, that we pay for it.
    Mr. Ziegler. Correct.
    The Chairman. And I--as the Budget Committee chairman, I 
strongly believe that is imperative.
    I wanted to get those elements of testimony on the record.
    Final point that I want to raise--and then we'll turn it to 
Congressmen Pomeroy--is the question of Highway 85. You've 
given an excellent review of what is the plan, going forward, 
with the funds available. And that's $60 million of projects 
that will enhance the efficiency of this road network and the 
safety of this road network. And--have I got the number 
correct?
    Mr. Ziegler. That is correct.
    The Chairman. And over what period is that $60 million?
    Mr. Ziegler. That $60 million is between 2010 and 2013.
    The Chairman. If you had additional funding, in terms of 
what you see as the need in this corridor, how much additional 
funding would you require?
    Mr. Ziegler. Currently--Mr. Chairman, currently the 
Department of Transportation, as well as the corridor group, is 
looking at a corridor study. And that corridor study is not 
complete. And we're looking to get that completed very soon.
    When we took the action to go to the super-2, it was 
because I already had enough information to know that we need 
it. Traffic had increased to the point where we needed to do 
something quicker than we could have if we'd have waited for 
the corridor study, and waited for some very lengthy 
environmental documents.
    But, we'll be looking at that corridor study to give us an 
idea of where to move next.
    The Chairman. Do you have any idea of what that corridor 
study might tell us, in terms of the additional cost?
    Mr. Ziegler. In terms of additional cost, I--Senator, I 
don't know exactly, but I can share this with you, that what 
we're doing an environmental document on, and that which we are 
now designing, the passing lanes, the super-2 concept, is in 
excess of a million dollars a mile.
    The Chairman. A million dollars a mile.
    And from Williston to Watford City, what's that mileage?
    Mr. Ziegler. It's actually, in round numbers, 40 miles. 
But, when I say a million dollars a mile, it's a million 
dollars per constructed mile. I looked at the designs this 
morning, and we're doing six passing zones between here and 
Williston, and then six passing zones coming back again. So, 
they will be in excess of a mile long each. And I believe the 
latest estimate chief engineer Grant Levi gave me was, this 
total corridor cost will be about $66 million. Actually, the 
costs have gone up----
    The Chairman. Well, how----
    Mr. Ziegler [continuing]. Because we've lengthened some of 
those transitions and added one more passing zone.
    The Chairman. So, how much is that?
    Mr. Ziegler. Sixty-six million dollars----
    The Chairman. Sixty-six million.
    Mr. Ziegler [continuing]. That we're actually going to be 
investing in. And he just got that number this morning. But, 
it's all because of the passing lane, and the cost----
    The Chairman. Sixty-six million.
    Mr. Ziegler [continuing]. Has gone up on some of those----
    The Chairman. Could you----
    Mr. Ziegler [continuing]. Because we've added the 
transition and the length of each one, to make sure that you 
can get enough passing distance.
    The Chairman. Let me just say, most of the people I talk to 
in this area believe very strongly we need four lanes here. I 
believe that. If we were to go to four lanes, what would that 
cost be?
    Mr. Ziegler. The latest numbers are unbelievable; they're 
$2 million for each mile of road. They've gone up that high.
    The Chairman. Wow. It just keeps moving up on us, doesn't 
it, the cost of all these things? The inputs to--everything on 
highway construction is going up much faster than the 
underlying rate of inflation.
    All right. I--so, let's just, for the--so we capture it on 
the record--if we were to four-lane 85 in this highest-traffic 
corridor, what would that total cost be?
    Mr. Ziegler. I believe it's 186 miles. It'd be--times 2----
    The Chairman. Three hundred and seventy-two million 
dollars.
    Mr. Ziegler. Yes. And that's--of course, those are today's 
numbers. That--the inflation rate has subsided a little bit, 
between 2009 and 1910. But, it's still progressing at about 
an--8 to 9 percent per year. And that's typically because of 
fuel and asphalt costs.
    The Chairman. So, it's--keeps going up 8 to 9 percent a 
year.
    Mr. Ziegler. That is correct.
    The Chairman. Well, I'm very glad that we've got this on 
the record, because I want to bring this directly to the 
attention of the Secretary of Transportation. You'll be there--
--
    Mr. Ziegler. Yes, I will.
    The Chairman [continuing]. On Friday. I think it is very 
important that we lay out to them what we're looking at, in 
terms of the cost, if this were to be done. We're not 
prejudging the corridor study. And you've got other priorities 
across the State. I certainly understand that; we all 
understand that. But, I think we can all see what's happening 
here. I mean, every time I drive out here, I mean, it's just--
just keeps moving. This traffic count is off the charts.
    Congressman Pomeroy.
    Mr. Pomeroy. I'll be brief, Mr. Chairman, so we can get to 
the local input, very important for this record.
    I think it mattered enormously that you were on the 
Conference Committee, representing the Budget Committee, but 
also looking after rural interests. And I'm anxious about a 
growing infatuation, in the House, with transit systems that 
might ultimately be placing, frankly, subways against highways.
    Director Ziegler, in your--within your association, how do 
you see that one breaking out?
    Mr. Ziegler. Congressman, our association supports keeping 
the same proportion between highways and transit that we 
currently have, which is about a 25-percent transit.
    Mr. Pomeroy. I think that's very important, as well. I 
mean, we--the--we have an awful lot of infrastructure to 
maintain, and--some folks like to think about the next thing 
we're going to build, but we've got a lot to maintain. If we 
don't maintain it, it's going to be far short of what serves 
the American public. But, as a national association, you have 
taken that position.
    Mr. Ziegler. That is correct.
    Mr. Pomeroy. The House proposal took a different route. Do 
you recall the statistics--the breakout?
    Mr. Ziegler. Congressman, the House proposal is closer to 
one-third for transit, rather than the 25 percent.
    Mr. Pomeroy. So, that, compounded with the donor- State/
donee-State ratios will give us plenty to talk about as the new 
bill is constructed.
    Mr. Ziegler. Congressman Pomeroy, I'm sure we'll be talking 
a lot about the donor/donee relationship, as my colleagues in 
the other States are already bringing that up.
    Mr. Pomeroy. I am surprised about the cost per mile. At $2 
million per mile, that's the highest cost I've heard. I'm not 
doubting the factual basis. I just want to know why. I might 
have thought, with the economy slowing up a little, that we'd 
have ten more of a buy. You hear about bid openings, where the 
public's getting a buy. What in the world happened with roads?
    Mr. Ziegler. One of the things, Congressman, is the fact 
that, when you take a look at a $2-million investment, you have 
to look at all the bridges that are between--you know, that are 
on this same roadway. Highway 2 cost us $125 million for about 
99 miles; let's--so, let's just say $1.2 million a mile. And 
that was without the bridges. Highway 2 had very few bridges; 
box culverts and, I believe, one or two bridges. I was in 
project development at the time. I'm sorry I can't recall all 
the bridges we had. But, Highway 85 has a whole lot more 
bridges than that, and a whole lot more tougher terrain. The 
terrain that we go through here is significantly more 
difficult.
    Mr. Pomeroy. OK.
    Mr. Chairman, that concludes my questions.
    Thank you.
    The Chairman. Thank you. And thank you, Director Ziegler. I 
wanted very much to have your testimony and the questions all 
tied together for the record so that we can excise that, give 
it to our Secretary when he's here, give it to others, so that 
it's all of a piece. And I thank you very much for it.
    Mr. Ziegler. Thank you.
    The Chairman. Next, we're going to go to----
    But, if you'd stay at the table, so that we--as we have 
local testimony that we could refer back to, Francis, for 
answers on questions that might come up.
    Mayor, thank you so much for being here. We appreciate very 
much your leadership, and appreciate your willingness to go on 
the record, with respect to the needs of the local community.

 STATEMENT OF HON. KENT PELTON, MAYOR, CITY OF WATFORD, NORTH 
                             DAKOTA

    Mr. Pelton. Senator Conrad, Congressman Pomeroy, 
congressional staff members, I want to thank you for bringing 
this congressional budget hearing to Watford City, and for 
giving me the opportunity to testify regarding the importance 
of transportation infrastructure to the communities along 
Highway 85 Corridor.
    In September of 2008, Senator Conrad spent the afternoon 
with us discussing the many concerns that we have in western 
North Dakota. The issue of highway funding was a major concern 
then, and is even more so today, with the additional traffic, 
especially with increased large tankers and semitrailers.
    Again, my name is Kent Pelton. I proudly serve as Mayor of 
Watford City. For 33 years, I was a vocational agriculture 
instructor at our high school. And, currently, I acquire 
surface-use agreements for well sites, pipelines, access roads 
here in the Williston Basin. I drive Highway 85 several times 
every week.
    It is interesting to note that today's topic focuses on 
transportation of goods and services along a corridor that 
brought the first settlers to this community. The Long X Ranch, 
the largest and most famous cattle ranch McKenzie County, is 
synonymous with cattle drives in the era of open range in 
Dakota Territory.
    In their quest for grazing land, the Reynolds brothers 
drove their first herds from Texas north toward Montana in the 
spring of 1884. Hearing reports of stirrup-high grass, the 
brothers brought with them 4,000 longhorns into the Badlands of 
North Dakota. This is said to be the first herd of longhorns in 
the area.
    The Reynolds established a ranch, in the mid-1880's, 
southwest of here, near the North Unit to Theodore Roosevelt 
National Park. By 1888, the Reynolds were bringing three herds 
a year into the Dakota Territory.
    They named their ranch for their official brand, the Long 
X, which was one of the first two brands recorded in North 
Dakota. Much of the Long X Ranch is now part of the North Unit 
to Theodore Roosevelt National Park. And the name and history 
of the Long X lives on through the U.S. Highway 85 Bridge along 
the Little Missouri River.
    Highway 85 Corridor, which includes the Theodore Roosevelt 
Expressway, connects many of the most notable names in U.S. 
history. Lewis and Clark, Theodore Roosevelt, Sitting Bull, 
George Armstrong Custer are synonymous with western North 
Dakota and South Dakota. This corridor brings tourism--tourists 
along the Theodore Roosevelt Expressway from Mount Rushmore, in 
the Black Hills, to Theodore Roosevelt National Park, and to 
historic sites along the confluence of the Missouri and 
Yellowstone Rivers, where Lewis and Clark left, in search of a 
passage to the ocean, and where Sitting Bull surrendered.
    Today, the home--the region is home to what the U.S. 
Geological Survey calls ``the largest continuous oil 
accumulation it has ever assessed.'' With 4.35 billion barrels 
of recoverable oil in place, the Bakken, as you said, is the 
huge play for domestic oil companies and individual investors. 
Geologists and oil industry officials are saying that we have a 
second Bakken that could literally double the Bakken's already 
prolific output, the Three Forks Sanish Formation lying 
directly underneath that Bakken Formation.
    As we saw earlier in your testimony, daily production for 
Bakken wells in the Williston Basin exceeds 270,000 barrels of 
oil from 4500 wells. The Basin has over 100 rigs today 
searching for oil. And the highway system supports of over 300 
different service companies and crew transports in the Basin.
    Theodore Roosevelt Expressway provides a transportation 
corridor for oil rigs, for pipe, for steel, and for supplies 
from Edmonton, Calgary, Alberta to the north, and as far has 
Houston, Dallas, and Denver to the south. The highway allows 
the movement of oil and gas from wells to connection points and 
then on to processing facilities located either in-State or 
out-of-State. Exploration and extraction technologies use 
specialized equipment and services, many of which are not 
available in North Dakota, and must be purchased from out-of-
State sources.
    While oil operators present a mix of small to large firms, 
a majority of the predominant oil operators in North Dakota 
also have operations in other States. They operate in Utah, 
Colorado, Texas. Theodore Roosevelt Expressway is a collector 
corridor for six major east-west highway systems that service 
major development areas.
    Production agriculture, which I was a part of for 33 years, 
serves as the third leg to the economy of our region. Trucks 
transporting spring wheat, durum, feeder cattle, and a host of 
other agricultural products to other States and countries make 
this region a primary exporter of agricultural foodstuff--
foodstuffs. The Mondak region continues to diversify its 
agricultural production to ag processing and to shipping.
    What does this mean for Highway 85 and for the Theodore 
Roosevelt Expressway? It means that existing highway--this 
existing highway system, that was built to support small farms, 
moving grain in single-axle trucks to market, and the station 
wagon taking the family on a daily outing, is being asked to 
support an industry using tankers and semitrailers with 
multiple wheels to transport goods.
    The Long X Bridge, south of Watford City has become a 
bottleneck to traffic, moving more over-height equipment to the 
oil fields. North Dakota officials issued over 26,000 over-
weight or over-height permits on roadways in and along Highway 
85 in 2009, compared to 10,700 in 2005. Currently, our 2010 
permits could total over 60,000 permits.
    Tank--tanker trucks hauling crude and water up the steep 
grades in the Badlands are laboring in front of RVs and 
cyclists on the way to visit our national parks and tourism 
sites. Also, narrow shoulders and unstable weather, combined 
with heavy equipment and increased speeds, has placed the 
infrastructure in jeopardy, and have created safety issues for 
our citizens and workers.
    In closing, I want to thank you for the support that you've 
given on past highway projects in North Dakota. My favorite 
example, of course, is the Four Bears Bridge on the Missouri 
River, near New Town. What a difference this bridge made--has 
made, not only for the citizens of McKenzie County and 
Mountrail County, but for the hundreds of other people and 
industries that use it on a daily basis.
    On behalf of the City, I want to thank you again for 
including this congressional budget hearing in Watford City, 
and urge you to continue your support in upgrading Highway 85 
and the Theodore Roosevelt Expressway.
    Thank you, Senator. Thank you----
    The Chairman. Thank you.
    Mr. Pelton. --Congressman.
    [The prepared statement of Mr. Pelton follows:]

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    The Chairman. Thank you for your kind words. And thank you 
for your excellent testimony.
    I'd like, at this moment, to ask the audience, by a show of 
hands, how many believe a part or all of Highway 85 ought to be 
four-laned--if we could just see a show of hands.
    [A show of hands.]
    The Chairman. That's about as unanimous as it can be. I 
think it would be unanimous, but our press representatives, by 
press ethics, are not allowed to vote at these things.
    [Laughter.]
    Voice: I voted.
    The Chairman. You voted?
    [Laughter.]
    The Chairman. OK.
    [Laughter.]
    The Chairman. You can vote. OK. Good for you. Well, I'm 
glad you did.
    And let the record show, if we can, that on that question, 
where the audience was asked, ``How many believe Highway 85 
ought to be four-laned, in part or all?'' it was virtually 
unanimous.
    Mayor Pelton, if I can, for a moment, take us to the 
question of safety--because we're going to have, on the next 
panel--the Sheriff is going to testify. I hope he will talk 
about that. But, from the perspective of the Mayor, are you 
concerned with the safety of this corridor? And what leads you 
to a conclusion, if that is your conclusion, that more needs to 
be done to make this roadway more safe?
    Mr. Pelton. The amount of traffic that we have on Highway 
85, and some of the other highways that connect to Highway 85, 
of course, has just increased by leaps and bounds. And they're 
bigger, heavier vehicles that can't stop as easily.
    The Chairman. Let me ask you to pause a moment. I'm told 
the court reporter has to change tape.
    Is that correct?
    We need to pause just for a moment. I apologize for this, 
but it's a technical matter, to make certain that all of it is 
captured for the record.
    [Pause.]
    The Chairman. All right?
    Please resume.
    Mr. Pelton. OK. As I was saying, Highway 85, of course, is 
just a lot busier. We have a lot more traffic. There's times 
when I pull up to a stop sign, leaving Williston, or on a truck 
bypass here at Watford City, where it may take several minutes 
before I have an opportunity to get on the highway because it's 
backed up a block or two blocks--several blocks--with trucks. 
And we just have that--so much more traffic.
    I know you saw the figures on our fatalities in--Highway 85 
and Highway 23 have become probably the bloodiest highways in 
North Dakota. And it's simply because--not because our people 
don't know how to drive, it's because of the excess wear and 
tear on the highways, weather conditions, and excess traffic. 
And it is a--it's a major concern to all of us here in Watford 
City.
    The Chairman. Mayor, one of the things I'm going to be 
asked, because part of the record here is--we had a vote of 
those in attendance at this hearing--I don't know the numbers 
of people, but most of the seats are full here--one of the 
things that will be said to me is, ``Well, that's not a 
representative sample of community opinion.'' In your judgment, 
is the vote that was just taken on the question of four-laning 
Highway 85--is that representative of public opinion?
    Mr. Pelton. I would say public opinion is probably higher. 
A lot of----
    [Laughter.]
    Mr. Pelton. A lot of--when you visit with people on the 
street, you know, when they don't take into consideration the 
costs that we've heard and all of these different things that 
we've heard, they just say, ``Why can't we be a four-lane 
highway?'' and, ``Why can't we have a southbound and a 
northbound lane, and not have multiple--u one lane like that?'' 
And I would say it's probably higher than what you saw here in 
the room.
    The Chairman. All right.
    Director Ziegler, I'd like to come back to you for a moment 
on the question of, Do we have--I assume we do--different 
traffic counts for different reaches of the road--that is, for 
different segments of the road? And would that traffic count 
tell us that there are substantial differences on that 186 
miles of 85? And would that tell us--well, why don't you answer 
that question and then we'll go to the next question.
    Mr. Ziegler. Mr. Chairman, yes, we do. The traffic counts, 
as best as I can remember them from the corridor study--from 
the South Dakota border to I-94, are in the neighborhood of 
1200 to 1500 vehicles a day. And north of I-94, they're in the 
neighborhood of 2,000 to 2500. As you get closer to Watford 
City, the traffic counts are in the neighborhood of 20---I 
believe it as 26- to 2800 vehicles per day.
    The Chairman. OK. And what is--is there a rule of thumb, 
Director Ziegler, with respect to what kind of traffic count 
justifies four-laning?
    Mr. Ziegler. Mr. Chairman, there are several out there. 
Minnesota doesn't even think about a four-lane until they hit 
12,000 vehicles per day. South Dakota's at--is at 6,000. Those 
are the two that I've talked to, personally.
    The Chairman. So, we would not meet either of those tests.
    Mr. Ziegler. Mr. Chairman, no, we wouldn't. In fact, you 
know, we talked about some traffic in other areas. There's more 
traffic between New Town and Highway 8 right now than there is 
anywhere on Highway 85 between the Four Bears Bridge and 
Highway 8, going north to Stanley.
    The Chairman. We'd better----
    Mr. Ziegler. That's----
    The Chairman [continuing]. Do a hearing on that.
    Mr. Ziegler. That's about 5,000 vehicles a day right now.
    The Chairman. Five thousand.
    Now, there's a difference, though, I assume, between what 
kind of vehicles we're talking about. And is that captured in 
this data? That is, here we have a disproportionate share of 
heavy truck traffic. So, does a ``traffic count'' count--does 
it differentiate between heavy trucks and passenger vehicles, 
for example?
    Mr. Ziegler. Mr. Chairman, yes, it does. Each count has 
both the total vehicles and the truck count.
    The Chairman. And how would our truck count relate to--so, 
these standards, when we're talking about 12,000 and 6,000--
Minnesota, South Dakota--do they have a sub limit for heavy 
trucks?
    Mr. Ziegler. Mr. Chairman, that I don't know. But, you 
know, typically, in North Dakota, our truck proportion is 25--
in round numbers--25 percent of the total traffic. Up in this 
area, we're probably talking a little bit more. And I cannot 
recall those numbers, but I can get them for you as----
    The Chairman. OK.
    Mr. Ziegler [continuing]. Part of this testimony.
    The Chairman. I think that'd be very useful.
    The one thing I notice--I mean, it just--it appears to me--
and I don't have any scientific data to support it--but, it 
just appears to me that the proportion of heavy truck traffic 
is much higher here than I see other places.
    Mr. Ziegler. Mr. Chairman, it is high; there's no doubt 
about it. And as I shared in my testimony, we have a whole 
system that we have to address north of Jamestown, between 
Jamestown and Carrington--their average: 760 trucks a day. And 
I think I saw your number here being about 560. So----
    The Chairman. Yeah.
    Mr. Ziegler [continuing]. We're seeing, in North Dakota--
and we've done testimony to several of the transportation 
committees and in-term legislative committees where we're 
talking about not only the oil movements, which is a major 
movement, but the ag product that we're taking off the fields 
right now is substantial. And then adding to that the ethanol 
and some of the manufacturing that we've got, we've got traffic 
generators that are significant.
    The Chairman. Now, your earlier reference to--that was 
Highway 52? Highway 52?
    Mr. Ziegler. Highway----
    The Chairman. Heavy truck----
    Mr. Ziegler. Highway 281.
    The Chairman. 281.
    Mr. Ziegler. It's 281 and 52, combined.
    The Chairman. 281 and 52, and we've done a hearing on that, 
that you----
    Mr. Ziegler. Mr. Chairman----
    The Chairman [continuing]. Participated in.
    Mr. Ziegler [continuing]. Yes, we have, in Jamestown.
    The Chairman. So, we've done a special hearing on that road 
network?
    Mr. Ziegler. That is correct.
    The Chairman. And from what I hear you saying, we'd better 
think about doing 23.
    Mr. Ziegler. We're looking----
    The Chairman. The regional----
    Mr. Ziegler [continuing]. At that. In fact--Grant Levi is 
in the audience here--we have--we've already flown that area to 
take a look at what it is we're going to have to do. We're 
doing a scoping document.
    The Chairman. OK.
    Mr. Ziegler. Like I said, we're going to start regrading, 
next year, west of the Four Bears Bridge, of the new road 
that's there now. And we need to look at what we need to do to 
the rest of the system. While we're doing intersection 
improvements--there are no shoulders on that road at all----
    The Chairman. Yeah.
    Mr. Ziegler [continuing]. And it's very narrow and 
concerning.
    The Chairman. Yeah. Well, that's important for the record, 
as well.
    Let me just conclude this part of the discussion by saying, 
the other thing that has to be taken into account is 
topography, it would seem to me. In terms of safety issues, 
it'd be a combination of road capacity, traffic, topography--
this is a pretty unforgiving area, in terms of what we're 
dealing with, in terms of what my grandfather used to refer to 
as ``hill, truck, curve.'' So, that's got to be taken into 
account, as well.
    In the interest of time, I think we'd better go to the 
second panel.
    Anything that you'd want to add, Congressman Pomeroy?
    Mr. Pomeroy. One quick question--26,000 permits, 1909; 
maybe 60,000 in 2010--how do you process all that volume? I 
mean, to me, that's extraordinary. Every time down the road, 
you've got to get a permit. Do you have expedited ways of, 
basically, facilitating the essential paper flow so the traffic 
flow can move?
    Mr. Ziegler. Congressman, the Highway Patrol actually gives 
out the permits, and we have--or they have, I should say--an--a 
electronic system, where truckers can get permits 
electronically----
    Mr. Pomeroy. Electonic.
    Mr. Ziegler [continuing]. Unless they're of such weight and 
size that they have to do the call-in. But, that's just for the 
Department of Transportation and the State system. Each county 
system has their own permitting system. And I know there's 
one--happens to be one here in Watford City, too, that--and 
they do have a multi county system that they've engaged in.
    And I don't have the answers to all that, but maybe the 
Mayor does.
    Mr. Pomeroy. The Mayor made an interesting point, also, on 
Four Bears Bridge. Senator Conrad led the fight to get Four 
Bears in. Basically, it was a promise unfulfilled, to the 
Reservation, from the Federal Government. Thank God we got that 
done. Can you imagine, with the oil traffic, on that 
horrifying--I used to get scared passing a little, you know, 
what--Chevy Nova. I mean----
    [Laughter.]
    Mr. Pomeroy [continuing]. You can imagine this oil traffic, 
what that would have done on that bridge; it would have been a 
completely dysfunctional, but essential, artery. Thank goodness 
that one got in, in time.
    Mr. Ziegler. If I could, Mr. Chairman and Congressman 
Pomeroy, I--I, as the director of the Department of 
Transportation, take this responsibility very--it's a very 
serious responsibility. And I have the whole State. So, when I 
gave you the statistics, I don't mean to slight Highway 85, but 
I do want to share with you--today, Walt Peterson and the 
district engineer, Grant Levi, Joel Welt, the assistant, and I 
did a lot of driving. And we're seeing lot of infrastructure 
needs out here. Highway 73, just east of Watford City, is in 
tough shape. And while we've got a contract coming, Walt is 
already saying, ``I'm''--with all the trucks we saw on it 
today, ``I'm not sure the overlay that we've got planned for 
the summer is adequate.''
    So, we have a tremendous need for a highway bill. And I 
really appreciate anything and everything that you can do to 
make that happen.
    The Chairman. Well, I'll tell you, Francis, the one thing 
there's no question in my mind, you are absolutely responsible 
and professional in the conduct of your duties, as is Grant 
Levi and the rest of your team. I think you're just first-rate. 
And we're proud that you're in the position, and the--proud of 
the team that you've assembled. I think they're top-rate. And 
we don't think anything you said here today wasn't factual and 
exactly what we needed to have credible testimony to make the 
record.
    Mr. Ziegler. Thank you, Mr. Chairman.
    The Chairman. And we appreciate it very much.
    And, Mayor, we thank you for your leadership and your 
participation.
    We'll call the second panel, McKenzie County sheriff, Ron 
Rankin; McKenzie County Job Development Authority executive 
director, Gene Veeder; and Rugged West trucking operations 
manager, Mr. Bruce Erickson.
    Welcome, all. We appreciate very much your willingness to 
participate in this hearing.
    And because we're time-challenged, as we always seem to be 
at these, because we really have a need to get certain critical 
facts on the record, which I think we're doing very well at 
here today--we'll go right away to your testimony.
    Maybe we'll just start, Gene, with you, and we'll go right 
down the panel, give each of you a chance to testify, then open 
it up for your questions.
    Gene, it was really your idea that we hold this hearing; 
came out of our meeting just--I don't know----
    Mr. Veeder. Month ago.
    The Chairman [continuing]. Weeks ago. Appreciate very much.

 STATEMENT OF GENE VEEDER, EXECUTIVE DIRECTOR, McKENZIE COUNTY 
            JOB DEVELOPMENT AUTHORITY, NORTH DAKOTA

    Mr. Veeder. We appreciate you and Congressman Pomeroy, 
always willing to meet with us and talk about the matters of 
importance. It's good to see a friendly face when we go there, 
and you're always willing to meet with us. We do appreciate 
that.
    My name is Gene Veeder, and I'm the executive director for 
McKenzie County Job Development Authority. I'd like to give you 
greetings from McKenzie County commissioners. They're in 
session today, so they couldn't be here, but they wanted to be.
    I'm proud to say I'm a third-generation rancher, the 
grandson of Norwegian immigrants. I'm operating the same ranch 
my father and my grandfather----
    The Chairman. You're Norwegian?
    Mr. Veeder. Norwegian, yeah.
    The Chairman. You know, Senator Dorgan and I were just in 
Norway, and met with the King.
    Mr. Veeder. Well, he's a relative, I'm sure.
    [Laughter.]
    The Chairman. Can I just tell you, Gene, he did not 
remember that about either of us?
    Mr. Veeder. He may be getting older; I'm not sure.
    [Laughter.]
    The Chairman. You know, it turns out the King of Norway is 
Danish.
    [Laughter.]
    The Chairman. It's true.
    Mr. Veeder. We have mixed blood in our family.
    [Laughter.]
    The Chairman. Yeah, mine, too.
    Mr. Veeder. But, my--you know, I'm the third generation. My 
daughter, this week's, moving back to the ranch, so we'll have 
four generations on this ranch. And that's why this economic 
development stuff is important to us, and it's important to me.
    As Mayor Pelton stated, the Theodore Roosevelt Expressway, 
it follows a route of historic significance to us here. And I'm 
a community member and the economic development director and 
the president of the Theodore Roosevelt Expressway Association. 
And so, my priorities are to develop and sustain this economy. 
We take it seriously here.
    I thought maybe I would try to tie this in to a larger 
picture, because you've talked to this--about it. You have to 
deal with other States. And the Theodore Roosevelt Expressway 
works with the Ports-to-Plains Corridor. And I'd like to talk 
about that a little bit. It's not just about North Dakota, it's 
about what moves between North Dakota.
    So, we want to acknowledge especially, though, your strong 
support over the years for U.S. Highway 85 and the Theodore 
Roosevelt Expressway. It's part of a larger corridor known as 
the Ports-to-Plains Alliance Corridor.
    Now, you've been a champion of transportation investment in 
North Dakota and rural America, and we know that. You truly 
understand the importance of this investment and what it means, 
in terms of safety and economic development for America's rural 
heartland, and we do thank you.
    And our message for the MAC group today is simple: keep up 
the good work. It's your voice that helps us be heard in rural 
America.
    As Congress considers the reauthorization of the Federal 
transportation programs, we urge you to do everything you can 
to ensure that adequate resources are made available for rural 
transportation, in general, and for U.S. Highway 85 and the 
Theodore Roosevelt Expressway and the Ports-to-Plains Alliance 
Corridor, in particular.
    As I mentioned, the U.S. Highway 85 and Theodore Roosevelt 
Expressway are part of a larger corridor known as the Ports-to-
Plains Alliance Corridor. This larger corridor is made up of 
three congressionally designated high-priority corridors on the 
National Highway System. And as you can see from the map that 
we have over here, it connects North Dakota with a common 
north-south corridor reaching domestically across nine States, 
from Texas to Montana, and internationally to markets in Canada 
and Mexico.
    The Alliance is a corridor of national significance, and we 
appreciate your support with that. It provides a backbone to 
the common economy of energy and agriculture that are so 
critical to the security and economic vitality of the United 
States.
    I'd like you to consider these facts: Six of the top ten 
oil-producing States are in this corridor; five of the top ten 
natural gas producing States are in this corridor; seven of the 
top ten U.S. States for installed wind and wind-energy 
potential are in this corridor; the corridor contains North 
America's agricultural heartland, producing $44.3 billion of 
agricultural goods, or 25 percent of the U.S. total; it 
contains six of the top ten farm States; and Canada and Mexico 
are the top two export markets for U.S. farm commodities.
    Nearly 25 percent of U.S. ethanol refining capacity with 33 
existing refiners and more are underway in this corridor. 
Domestic trade between these States in this corridor by truck 
is valued by the 2007 Commodity Flow Survey at 156 billion, 
which has increased 82 percent since 2002. International trade 
with Mexico by truck was valued, in 2008, at 87 billion, and 
that's up 25 percent since 2008. International trade with 
Canada by truck was valued, in 2008, at 32 billion, up 55 
percent since 2008.
    Highway 85, the Theodore Roosevelt Expressway, and the 
Ports-to-Plains Alliance Corridor are currently inadequate to 
meet the demands of this traffic, with substantial investments 
necessary to upgrade these facilities to modern, safe highways 
capable of serving local and regional and national needs.
    It's for this reason that the next Federal transportation 
reauthorization bill is so important, and one of the reasons 
we're here today. This legislation must provide the necessary 
resources to make significant progress in upgrading this 
corridor of national significance.
    The key components of these recommendations that our group 
have are:
    Rural connectivity and mobility. The new legislation should 
include a major focus on upgrading and modernizing the 
transportation infrastructure that provides connectivity and 
mobility for America's small communities and rural areas, 
especially federally designated high- priority corridors in the 
National Highway System.
    Freight transportation is an issue. The new legislation 
should also include a major focus on freight movement, 
including freight corridors in rural areas, especially high-
priority corridors in the National Highway System.
    Border infrastructure. The border infrastructure that's 
critical to promote safe and efficient movement of goods, 
facilitating trade and supporting jobs in America.
    And something that I know you're concerned with is rural 
safety. The new legislation should include a major focus on 
highway safety, especially safety on two-lane rural roads, 
which have often had fatality rates well above urban 
interstates.
    The freight pilot program. We are supporting a freight 
pilot program. We'd like to see upgrading and modernization of 
the Ports-to-Plains Corridor and Heartland Expressway and the 
Theodore Roosevelt Expressway.
    And a permitting pilot program. We support a pilot program 
for streamlined transport of overweight and oversized equipment 
along the Ports-to-Plains Corridor and the Heartland Expressway 
and Theodore Roosevelt Expressway.
    Finally, the last two points I'd make. We feel the Federal 
Trust--Highway Trust Fund must have adequate resources to meet 
the needs of rural areas, as well as small, medium and large 
metropolitan areas.
    And a critical area we haven't talked about: It is 
imperative that the transportation bill, as well as any climate 
change legislation Congress might enact, be balanced. It must 
recognize that rural areas are different than major 
metropolitan areas and that additional capacity in rural 
America is critical if these areas are to be tied to the 
national network in the 21st-central---century global economy.
    Thank you, again, for addressing--coming to Watford City 
and addressing our needs locally. We also like to thank you for 
recognizing the importance of this corridor as its national 
significance along the Theodore Roosevelt Expressway and Ports-
to-Plains Alliance. We appreciate your being here.
    [The prepared statement of Mr. Veeder follows:]

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    The Chairman. Well, thank you, Gene. Thank you for that 
excellent testimony. And thanks for the invitation to be here.
    We'll go next to Sheriff Rankin.
    Thank you for your willingness to testify. And please 
proceed.

STATEMENT OF RON RANKIN, SHERIFF, McKENZIE COUNTY, NORTH DAKOTA

    Mr. Rankin. Thank you, sir.
    Mr. Chairman, Congressman Pomeroy, sir, in addressing your 
request for testimony on improving safety along the U.S. 
Highway 85 Corridor, I submit the following:
    Speaking strictly from a law enforcement point of view and 
directed only to U.S. Highway 85 as it transitions through 
McKenzie County, the safety problems I am facing this year are 
caused by an increased volume of traffic. I do not for sure 
know--I do not know for sure, but I am working and planning, 
with my department's strategy, under the assumption that the 
oil production has not yet reached its peak.
    The safety concerns created by an increased traffic volume 
are, first of all, an increase in the number of accidents. I am 
aware that your office has statistics on the number of fatal 
accidents on Highway 85 for 2009 and 2010. However, the number 
of accidents investigated on Highway 85 in McKenzie County in 
2006, were 49; in 2007, were 47; in 2008, were 55; in 2009, 
were 53. These figures were taken from the North Dakota 
Driver's License and Traffic Safety Division. This does not 
count the car and deer accidents. Car and deer accidents are 
quite often investigated locally, and they are not--generally, 
if the damage is not significant, they are not reported.
    Second, there have been a--there has been a dramatic 
increase in the number of 9-1-1 and 9-1-1--non-9-1-1 traffic 
violation complaints and reports received by our office. These 
are complaints that deal with speeding motorists, passing where 
prohibited, reckless driving, and possible drunk drivers. There 
are also many reports of near-collisions caused by reckless 
driving. Each of these calls requires a deputy to respond and 
attempt to contact the vehicle.
    Of major concern to me, as sheriff, is that these issues 
are not limited to Highway 85, although this is our discussion. 
I still--they are not limited to Highway 85, they are 
countywide. McKenzie County, as you know, is the largest county 
in the State. Not only do I have Highway 85 to deal with, I 
also have Highway 23, Highways 200 north and south, and all the 
county roads that run through the county. This is a concern 
because, even though we enjoy complete cooperation with the 
Williston District North Dakota Highway State Patrol, I only 
have six deputies that must deal not only with the highway 
concerns, but other law enforcement-related issues. This 
reflects in our response time and places a strain on an already 
stretched manpower level.
    As sheriff, I see safety concerns on U.S. Highway 85 being 
caused by a significant increase in the volume of traffic along 
the corridor, and the inherent problems associated with a heavy 
traffic flow. Short of making Highway 85 a four-lane highway--
I'm one of those that voted on it--I support--I see super-
highways, turnout lanes placed strategically along highway 85, 
with an increased law enforcement presence, as being a helpful 
part of that solution. Having marked patrol vehicles patrolling 
routinely along the highway, I really believe that would help 
in a proactive manner.
    Thank you for the opportunity to voice my concerns 
regarding the safety issues on Highway 85 through McKenzie 
County. And I hope I have assisted you in a small way.
    [The prepared statement of Mr. Rankin follows:]

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    The Chairman. Yes, sir, you have. I appreciate very much 
your testimony here today.
    Next, we'll go to Mr. Bruce Erickson, representing Rugged 
West Trucking.

 STATEMENT OF BRUCE ERICKSON, OPERATIONS MANAGER, RUGGED WEST 
                     TRUCKING, NORTH DAKOTA

    Mr. Erickson. Mr. Chairman, Congressman Pomeroy, I'm Bruce 
Erickson. I am the current operations manager for Rugged West 
Trucking in Watford City. We're a small company, about 35 
trucks large. We started, a few years back, with one truck and 
two drivers, and in a matter of 5 years, have expanded to about 
35 trucks today.
    We move approximately 20,000 barrels of crude oil per day 
from the field to the pipeline. That's what we do. In that 
process, our guys see a lot of things every day.
    I started out--I came to Watford City originally--I taught 
high school music for 20 years, and I drove those big buses, 
hauling kids on Highway 85. Pretty important cargo. We have 
people in this community that drive those buses every day on 
these highways. Precious cargo.
    I was involved in the tourism industry. I owned a resort. I 
deal with--I dealt with the tourism--the part of that came 
along with it. And I see the increase and I see the conflicts 
that arise between not only the local traffic and the industry 
with the oil and agriculture and whatnot, but also with the 
tourism. It's a common complaint I hear on the phone. I push 
the trucks, currently, and I get this complaint on the phone a 
lot: ``They're in our way. They go too slow. Can't they get out 
of the way? Can't they drive somewhere else?'' You hear that 
all the time. I hear the same thing from my drivers, too. They 
wonder why we've got to go around motor homes, or what they're 
doing, and all of a sudden they veer off.
    But, at the same time, it's--it deals with that issue of 
safety that Sheriff Rankin and everybody else is--has brought 
forward.
    This morning, we had a safety meeting, and the opening of 
the meeting was, What season is it? Everybody kind of looked 
around and, ``Spring, summer, yeah.'' And everybody was wrong, 
the guy said, ``It's tourist season.'' In North Dakota we have 
three seasons. It's when no one wants to be here, in the 
winter, and then tourist season, and then harvest. And in all 
those times, there's an increased amount of traffic. And there 
are issues that arise from each one of those.
    I strongly support the idea of turning lanes; widening the 
road, making it into a super-2, as a minimum, though four-
laning it would be the most appropriate.
    Just outside of town, south--4 miles south of Watford City, 
there's a particular intersection infamous, for not-good 
reasons. But, today, there's about 100 trucks every day that 
enter and exit this intersection. It's at the bottom of a hill. 
If you're heading south out of that, down Highway 85, if you're 
in a truck, by the time you get to start negotiating the 
corner, you cannot--you have no visibility of the vehicle 
approaching that's heading south. By the time you can see that 
vehicle, it's too late. Every day, there are mishaps there. 
There are many, many near-misses. It's one of the issues that 
needs to be addressed.
    Just a few more miles down the road--and this one's kind of 
interesting--this isn't really the Highway Department's issue, 
but--there was a well drilled, just off the highway. This 
winter, we started to haul that, and my guys had to lay on the 
highway to chain up in the traffic in order to be able to 
negotiate the hill to get up that. We put those guys' lives--
you know, that's just not reasonable. And I think that's the 
things that we need to look at.
    We like to tell our guys we want 'em to go--come home as in 
good a shape as they left. That's important to us. They need to 
leave safely, be able to do their job, and return home each day 
as safe as they were when they got here.
    Those are the big concerns we have. There are other things 
that deal with trucking issues--States' State regulations that 
aren't the same, things that prohibit us from using Highway 85. 
But, those aren't the important things. The important things 
are the lives that it affects each day, and bringing each 
person home safely.
    I'd like to take this opportunity to thank you for allowing 
me speak today. And if there's any further questions--thank 
you.
    The Chairman. Thank you. Thank you. Very, very good 
testimony, Mr. Erickson.
    I'd like to go right back to you, if I could, and talk 
about that intersection. What is that intersection that you 
identified, the one where you're going south and----
    Mr. Erickson. It's actually where we're located, 4 miles 
south of Watford City. It's--there are now three trucking 
operations working out of that intersection. One of them's soon 
to be 300-plus trucks large. They bought 100 acres to put their 
trucks in the yard. Also on there is Redrock Transportation and 
Rugged West Transportation. There's also a repair shop, Big Rig 
Services, there. And the road--and it's just the topography--
the road that is accessed is at the bottom of a hill. And 
there's a large grade going to the south, which is, you know, 
miles long, and so, very visible--can see. But, the one coming 
from the north, by the time the cars poke over the top, a truck 
turning to go south--and whether you're loaded or empty, it's 
just a target. You can't see it until it's too late.
    The Chairman. Now, Director Ziegler, is that an 
intersection that we've got--you've got plans to deal with?
    Mr. Ziegler. Mr. Chairman, yes, it is.
    The Chairman. Good. And
    Mr. Ziegler. We're putting a southbound left-turn lane--.
    The Chairman. And I assume that would help----
    Mr. Ziegler. And the right turn----
    The Chairman. OK. All right. So, that's----
    Mr. Erickson. Yes, that would----
    The Chairman [continuing]. That's good news. That's slated 
for something to be done.
    Gene, if I can go to you--when you were in to see me, we 
were talking about other issues, as well, but these 
transportation issues, which are increasingly important in the 
area--I want to ask you the same question I asked the Mayor, 
because I know, when I go back to Washington, and I indicate 
this audience voted overwhelmingly for four- laning, that they 
will say to me, ``Well, that's not representative.'' In your 
judgment, was that vote of the people present at this hearing--
was that a--representative of the feeling in the community.
    Mr. Veeder. Yes, it is.
    The Chairman. And so--maybe if we could hand Gene the 
microphone so that they can capture that for the record.
    So, let me just repeat, in terms of the vote that was taken 
here earlier today on support for four-laning, you believe that 
that's representative of feeling in the community?
    Mr. Veeder. Yes, I do.
    The Chairman. And I assume the reasons for that would be 
the safety reasons, as well as just the efficiency of being 
able to move goods and services across this area.
    Mr. Veeder. Well, yes, it is. And, to follow that up, the 
unique part about Watford City--and I believe that's one of the 
reasons that you came here--is, it is our tie-in. We don't have 
rail here. We don't have the interstate here. Highway 85 is our 
lifeline, north and south. And so, it is the only way we get 
those goods and services. They do come by truck. And, as the 
Mayor said, the--we're mixing traffic and rough terrain in a 
tough environment.
    And so, you know, the responses we have are good. But, I 
think that people feel that a four-lane is good for us, 
locally, but for the State, as well--for the commerce to the 
State, as well.
    The Chairman. OK.
    Congressman Pomeroy.
    Mr. Pomeroy. Gene Veeder was in school with my brother. 
I've been hearing about Watford City from Gene Veeder for about 
35 years.
    [Laughter.]
    Mr. Veeder. Don't say it like that.
    [Laughter.]
    Mr. Pomeroy. I have. I am thrilled that Jesse's back. 
You're going to have a fourth-generation Veeder----
    Mr. Veeder. Yep.
    Mr. Pomeroy [continuing]. In McKenzie County, and thrilled 
with the entirely different range of economic opportunity that 
Jesse will have, in light of this fabulous oil play taking 
place. I wish you'd have told about the mineral acres, because 
I might have bought some, 35 years ago, but----
    The Chairman. You didn't have any money.
    Mr. Pomeroy. Well, there is that.
    [Laughter.]
    Mr. Pomeroy. Nothing's--that's one area, nothing's changed.
    I do think that the Veeder story represents something 
extraordinarily special happening up in this area, and it's not 
without its challenge.
    And I found today's hearing, both in Williston and Watford 
City, extremely helpful, in terms of understanding what our 
assignment is, making sure the Federal Government is doing its 
part to continue to emerge this opportunity.
    Because it's not just an opportunity for the families of 
the region; we have a desperate need for the energy sources 
that we can produce, made more acute now by the tragedy 
unfolding in the Gulf of Mexico. And so, you look at the 
corridor--yeah, there's some investment there, but it's nothing 
compared to the investment we're going to be making, cleaning 
up places where maybe we shouldn't have been drilling in the 
first place. So, we have to make the best of this opportunity. 
And that certainly includes the kind of infrastructure that's 
going to afford the optimal development.
    So, I appreciate everybody in the--all the evidence put 
into the hearing.
    We're meeting in a facility that reflects infrastructure 
investment--the Stengem's private-sector infrastructure 
investment--now what a wonderful place this will play in the 
community, going forward. It's just an example. Yeah, there's 
money up front, but long-term dividends to flow from it. I 
think we need to consider this 85 project in that vein.
    Thank you very much.
    The Chairman. I want to thank everyone who's testified here 
today. I think this is exactly what we needed to get on the 
record. It couldn't be more timely, with the Secretary of 
Transportation coming to North Dakota on Friday, with the 
Director of the Federal Highway Administration with him.
    And I deeply appreciate, really, the excellent testimony of 
both panels. Thank you very much. We appreciate your 
participation.
    With that, we'll close the hearing.
    [Whereupon, at 4:58 p.m., the hearing was adjourned.]


 FIELD HEARING: TRANSPORTATION INVESTMENTS: PROMOTING ECONOMIC GROWTH 
                    AND IMPROVING SAFETY ALONG ND 23

                              ----------                              


                         THURSDAY, JULY 8, 2010


                                       U.S. Senate,
                                   Committee on the Budget,
                                             New Town, North Dakota

    The committee met, pursuant to notice, at 9 a.m. in the 
Arikara Room of the 4 Bears Lodge, 202 Frontage Road, New Town, 
North Dakota, Hon. Kent Conrad, chairman of the committee, 
presiding.
    Present: Senator Conrad.

              OPENING STATEMENT OF SENATOR CONRAD

    The Chairman. The hearing will come to order. I want to 
welcome everyone this morning to this hearing of the Senate 
Budget Committee. This is an official hearing of the committee, 
and therefore we will be operating under the rules of the U.S. 
Senate, and an official record of this hearing is being kept.
    The title of this hearing is, ``Transportation Investments: 
Promoting Economic Growth and Improving Safety Along North 
Dakota 23.'' As the title suggests, we'll be focusing on what 
investments may be needed to upgrade and improve highway 23, to 
promote the economy in Western North Dakota. We also want to 
focus on how to make the road more safe. I think all of us are 
concerned about the safety of local residents who use this 
highway.
    I want to begin by welcoming our distinguished witnesses 
today. We have two panels. Our first group includes our North 
Dakota Department of Transportation Director, Mr. Francis 
Ziegler. Welcome, Francis. Mandan-Hidatsa and Arikara Nation 
Chairman, Marcus Levings, welcome. And New Town Mayor, Dan 
Uran. Welcome mayor, good to have you with us as well.
    The second panel will include State Representative Kenton 
Onstad, and Trust Land Oil Field Service President, Steve 
Kelly.
    I look forward to hearing from each of you, and we will 
share your concerns and your points of view with our colleagues 
back in Washington. I also want to warmly greet Congressman 
Pomeroy, who is here as well. As you know, Congressman Pomeroy 
serves on the Ways and Means Committee, which has a key role in 
writing the new highway and transportation legislation.
    This is actually the third hearing that I have held this 
summer that relates to the impact of oil development in Western 
North Dakota. In June I held a hearing in Williston on the need 
for more housing in the region to support the growing energy 
industry. I held another hearing in Watford City on the impact 
of energy production on highway 85. Last year we held hearings 
in Williston and Dickenson on highway 85.
    This map shows why highway 23 is so important to energy 
production in our State. The road is a critical lifeline for 
energy development. It runs east-west through the Bakken 
Formation, and links the area to other major highway networks. 
It serves as a major route for the transport of oil rigs, 
pipes, steel, and supplies. We need to ensure that highway 23 
has the capacity to handle the increased activity from the 
growing energy production.

[GRAPHIC] [TIFF OMITTED] T8154.241


    The next chart shows the Minot Daily News report from last 
month summed up the situation, ``Oil Boom Impact: Highway 23 at 
New Town is Areas Busiest Highway.'' And the picture shows the 
kind of large truckloads coming through the area.

[GRAPHIC] [TIFF OMITTED] T8154.355


    We have seen a dramatic increase in oil production in North 
Dakota from the oil boom in the Bakken Formation. This chart 
demonstrates that. North Dakota oil production was up to 8.5 
million barrels a month as of April, with further production in 
the Bakken and the discovery of the Three Forks formation, we 
can expect production to continue to climb.

[GRAPHIC] [TIFF OMITTED] T8154.356


    The next chart shows that highway 23 has seen a dramatic 
spike in truck traffic. Truck traffic on highway 23 near New 
Town increased 193 percent between 2005 and 2009. 
Unfortunately, the highway was never designed to handle this 
number of heavy trucks and oversized loads that are currently 
traveling on it. This road clearly needs improvements to foster 
continued growth, to better serve the communities in the area, 
and to ensure a safe travel route.

[GRAPHIC] [TIFF OMITTED] T8154.357


    The next chart shows what happened with respect to our 
transportation infrastructure needs and the critical nature of 
the time we are in right now. Because the administration is 
developing its Highway Bill Reauthorization Plan. It's worth 
remembering that North Dakota benefited greatly from the last 
Highway Bill, which was completed in 2005. I was privileged to 
serve as a conferee. Conferees are chosen by the House and the 
Senate to work out the differences between proposals coming out 
of the House of Representatives and proposals coming out of the 
Senate to produce the final legislation. In that role as a 
conferee on that bill I was able to help secure a significant 
increase in funding for our State. We got $1.5 billion for 
North Dakota, a 31 percent increase in that bill. That averages 
out to $234 million a year for highways with additional funding 
provided for transit. We did very well overall by securing two 
dollars for every dollar in gas tax collected in the State, 
ranking us among the top four States in the Nation for return 
on gas tax dollars. So, only three States do better than North 
Dakota in terms of our return on our tax dollar.

[GRAPHIC] [TIFF OMITTED] T8154.358


    Here are some of the priorities I will focus on as we 
consider the next highway bill. The next bill must identify 
sufficient funding so that infrastructure investments are 
secure and robust over the long term. States and communities 
must be able to rely on them, something I know Director Ziegler 
is acutely concerned about. Next, any new highway bill must 
maintain recognition that rural transportation needs are vital 
to the nation. And it must recognize the importance of a 
nationally connected highway system.

[GRAPHIC] [TIFF OMITTED] T8154.359


    Finally, I will fight to enhance investments in the Indian 
Reservation Roads Program. And I am particularly interested in 
hearing from our witnesses on the immediate investments that 
are needed in highway 23, and what future investments are 
required to support the growth in this area and the safety of 
those using this road network.
    With that, I want to turn to Congressman Pomeroy, and again 
acknowledge the key role that he will play in the funding 
decisions for the next highway bill as a member of the 
important Ways and Means panel.
    Congressman Pomeroy, welcome. Before you begin, I should 
also point out that in the Recovery Act we also secured some 
$180 million for highway improvements in North Dakota, money 
that has been spent last year and some of which will be spent 
this year.
    The Chairman. With that, welcome, Congressman Pomeroy.

  STATEMENT OF HON. EARL POMEROY, U.S. CONGRESSMAN FROM NORTH 
                             DAKOTA

    Mr. Pomeroy. Mr. Chairman, thank you very much for having 
me at your budget hearing, and pleased to make this bicameral 
event. I normally put on a tie when I'm with you at a budget 
hearing. I am later today going to actually look at the oil 
activity, tour a man camp, see a drilling site, and so you'll 
forgive my more casual attire as we commence this hearing.
    Two vivid images impress upon me the importance of this 
inquiry. The first, one time along highway 23--there was a 
period of time where memorials are placed representing the 
lives that have been lost along this highway. I happened to be 
coming down the road at a time when the memorials were out and 
I was struck by the astonishing number, between here and Cody, 
of white crosses, other memorials representing accidents that 
have occurred, lives that have been lost over the years. And 
that was before the oil activity.
    So this has been a stretch of road that has seen more than 
its share of tragedy. Before being asked to encounter the kind 
of activity that the most welcome oil has brought us. But this 
oil boom is occurring on an infrastructure that was not built 
in anticipation to the kind of traffic and industrial demand 
now on these roads.
    Clearly, you have brought your focus on one of the most 
stressed areas of infrastructure in the State, Senator, and I'm 
pleased we're developing the record on the need for activity in 
the--in this area, as we look at a new highway bill.
    A new highway bill is going to involve the Ways and Means 
Committee, the Senate Finance Committee, as we look at funding 
strategies, recognizing that the existing highway trust fund is 
not entirely getting the job done, in terms of producing the 
kinds of revenues from the previously in place Federal gas tax 
that's going to accommodate the needs of the nation.
    Another unwelcome development is the push from States that 
have previously paid more into the trust fund than they have 
received back. It's just a factor of population, North Dakota, 
16 people per mile, South Dakota 19 people per mile. On average 
a multiple of that, 120 people per mile not uncommon. So of 
course it pays--it costs more on a per capita basis to maintain 
the North Dakota road system, which I've been told has more 
roads per capita than any State in the entire country. But if 
those States that have historically paid more into the Nation 
road system are now saying, ``No, no, we put in a buck, we get 
a buck back just like every other State,'' this is going to be 
a very negative development for maintaining a national 
infrastructure across the rural reaches of our country, because 
the economics fall apart very quickly. So we've got our work 
cut out for us in the new highway bill.
    One feature that I think needs to be mentioned is this oil 
activity is producing a tremendous amount resources, some of 
which go directly to the Federal Government, in revenues 
collected from the taxes, as well as the drilling activity on 
Federal lands itself. This is not a--yet another lost Federal 
investment, this is an area where the Federal Government gains 
for--as it builds out the oil plain in Western North Dakota, 
the Federal Government has direct gain like everyone else.
    Let me conclude with the second vivid image, 4 Bears 
Bridge. I crossed it this morning coming to this meeting. And I 
imagined what a different experience that might have been, 
indeed I think we'd have been waiting for a pilot car because I 
can't imagine, giving the kind of traffic now traveling across 
that bridge, that you could have the two-way traffic that was 
scary enough prior to the oil boom. That bridge came about 
because Senator Conrad demanded we were going to get the bridge 
that had long been promised when Lake Sakakawea was established 
and the reservoir was created, and the tribe was flooded. The 
makeshift bridge moved from another location, slapped in place, 
served over the many decades, was never viewed to be an 
adequate fulfillment of the Federal commitment in this area. 
And Senator Kent Conrad insisted on a new bridge, no ifs, not 
buts, no ands. We got the bridge. It was put in place as we now 
can see just in time. And we'd have had no end of trouble, in 
terms of infrastructure, but for that component.
    So I think it's an example of what can happen with a 
hearing like this one. We're identifying problems, we intend to 
address these problems, but we've got new activity that needs 
to be responded to, we're all gaining from the oil activity, we 
need to make sure we just keep the infrastructure expanding 
accordingly.
    The Chairman. Thank you, Congressman Pomeroy, very much for 
you kind words and for being here, and for you continuing 
involvement and interest in the opportunities created by the 
oil play in our State, but also the challenges it presents.
    With that we're going to turn to our witnesses. We're going 
to start with our North Dakota Department of Transportation 
Director, Francis Ziegler. Francis, thank you so much for being 
here and please proceed with your testimony.

STATEMENT OF FRANCIS ZIEGLER, DIRECTOR, NORTH DAKOTA DEPARTMENT 
                       OF TRANSPORTATION

    Mr.Ziegler.Good morning, Mr. Chairman. I'm Francis Ziegler, 
Director of the North Dakota Department of Transportation. I 
want to thank you for the opportunity.
    The Chairman. If you'd withhold just 1 minute, because I 
want to make sure that I acknowledge Lance Gaby, who is here, 
the Governor's Deputy Chief of Staff, Lance Gaby, and I very 
much appreciate his involvement and the Governor's interest in 
having one of his top aids here for this hearing. So welcome, 
Lance, thank you.
    Francis, please proceed.
    Mr. Ziegler. Again, I want to thank you for the opportunity 
to appear before the committee today and for your interest in 
improving transportation in North Dakota.
    Today, I'd like to address several broad transportation 
issues that you've already touched on, Senator, and 
specifically today on highway 23 and other roads in the 
immediate area. North Dakota is working very hard to improve 
transportation. Our infrastructure investment results in many 
benefits, creates jobs, strengthens the economy, improves 
safety, improves mobility for citizens and business. We these 
and other benefits, DOT is working hard to improve 
transportation in our State.
    This year the department has the largest construction 
season in the history. We have about $450 million in projects 
on more than 2,000 miles of roadway improvement Statewide. The 
money comes from the regular Federal aid program, ARRA, or 
often called stimulus, emergency relief, and State funding. 
Transportation systems are important in Western North Dakota. 
The DOT has recognized the importance of the transportation 
system in Western North Dakota, and from 1999 to 2009, we've 
invested about $886 million in preserving and improving the 
corridors in this area. And some of the projects are highway 2, 
22, highway 23, the high interest today, highway 40, 50, 85, 
and 1804. Eight is not mentioned in there, but that's another 
one of the main highways in this area.
    DOT has been aggressive in the energy area of the Western 
part of the State. With recent pavement preservation projects 
and many transportation investments planned to be completed 
from 2010 to 2014, as shown on the attached map--and Senator, 
that's an attachment that I have to the testimony that you have 
in front of you--shows what we do in this area, and I know 
we've got copies for the audience here today. But fundamentally 
it shows, by map, just how much work we're doing in this area 
and what we're doing to try to keep improving the 
transportation system, including highway 23 and other projects, 
again, in this local New Town area.
    Let's get into some specifics. On page two of my testimony, 
highway 85. Senator, you've had several hearings on this 
corridor reviewing transportation needs. In 2010 and 2011, the 
DOT is going to be putting more than $70 million worth of 
improvements into highway 85. We're going to add a three lane 
section between highway 2 and the Missouri River, several 
turning lanes in numerous intersections, all the way to highway 
200 east of 85 and the Missouri River. We're going to be 
regrading and adding a climbing lane south of the Longex Bridge 
and we're adding multiple passing lanes between Wotford City 
and Williston.
    But highway 23, high interest today. In this area, 23, 22, 
and 8 are in the fastest growing areas in the State. 
Construction projects in this area include highway 23 and the 
improvements involve adding turn lanes at six intersections 
between here and highway 83. DOT staff is now scoping, 
reviewing needs for the future on highway 23 to see what we 
should do in the area to meet the future and the current 
growing traffic needs.
    We're also scoping highway 8 and 23. What we mean by 
scoping is that we're looking at--trying to figure out what it 
is we need to do in the future. We've flown it so that we can 
get good pictures of what's happening and what it looks like, 
but we're going to have to take a good hard look at it, because 
the six intersections that we're building this year we don't 
believe are going to be adequate for the long term. I'll be 
getting into some traffic counts later, Senator, and it's 
significant, it's really significant.
    On highway 8, we're widening and regrading north of 
Stanley, but we're also scoping highway 8 between Stanley and 
highway 23 out here east of New Town. We have to look at those 
areas too, and see what it is we need to do.
    Safety, as you know, is a priority for the Department of 
Transportation, and we're always concerned about the safety of 
the traveling public. We're continuously monitoring crash and 
fatality rates in the area and evaluating the data to implement 
safety projects. Some of the more recent safety projects 
include lowering the speed limits on 8, 23, and on a four mile 
section north of Dickenson on highway 22. Installation of 
center line and edge line rumble stripes in the Williston 
district, the entire district is going to get those.
    We drove from Stanley to New Town today and saw the rumble 
strips and stripes, is what we call them, and they're working. 
Research has found that it's a significant safety improvement. 
It keeps the distracted driver in the lane. If you start 
getting out of the lane there's a rumble, a vibration in the 
vehicle sets up and it reminds the driver to get back in that 
lane. And so from a safety perspective, I think it's one of the 
more important things we can do, at least in the short term, 
Senator.
    North Dakota Department of Transportation is working--also 
working in partnership with the Petroleum Council to create 
educational programs to promote safety on roadways.
    Moving on to page three, the recent oil boom in Western 
North Dakota is an economic benefit for the State, as you and 
the Congressman have already said, but it also includes 
challenges for the DOT and local entities. We're planning for 
transportation needs. We're working with the Upper Great Plains 
Transportation Institute, studying the local needs in oil 
producing counties. And the DOT is developing what we need for 
State highways to do our part in the future as our normal 
budgeting process is coming up.
    Recognizing the transportation challenges--the DOT has 
several projects planned over the next 4 years in Western North 
Dakota, about $468 million will be invested in rural projects 
through the 17 oil producing counties, that's $400 million in 
State roads and $68 million on local roads. Moving with this 
project, of course, always depends on Federal and State funding 
at or above current levels.
    But I want to get into some of those traffic counts that I 
talked about earlier, Senator, and I'm not going to go through 
this whole chart in the interest of time, but I'll just point 
out a few highlights. On highway 8, starting from the top of 
the page, you can see that 23 North to Stanley has a high of 
4,430 vehicles, a low of 1,675, and the way our traffic 
engineers do that, they average a corridor. And that's 2,454 
vehicles, that's a 301 percent increase from what we've seen in 
2006. It's a tremendous increase in traffic. Highway 22, there 
too, average of 1,869, a high of 3,685, a 73 percent increase.
    But on 23, from Watford City to highway 1804, 1804 is just 
on the west edge of the city of New Town. On that stretch, we 
have a high of 6,460 vehicles a day, with an average of 2,304 
vehicles, 70 percent increase. Then, if you look at the next 
line, it's the high number. From 1804 to highway 83 is a high 
of 7,300 vehicles a day and a low of 1,268 in some segments, 
and the average for that corridor is 2,095. That's a 31 percent 
increase. And so on and on, highway 72 which is just off 
highway 22 west of here. That has an increase of 209 percent.
    And so what we're seeing out here is unprecedented in 
traffic growths. Typically we see three to 10 percent maximum 
growth, and here we're seeing these--on an annual basis--and 
here we're seeing these kinds of numbers.
    Now that's--that includes trucks, Senator, but on page 
four, on the top of that page, we're going to see some truck 
numbers and those two are astonishing. Highway 823 to Stanley, 
a high of 905 trucks per day, with an average of 744, a 629 
percent increase. And the number you had shown earlier on the 
chart, on highway 23, a high truck ADT of 880, with an average 
of 625, a 274 percent increase.
    And I know I could go into these details, but Senator, in 
the interest of time, what I'm saying to you is that traffic 
has increased at unprecedented amounts here, and what we're 
going to have to do is make sure that we address those issues.
    And while we've made significant transportation improvement 
in the New Town area, including the Four Bears Bridge, we 
recognize there's been an increase in traffic, and I've asked 
staff to immediately start scoping highway 23 and 8, as I've 
already mentioned, to address the traffic growth.
    The State of North Dakota and the DOT are doing more than 
ever in the area. However, Federal and State funding for 
transportation projects is essential to the growing needs of 
the energy industry in Western North Dakota. Federal dollars 
are so important for State residents who are working hard to 
serve the energy needs of our nation today and in the future.
    Public input that we took this spring at many regional 
meetings, we had eight regional meetings around the State, 
Senator, and the preliminary input includes statements like, 
``The residents really want more transportation 
infrastructure.'' They're concerned about traffic increases, 
especially in Western North Dakota, and public expectations are 
growing, especially for load-carrying capacity and wider roads.
    Moving on to page five, we certainly recognize the benefits 
of transportation. The State has increased its financial 
commitment to transportation by enacting a $1.35 billion 
transportation dollar bill--excuse me, $1.35 billion--that's a 
big number--transportation funding in the State, and that 
includes an unprecedented sum of non- matching in State general 
fund, and then it also includes Federal dollars, such as the 
regular Federal program ARRA and the State's money. Excluding 
ARRA, we use 52 percent of our budget is based on Federal aid. 
And with ARRA, Senator, that's 57 percent.
    Even though our State's large road network has few people 
to support it, North Dakotans pay more than the national 
average to support the Federal surface transportation programs. 
The per capita contribution to the highway account of the 
highway trust fund attributed to North Dakota is $161 compared 
to a national average of roughly $109 per person. So, this is a 
per capita contribution of 48 percent above the national 
average.
    There are large benefits, as I've said before, from 
transportation infrastructure investment, job creation and a 
general boost in the economy, and safety, as I've mentioned 
before. Preserving and improving the roads in pursuit of smooth 
surfaces, appropriate roadway with guardrails and signage and 
pavement marking is essential to our mission of providing a 
safe transportation system.
    Moving to the bottom of page five, clearly our ability to 
continue to invest in surface transportation infrastructure in 
North Dakota will depend in part on Federal surface 
transportation funding levels.
    Moving on to the top of page six, our association ASHTO has 
recommended for the 6-year period, 2010 to 2015, proportional 
increases in the highway and transit programs over the prior 6 
years to $375 billion, and $93 billion respectively, plus 
funding for other programs. Another relevant factor to funding 
are the level of inflation. The highway industry has been hit 
hard by inflation during the past decade. From 2001 to 2010, 
the construction cost index for North Dakota's projects is 87 
percent. So in other words, we're spending 87 percent more in 
2010 than we did in 2001 to get the same work done.
    We're concerned about a number of aspects of the bill 
that's being considered now, in that it creates a large new 
program funding only metro areas with a population of 500,000 
or more, and provides funds for large nationally significant 
projects, high speed rail and infrastructure banks. And the 
next paragraph, Senator, in regard to that, we're very pleased 
that bipartisan rural mobility legislation in 3485 was recently 
introduced in the U.S. Senate by Senator Barrasso, yourself, 
Mr. Chairman, and 11 other Senators. That legislation basically 
takes the position that if new legislation is to dedicate 
significant funds to discretionary highway programs only for 
large metropolitan areas, the legislation must also include a 
significant counterpart program of funding for rural States. 
We're hopeful that efforts like this will ensure that the final 
legislation will not ignore national need to continue to invest 
significant Federal transportation funds in rural States, as 
well as in urban States.
    In the interest of time, Senator, I'll move on to page 
seven. The nation benefits from transportation investment and 
access across rural States. We serve as a bridge for truck and 
personal traffic, we enable exports to serve the nation's 
ethanol production, largely--and the energy extraction 
industries, which are located largely in rural areas, and our 
lifeline for remotely located and economically challenged 
citizens, enable businesses to traverse sparcely populated land 
and provide access to scenic wonders. Our bridge serves--our 
State serves as a national bridge for connectivity. Just over 
90--excuse me--just over 59 percent of the truck traffic using 
North Dakota's highways does not either originate or terminate 
within the State.
    Moving on to page eight, essential service and agricultural 
natural resources and energy--a significant portion of the 
economy in our State is based on ag, energy production, and 
natural resource extraction. Governor Hoeven's economic 
strategy has identified ag energy, advanced manufacturing, 
technology-based businesses, and tourism as growth industries, 
because North Dakota holds a competitive advantage in these 
areas. Ag is one sector of the economy where the United States 
has consistently run an international trade surplus, not a 
deficit.
    Apart from its value to the State, there's a strong 
national interest ensuring that ag products and natural 
resources have the road network needed to deliver product to 
market, particularly export markets. North Dakota is a major 
contributor of energy production in the nation. We're currently 
fourth in oil production and contain a large coal reserve.
    On page nine, I want to talk a little bit about avoiding 
complications or increases in regulatory requirements. We 
certainly support the Federal Highway Administration's every 
counts initiative to streamline the project development 
process. However, any new statutory provisions that add 
requirements and regulations will add time to the program and 
project delivery and increase costs.
    Moving on to the last page, Senator, 10--page 10. Before 
closing, let me note that while we want a surface 
transportation authorization law, that's good for North Dakota, 
enacted as soon as possible, without a reauthorization law, 
States and businesses are faced with operating under current 
program extensions. While we're currently operating under such 
an extension through the end of 2010, we suspect that some will 
say that any--that any next extension should be short. However, 
short extensions make program delivery less efficient and 
discourage investment by the private sector. So if there are 
extensions, they should be practical length and perhaps a year 
or even more, Senator.
    I want to say that transportation is a good investment. You 
know, in today's society, surface transportation was built by 
our forefathers as an investment in our country. Today, that 
investment is taken for granted and everybody automatically 
expects a strong transportation network. Many people have 
invested in new forms of communication in their home and are 
spending more than ever on items such as cell phones and the 
internet. It's interesting to make the comparison, it's not 
unusual to pay $500 for a cell phone, but yet the average cost 
for transportation in a household is $109, so it's interesting 
to say that--the whole point is that transportation is a good 
investment.
    In conclusion, Senator, it's essential that Congress, 
through the reauthorization process, recognize that increased 
Federal investment in highways and surface transportation in 
rural States is and will remain important to the national 
interest. Citizens and businesses of our nation's more 
populated areas, not only residents of rural America, benefit 
from a good transportation network in and across rural States 
like North Dakota. With such legislation, we will be equipped 
to address transportation issues in the highway 23 corridor, as 
well as elsewhere in the State of North Dakota.
    And that concludes my formal statement, Senator and 
Congressman, and I'll be willing to answer any questions that 
you may have.
    [The prepared statement of Mr. Ziegler follows:]

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    The Chairman. Thank you, Director Ziegler, for really an 
excellent statement. You know that a key reason I'm doing these 
hearings is to lay on the record the case that needs to be made 
for additional Federal investment in our transportation system 
in North Dakota. I've been told that if there are going to be 
any additions to funding, beyond the formula funding, if 
there's not been a hearing and a hearing record established, 
that it is going to be very difficult to get any funding beyond 
formula funding.
    And as you know in the last bill, we were very fortunate to 
get substantial funding beyond the formula for North Dakota, 
and of course that carried over into the stimulus bill, or the 
Recovery Act as it's called. And so, we think it is very 
important to lay on the record, just as clearly as we can, the 
case that is to be made for additional Federal investment in 
these road and transportation systems. And I think you've done 
an excellent job here this morning of laying out the case just 
as clearly as we can make it.
    My intention is to go to Chairman Levings next, and then to 
the mayor, and then we'll go to questions of all three members 
of the panel.
    Welcome, Chairman Levings. Thank you so much for being here 
and please proceed with your testimony.

 STATEMENT OF HON. MARCUS LEVINGS, CHAIRMAN, MANDAN, HIDATSA, 
                         ARIKARA NATION

    Mr. Levings. Thank you, Chairman Conrad. My name is Marcus 
Dominick Levings, Eh-Bah-Dah-Gish, White Headed Eagle, and I am 
the elected Tribal Chairman of Three Affiliated Tribes of the 
Fort Berthold Indian Reservation. I would like to thank the 
honorable Chairman Conrad, Congressman Pomeroy, and other 
distinguished officials for your visit to the Fort Berthold 
Indian Reservation, and for this opportunity to testify before 
you today. I have previously provided Congressional testimony 
regarding the many issues that effect Fort Berthold, our 
enrolled members and every person who resides in and around the 
Fort Berthold Reservation. We would like to thank Chairman 
Conrad for his efforts in addressing an issue that is important 
to all of us who reside here, the promotion of economic growth 
and improving safety of our most travelled roadways in the 
North Dakota oil patch, highways 22 and 23.
    As Chairman of the Three Affiliated Tribes and as a 
enrolled tribal member, I have witnessed the development of the 
Bakken Shale Oil Play and with it the possibility of increased 
economic wealth and opportunities to every resident of Western 
North Dakota, including the Three Affiliated Tribes and the 
Fort Berthold allottees. However, with those increased 
opportunities comes increased impact to our most important 
system of infrastructure, our roadways. The introduction of oil 
tankers, trucks, and other heavy equipment on our roadways has 
increased traffic numbers, increased the number of road 
fatalities, and severely decimated road conditions to the point 
where all roadways on the Fort Berthold Reservation are clearly 
overburdened and are in desperate need of upgrade.
    However, as today's discussion is centered on State 
highways 22 and 23, it must be clearly stated to this committee 
that these are not the only roads that have suffered with the 
increased oil activity. The tribal roadways of the Fort 
Berthold have been even more severely impacted by the 
development of oil and gas on Fort Berthold and the surrounding 
areas. The deteriorated conditions of the tribal roads are 
beginning to impact the ability of all our people, enrolled 
members and others, to safely travel even in the best of 
weather conditions.
    The Fort Berthold Reservation is criss-crossed with a 
complex web of different road types, and with even more complex 
jurisdictional web as to which governmental bodies policies, 
monitors, and ultimately responsible for the maintenance and 
upkeep of these roadways. In short, this creates a very complex 
problem that can only be addressed through cooperation by all 
the governmental bodies who ultimately share in the benefits of 
the increased economic development that has risen with oil and 
gas activity in the Bakken Shale.
    As the main throughways on the Fort Berthold Reservation, 
State Highways 22 and 23 have seen a steady and dramatic 
increase in both light and heavy traffic. According to a report 
in the Minot Daily News, the four-and-one-half mile stretch of 
highway from the Four Bears Bridge east to New Town area sees 
over 6,300 vehicles daily. This roadway, along with Highway 22, 
serve as the main routes for tribal members and others to 
access employment, healthcare, food, fuel, recreation, and 
other basic services that are scarce in most areas of the 
reservation.
    The safe and improved conditions of these roadways are 
vital not only to the increased economic opportunities for the 
reservation, but are absolutely necessary to the improvement to 
the basic quality of life of our enrolled members.
    It is the position of Three Affiliated Tribes, and I 
believe this view is shared by other local communities, that 
Highways 22 and 23 should be, at minimum, upgraded from a two-
lane to a four-lane highway system. Further, State, County and 
Tribal law enforcement would work cooperatively to ensure 
traffic and load-restriction laws are complied with to ensure 
the highest level of public safety is property established and 
maintained. These improvements are vital, not only to the 
continued economic development of Fort Berthold and western 
North Dakota, but to ensure the residents of this area are 
sufficiently protected as the oil activity continues to 
increase for the next 15 to 20 years.
    Presently, the Fort Berthold Reservation has a multitude of 
different road types, that are classified by the governmental 
body responsible for maintenance and upkeep. Specifically, I've 
listed the roadways on Fort Berthold, and the tribe is directly 
responsible for maintenance and upkeep of a majority of these 
tribal roadways being directly impacted by the increased oil 
and gas activity on this area. Rural minor arterial roads, 
141.2 miles, community residential streets, 28.7 miles, rural 
major connector roads, 191.5 miles, rural local roads, 729.5 
miles, city minor arterial roads, 6.8 miles--total miles on 
Fort Berthold Reservation that we have to maintain is 1,097.7 
miles.
    In addition to the tribal Indian reservation road 
inventory, with the BIA there are also 664.4 miles of county 
roads, 150 miles of State-owned roads that are located within 
the boundaries of the reservation that both members and 
nonmembers use for daily commutes.
    As I stated previously, the issue of roadway safety and the 
need for improved conditions is not limited to merely Highways 
22 and 23, but is a problem that all roadways on Fort Berthold 
Reservation face and will continue to face.
    The Three Affiliated Tribes, BIA highway system is 
currently beyond its acceptable life span. The current tribal 
roadways were built with 2 inches of bituminous asphalt, in the 
decades of 1970's and 1980's. The engineers, at the time, were 
not aware of the future oil boom, and did not design the BIA 
road system to withstand the heavy amounts of truck traffic 
associated with an oil boom, and the lack of planning shows 
today.
    Present-day travel on our BIA route today can only prove to 
be very hazardous and expensive. It costs hundreds of thousands 
of dollars each construction season to keep up with the repairs 
of all of our paved routes and infrastructure. The highway 
system is so old that the roadbed begins to deteriorate 
immediately right on the other side of the patch job. 
Currently, the list of improvements and repair jobs exceeds the 
amount of revenue coming in.
    It is the goal of the Three Affiliated Tribes and our 
Tribal Road Department to keep our primitive gravel and our 
paved roads as safe as possible, despite the limited resources 
currently available to us. We understand and accept the 
responsibility of our road system, must handle the daily 
commute of multiple oil field trucks, daily school traffic, our 
elders, emergency and public safety services, and the daily 
commutes of all residents of the Fort Berthold Reservation as 
they move about in their daily lives.
    Currently, BIA Routes 12, 18, 6, 2, and 22 are in need of 
complete reconstruction and repaving to withstand the influx of 
oil field traffic, and the assurance of the safety of our 
school-aged children, our elders, and our emergency and law 
enforcement personnel.
    In total, the traveled roads require a minimum of 56.2 
miles of reconstruction. Even with the dedication of a portion 
of the oil and gas tax revenues received by the Three 
Affiliated Tribes through our tax agreement with the State of 
North Dakota, our current IRR budget does not have enough money 
to reconstruct even a single route on Fort Berthold 
Reservation.
    The Three Affiliated Tribes is faced with a unique 
situation. While we welcome and encourage the development of 
tribal oil and gas resources, and yet must unfortunately 
welcome the devastating impacts to our already fragile and 
outdated roadway system. It is this issue that the tribes, as 
well as other communities in and around Fort Berthold 
Reservation, now address this committee in order to find a 
solution.
    Chairman Conrad, Congressman Pomeroy, and other officials 
with us today, I would once again like to thank you for this 
opportunity to briefly speak to you regarding our collective 
issue, the safety and conditions of our roads. The ability to 
travel safely and securely is something that the Three 
Affiliated Tribes has continually strived for here on Fort 
Berthold Indian Reservation. The Three Affiliated Tribes, given 
our rural environment, recognize the need for safe and adequate 
road systems so our enrolled members can travel safely during 
their daily lives.
    We also recognize the need for an adequate road system so 
that the tribe, the Fort Berthold allottees and all of our 
enrolled members can benefit from the economic opportunities 
that stem from the Bakken shale oil field.
    However, while we recognize and fully support this 
committee in its study, what can be done to improve State 
Highway 22 and 23, we cannot let this committee and the 
surrounding local communities overlook the simple fact that 
much of the continued oil and gas development in this area will 
also severely impact our travel roads.
    We respectfully remind and request this committee to review 
the need for improved and upgraded roads as a problem that 
requires solutions for all of our roadways, including the 
Bureau of Indian Affairs roads that the tribe is responsible 
for.
    It is simply unacceptable to ignore these non-State roads 
on the reservation when the economic benefit derived from the 
use of these roads benefits not only the Fort Berthold 
Reservation, but the surrounding communities, counties, and the 
entire State of North Dakota.
    Once again, on behalf of myself and the Three Affiliated 
Tribes, I would like to thank the committee for inviting me to 
testify to you today. I will be happy to try to answer any 
questions you may have. Thank you.
    [The prepared statement of Mr. Levings follows:]

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    The Chairman. Thank you.
    And next we'll go the Mayor? Please proceed with your 
testimony and then we'll go to questions of the whole panel. 
Welcome.

     STATEMENT OF HON. DANIEL URAN, MAYOR, CITY OF NEW TOWN

    Mr. Uran. Good morning, and thank you, Senator Conrad and 
Representative Pomeroy and the Budget Committee for taking the 
time to hear our concerns today on Highway 23. When we talked 
about--when you guys brought up the chart a little bit ago 
about bringing back 2 dollars for every dollar or whatever, and 
investing in roads and safety, what's one life worth? If we put 
a billion dollars into Highway 23 and we save one life, is that 
not worth it?
    The number of fatal accidents that have been happening in 
the New Town area and the Fort Berthold Indian Reservation has 
everybody concerned. You know, we're losing loved ones, 
friends, relatives, neighbors--whatever amount of money we can 
put in to Highway 23 or all of our roads south of New Town, 
north of New Town--any of the highways, any of the county 
township roads, anything--if they can save one life, it's worth 
it.
    Highway 23, which ids what we're here talking about today--
I don't want to give away my age, but I can remember it, 
traveling to Minot on that road when I was a kid. It's got to 
have been built in the 50's or 60's. I don't know that there's 
been a whole lot improvement done to it since that time, other 
than maybe repaving it once in a while. It's, you know, built 
for the traffic of the 60's. We're in 2010.
    That highway, it runs right through the main street of New 
Town. New Town is fortunate enough where we're looking at 
replacing--reconstructing Main Street in 2012. We've received a 
grant through the State--$2 million is Federal money, $200,000 
is from the State. Without that $2 million from the Federal 
Government, we wouldn't be even able to consider reconstructing 
Main Street, so it's greatly appreciated. I mean, that shows 
how important Federal dollars are to our area.
    We probably can't fit a four-lane through New Town or 
across the bridge, but we can probably fit three lanes, a 
turning lane, and that's the plan that we have right now for 
reconstructing Main Street--is to put three lanes, a turning 
lane in the middle. The last traffic surveys warrant--show we 
warrant traffic lights, OK? Along with traffic lights come the 
$250,000 bill, per light. You know the project is about $3.6 
million, so right now that's just figuring two stoplights. So 
that, the city share is going to be $1.4 million that we have 
to come up with. But, we are trying to address that traffic 
problem in New Town.
    The traffic in New Town, right now, I've attached a map 
that shows the traffic surveys that have been done over the 
last--since 2006. Traffic in New Town is up 27 percent, 
anywhere from 25 to--25 percent on each intersection. Since 
2002, it's up 53 percent.
    The truck traffic alone, just a couple of examples, the 
truck traffic is up 123 percent on--at West Avenue. It's up 373 
percent at Sioux Place since 2002. I mean, we have all kinds of 
concerns about pedestrians trying to get across the street; 
imagine trying to cross the street. I work at the school 
district, I go to the bank, I walk to the bank at least three 
times a week to make deposits and do banking business. 
Sometimes you can stand there 5, 10 minutes to get across the 
street.
    Luckily, we haven't had any fatalities as far as 
pedestrians in the city of New Town--so far. But, you know, 
we're addressing that problem.
    The city of New Town is also selling a lot of water to the 
oil field, you know, for frack jobs and what-not. I think, from 
January through May I figured out it was over a million and a 
half gallons a month that's sold to the oil field. All of that 
is trucked, and most of that traffic goes down Highway 23, most 
of that truck traffic. And right now, we're taking a portion of 
that revenue that we receive off the sale of water and we're 
putting it away to help with the Main Street project, to help 
raise that $1.4 million. I mean, we feel that that's part of 
the traffic problem, so we're using part of that revenue to 
help fix the problem.
    The city continues to grow, the tribe is putting in a new 
health center up here. Along with it is going to come--I don't 
know, I've heard anywhere from 65 to 120 homes. We have another 
housing project planned for west of New Town--all of that's 
going to add to the traffic that goes on Highway 23, you know?
    And they're talking the Bakken field to be here the next 40 
years. Well, our highway is already 50 years outdated, what's 
it going to be like in another 40 years? So, we need to invest 
in Highway 23, not only Highway 23, but Highway 22. My sister 
just came up from Dickenson yesterday and asked me if I had 
been on that highway. There's big holes and what-not in there, 
she said, it's unreal, the shape of that highway.
    Myself, I drove to Stanley the other day, there's a 55 mile 
per hour speed limit on Highway 8, coming back, I was passed 
three times by semis. I had my cruise set on 55 miles an hour. 
I drove to Minot, here, Monday, July 5th. Between New Town and 
Plaza, I was passed 8 times--not by oil field traffic but just 
by holiday traffic, for the Fourth of July. There was twice, 
there was about 6 of us in a row that had our cruise set on 55 
miles an hour, there was twice that vehicles come around and 
passed all 6 of us at one time, you know? That's an accident 
waiting to happen. And those types of things need to be 
addressed.
    So, I guess I would just like to say any Federal dollars 
that can come our way, that can save a lift, that can improve 
our roads, improve the safety for not only the residents of New 
Town and Fort Berthold Indian Reservation, and not only for 
those that live along Highway 23, but any tourist or anybody 
who travels through on Highway 23, we don't want to lose that 
life.
    Thank you.
    [The prepared statement of Mr. Uran follows:]

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    The Chairman. All right, thank you very much. Excellent 
testimony.
    Let me just ask you, Mayor, we have some in our society now 
who say the Federal Government's got a dramatically cut back 
programs like this one. What would your response be to that? 
What would be the result?
    Mr. Uran. I understand, you know, living under a budget, 
but I also understand that when there's a dire need, you have 
to address it. And I think there's a dire need, here, I don't 
believe that we can put this off any longer.
    The Chairman. Chairman Levings, what would you say to those 
people who might be listening or reading this testimony and 
they're of the belief the Federal Government should cut this 
program dramatically? Federal Highway transportation dollars, 
specifically.
    Mr. Levings. Chairman Conrad and Congressman Pomeroy, 
respectively, all audience members, as a lifetime resident of 
Fort Berthold, since May 1966 I've been living here. There was 
only a year and 9 months I moved away to go to work in Oregon. 
And I've never seen such congestion, I've never seen such Grand 
Central Station, I've never seen so much activity.
    Four Bears is where I grew up--western part of the 
reservation, right on the reservation line, actually, where the 
Wells-Levings Homestead is at. And I lived there from day one. 
It was a four-walled, frame home from Beaver Creek, south of 
the reservation after the flood of our homelands, Alba Woods, 
North Dakota. And we moved out here and relocated up on 
hilltops--no running water, no road, no electricity, nothing. 
Coal and water were hauled to heat the home and the water came 
from the Little Swallow Spring across Highway 23, there, and it 
was by team horse. These were the times that my parents and my 
grandparents lived.
    So, then to live that life, as well, my father raised us 
there. I didn't have running water until August of 2005. I'm 44 
years old, so 39 years, I hauled water. So, I kind of have an 
opportunity to see what the hardships are of our hearty people 
of the Mandan Hadats and Arikaras, as well as western North 
Dakotans--as all North Dakotans go. You all went through that.
    Today, with this traffic boon that we're dealing with, I 
think this is the second or third one for western North Dakota. 
Today, there is just a fear factor, now, as the Mayor has 
spoken of. In August 2009, I and the new town partial Mayors--
Watford City Mayor, Minot Mayor, Stanley Mayor, Williston 
Mayor, Killer Mayor got together and we had a press conference 
at the tribal headquarters--live on KMHA 91.3 and we talked 
about a four-lane on 23 and 22.
    So, about 12 months ago, we addressed this because we were 
losing too many lives. There was accidents, and more accidents. 
July 1997, my brother was killed on Highway 23. And he wasn't a 
driver, he was a passenger. And it was devastating to my 
mother, Rosalda Dwa Grady Wells, and my father, Marcus Wells, 
Sr. So, I know full well what Dan was speaking of, as 
Congressman Pomeroy was speaking of.
    That was before this boom. At that time there was a tail 
end of the 80's and 90's oil boom. Today, it is very, very 
dangerous to drive 23. I had a weed and seed meeting, right 
here, in this Arikara Room of the Four Bears Casino Lodge with 
the DOJ attorneys, three of them--Claire Hawkhalter, Rick Volk, 
and I can't remember the third one--Lynn Hyme, I think. We were 
all here and we were talking about the traffic. And they said, 
``Chairman, we don't even drive 23. We're going to go back out 
22 and go back down to Dickenson and go back to Bismarck.'' 
They know the statistics. They know the fatalities as 
Congressman Pomeroy was alluding to, those crosses that were 
put on those 23 line and 22. And that's where they drove out. 
Now, if those are Federal attorneys, they know where to stay 
away from, the concern of the narrowness.
    The rumble strips--now the road is narrower. Do you think 
about that? So, it's a good thing, it wakes you up a little 
bit, but now you've got to, you know, navigate a narrower strip 
on each side, because there's one in the middle, too.
    So, the four-lane, in August 2009, Chairman Conrad and 
Congressman Pomeroy is what we're looking for on 23 and 22. 
When I went up to the Mount Churro County celebration last fall 
and the Williston Mayor cornered me, the Stanley Mayor corned 
me, too, and they said, ``OK, Chairman Levings, you need to 
help me. You need to help both of us,'' they said. ``We need a 
four-lane on 1804 to Williston, we need a four- lane on number 
8.'' Because it's all of us. And they know that we're working 
as a team. The Three Affiliated Tribes, Tribal Business Council 
and the Administration, we're working with everyone--the 
cities, the towns, the State, the counties--and our issue right 
now is, let's work this through. And it shows--it shows. I 
mean, this group effort has expanded. We went and did that with 
the water, we went and did that with getting that supply to 
everyone, and that's how we're carrying forward on this 
infrastructure.
    We don't think that working separately it can be tackled, 
because this is a Federal highway issue. Twenty percent of the 
fund comes from the State and 80 percent comes from the Federal 
Congress, and the White House, the ability.
    I think being here is a lot easier to understand. You can 
see photos in D.C., you can see photos in Bismarck, but when 
you actually drive these roads, it speaks for itself.
    I've got a picture, here, where there's 9 trucks on the 
Four Bears bridge. Wow, that old bridge probably would have 
collapsed. And I used to drive that, all the time. And I'm an 
original resident of Dragsford Village, house 214, from Head 
Start through K to 12 through New Town School Public District 
Number 1. I rode that bus. I remember how dangerous it was. 
Now, we've made strides on that, now we just need to expand.
    Talking about 22, the Mayor mentioned 22. It's called an 
obstacle course, really. The speed limit goes down to 45. And 
there's a little jump, by Beardon, it's actually like a little 
roller coaster, and you just hack it, you know? And then you've 
got to look behind you, too, because a truck is trying to pass 
you while you're trying to go through that obstacle course. So, 
it is very, very dangerous.
    In fact, at our groundbreaking for the fiberoptic with RTC 
which our Congressional delegation helped us receive $21.9 
million, I told the story, and I'll tell it again. On 22, 
coming down from the top by Bergbears, going into Beardon, I 
was in front of an 18-wheeler, and there was a bar behind the 
18-wheeler, and we were going down into Beardon and there was 
an 18-wheeler coming up with a white passenger truck and then 
an oil service truck coming up. Well, just as the Mayor alluded 
to, trying to pass six cars, well this passenger truck was 
going to pass a service truck and an 18-wheeler, and I and that 
18-wheeler that were behind me seen it coming, so we both got 
in the shoulder--literally got in the shoulder. And that truck 
didn't even slow down, it just zoomed right between both of us. 
And that's how close it was to having a head-on collision. And 
I'm the chairman of this tribe. And I was coming back from a 
funeral for a long-time realty officer for the Fort Berthold 
Agency and the funeral just concluded. So, that's real.
    And, it was a long answer to a short question, Chairman 
Conrad, Congressman Pomeroy, but these are actual facts.
    The Chairman. It's a good answer, and an important answer.
    Let me just announce that they've just informed me that the 
air conditioning is not working, they're working to fix it. I 
just invite anybody with a coat on, feel free to take a coat 
off. People who are standing in the back, there are some chairs 
up in front where you're invited to come and sit so you don't 
have to stand the whole time, there are chairs up in these 
first two rows for anybody who doesn't want to have to stand.
    Let me go to you, Mr. Ziegler. What would you say to those 
who are saying Federal highway program should be cut 
substantially from where it is?
    Mr. Ziegler. Mr. Chairman, Congressman Pomeroy, you know, 
our country's economy took off in the 50's, 60's, and 70's when 
we started putting out the interstate system. That's when we 
create iconic activity in this country. That's when we started 
saying, ``You know what? We need to be able to move people 
across this country.'' From the interstate system, after it was 
completed, obviously we need to look at the Federal highway 
system that connects to the interstate, and then from there, to 
the local highways that connect to the State highways.
    I think our country needs to continue its investment in 
infrastructure. If we don't, we will potentially become a 
third-world country. When--I haven't been there, but I've 
certainly heard stories about what's happening in China and 
what's happening in India, now, with their transportation 
systems. And with the infrastructure they're putting into 
place, and it's significantly above what America is doing. I 
think without that investment, our country is going to continue 
to fall backward from the economic power that we have been in 
this world.
    Speaking from more of a local perspective, I do understand 
the concerns of safety. And there are days, Mr. Chairman, 
Congressman Pomeroy, that we feel overwhelmed at the 
Department. Highway 22 got to the condition that it's in 
because we're working on Highway 85. And we had bad weather 
this spring, so the trucks has to be moved to Highway 22, or 
stop commerce. We knew we were going to have trouble. Walt 
Peterson, our District engineers, here, Jim Reading, our 
District Engineer from Minot are both here, as well as Grant 
Levi, our chief engineer. They've been working diligently to 
try to fix those potholes, but they get one fixed and a few 
trucks blow it up, again.
    But we have been planning. We have a contract in place; we 
had it in place months ago. But, this spring just took its toll 
on all our roads, we had a wet spring, we've had more water, as 
you know, in the State than ever before, and we have a contract 
with Knife River Construction who are going to fix those holes, 
and then do a heavy overlay. And it's costing us.
    We're going to be increasing the contract significantly. On 
Highway 22, we'll be spending $2 million more, and that's all 
State money. It's coming out of Walt's budget, and he's 
squirming a little bit about that, but we're going to have to 
do it.
    Also, on Highway 73, we're going to spend a million dollars 
more than the contract because of the breakups there, due to 
the oil industry. That is coming out of the Central Office 
maintenance budget. So, we're working hard to keep the roads in 
good condition. What it's going to take for our planning to be 
successful in the future is a long-term transportation bill 
that addresses the needs of the infrastructure, not only in the 
country, but right here in North Dakota.
    The Chairman. Director, let me ask you this question. In 
your testimony, you referred to your National organization as 
calling for--if I'm correct in my math, somewhere around $78 
billion a year in funding.
    Mr. Ziegler. That is correct, Mr. Chairman.
    The Chairman. For transportation. As you know, the current 
Trust Fund provides $31 billion a year. So, if we kind of put 
this together, we have $78 billion a year in need, we have $31 
billion a year in funding. We all know that we've got to deal 
with the deficit, because the debt is growing too rapidly and 
that threatens our long-term economic security. So, in the 
short term of this period of economic weakness, it's been 
important for the Federal Government to run deficits, to give 
lift to the economy, to provide liquidity to prevent a 
collapse. We know, very soon, we have to pivot and begin 
focusing on bringing down this deficit and debt. Highway is not 
immune from that, transportation's not immune from that, we're 
going to have to deal with, over the medium-term and longer-
term, bringing down this deficit and debt. That means it's 
going to have to be paid for. And right now, we have $78 
billion a year of need, identified by Mr. Ziegler and his 
colleagues across the country, and $31 billion a year in 
funding. That's a $47 billion shortfall.
    So, somewhere, we're going to have to come up with 
additional resources, and a lot of them. And I know, people 
say, ``Well, we've got to improve the roads,'' but where is the 
money going to come from? If people say, ``No, you can't raise 
revenue,'' then the only alternative is going to be to cut 
spending, and if we cut spending on roads from what we're 
already doing, which is insufficient, I think you can think for 
yourself what the result will be.
    I mean, these are hard facts. This is reality. You know, 
the best thing in the world would be for us to believe we 
didn't have to do anything--don't have to cut spending, don't 
have to raise revenue, but that's not real. We can see, right 
here, we've got a State need that is also a national need. 
We're not just asking on behalf of North Dakota. Yes, we get $2 
back for every dollar we send Washington in transportation, but 
we are part of a national network. And this energy play is part 
of a--has a national benefit, because we are helping reduce our 
dependence on foreign oil. And we're spending a billion dollars 
a day buying foreign oil. And that money is going to place 
where we don't have a lot of friends. So, it makes no sense to 
continue this policy of sending a billion dollars a day to 
Venezuela, to Saudi Arabia, and the rest--Kuwait. How much 
better off would we be if that money stayed home?
    But, we're not going to produce more energy here unless we 
have the transportation network to help us do it. And if we're 
going to have the transportation system that is needed to help 
us with this energy development, it's going to cost money. And 
we don't have the money, right now, to finance what's already 
being done, much less to do anything more. And the testimony--
the very clear testimony that has been here today that we're 
going to need to do more.
    Is that fair to say, Director Ziegler?
    Mr. Ziegler. That is a fair statement. A very fair 
statement.
    The Chairman. Chairman Levings? What is your reaction to 
that?
    Mr. Levings. I think--Chairman Conrad, Congressman 
Pomeroy--that being here, driving the road, stopping at 
intersection, trying to get on 23, trying to get on 22, trying 
to get on number 8, trying to get on 1804, 37--as you go across 
the reservation, it is here. So, our focus, I think, as our 
task force started this initiative in August of 2009 was, let's 
get 22 and 24 a four-lane. I heard the Mayor say it, and I 
heard Congressman Pomeroy say it--you can't really put a value 
on a life. While we have a few members in the audience, here, 
who have lost lives this last year, and my condolences still go 
out to them and wipe their tears, because we need to prevent 
that.
    We know, you know, the divided highway with the four-lane 
will probably have a different speed limit. However, it will do 
a good job of trying to prevent those head-on scrapes and head-
on collisions. We just had one yesterday, I don't know if Mr. 
Ziegler told you that, Chairman Conrad and Mr. Pomeroy. That's 
what happened. And it was roughly around 6 p.m. last night. So, 
that was over here on 23 in Partial. And so, I mean, that's No. 
8, there.
    So, it's real--or, 37, excuse me. And it's never going to 
go away because we're just getting started. So, I commend our 
Congressional delegation for getting this Federal Lands cap off 
the oil and gas development, now we just need to deal with the 
progress, is to take care of the infrastructure needs, because 
without this oil and gas development, our tribe would still be 
in a different situation.
    So, we're working with all of the needs. We have the Bureau 
routes and tribal routes, but I called Governor Hoeven myself 
on 22, because I drove through that obstacle course, took 
pictures on my Blackberry, emailed them to Ryan Bernstein and 
they got the issue addressed. By July 15th, they're going to 
get of those potholes filled in, and they're going to get it 
all restriped and back in good condition.
    But that's a temporary fix. It's going to be like that a 
month down the road. We have Bureau routes, tribal routes that 
are connected. We all need to have the same effort but again, 
the Federal highways having a heck of a time on their heavy 
highway--now imagine the tribe. We've got car and pickup 
traffic conditions, truck, compactions when they buildup these 
roads. Basically, our tribal roads were old cow trails. And 
then they just put a little bit of gravel on them and they kind 
of built them up, and then they put, you know, some mix on some 
of them.
    So, now imagine having 18-wheelers across that. All of our 
roads were built for pickups and cars and maybe a bus or two, 
but we also have ag. This picture I showed you with these 8 
trucks on the Four Bears bridge was just 2 days ago. A lot of 
those trucks are ag. So, we've always had that. But the tribe 
and the Bureau routes, we need the funding, as well.
    So, the IRR program as Kurt Wells has put together for us, 
we need that, as well. And we want to work as a team, we want 
to get this worked out in a team effort, because what's good 
for Fort Berthold is good for everybody. As I said earlier, 
about the water, well, we did that in healthcare, too. And it's 
with the Congressional delegation's assistance. We want to be 
working through a constructive effort versus, ``Well, we're 
going to be over here and we're going to do our own thing,'' 
well, we can't afford that. Every year, I think, we put in over 
$2 million on maintenance and that's over and above the general 
contract. So, that's General Fund money. That's revenue made 
out of the casino, lease income, other areas. That could be 
going to services to our people, while we're putting them on 
the roads.
    The Chairman. All right.
    Mr. Levings. Thank you.
    The Chairman. Mr. Pomeroy.
    Mr. Pomeroy. Mr. Chairman, I think that you've elicited the 
key facts for the record. I would just--I just go back and 
circled some of those that I pulled out of the Commissioner's 
testimony.
    59 percent of truck traffic neither originates nor ends in 
North Dakota. Thirty percent of ag crops grown here are 
exported, and I bet we've got a number of commodities where the 
figures would be substantially higher than that.
    Farm to market roads, the interstate, the network of roads 
critical to our ag export dimension benefits to the entire 
country. Energy production, we all know that story, one that's 
unfolding and is going to have a multi-decade dimension to our 
contribution to the Nation's energy supply. And then the final 
one, and one I think that we need to talk about a lot more in 
framing this issue--North Dakotans are paying way more than the 
national average, relative to highway taxes, highway taxes per 
miles driven, you live in a rural area, you drive more miles, 
you pump more gas, you pay more money. So, our per capita 
contribution of $161, compared to the National average, $109, 
really puts some balance into this donor/donee argument that 
we're on the receiving end, we're paying 50 percent higher gas 
taxes out here. We're doing our part.
    And, Mr. Chairman, thank you for this--and I want to thank 
the panel members for their excellent testimony.
    The Chairman. Any other final thought any of the other 
panel members would want to make before we go to the next 
panel? Director Ziegler?
    Mr. Ziegler. Just one, Mr. Chairman, in that--and I know 
I've talked about it a lot in my testimony, but if we 
understand the--a new transportation bill may take some time, 
we understand that. We understand the reality of that, as you 
have said. We ask, though, that for our planning purposes that 
if we have to work with continuing resolutions that we get at 
least a year--if not 18 months--so that we can continue 
planning out ahead. Because as you know, from an environmental 
perspective, it takes time to create projects and move earth 
and put down pavement. It takes time.
    And so, if we know where we stand, we can plan, and pick 
the highest priorities and make those happen.
    The Chairman. All right.
    Mr. Ziegler. Thank you, Mr. Chairman, again----
    The Chairman. Very important--very good thought.
    Mr. Ziegler [continuing]. For the opportunity to be before 
you.
    The Chairman. Yes, sir.
    Mr. Ziegler. And you, Mr. Pomeroy.
    The Chairman. Mayor?
    Mr. Uran. Just to add, when you're talking about what we 
pay in highway taxes, what about the royalty income that the 
U.S. Government gets out of all of this core land that's 
flooded that goes back into the Federal Government? I know, 25 
percent of that, the Federal Government keeps. Seventy-five 
percent comes back to the State, through the State, to the 
counties and the school districts.
    The leasing alone, New Town School District--I worked for 
the New Town School District--our cut was $22 million. And 
that's just a cut of that 75 percent--of that 75 percent, 25 
percent goes back to the--or, 25 percent of that goes to the 
county, 25 percent to the townships and 50 percent to the 
school districts, and that's all of the school districts in 
Montrail County and New Town School District has about 50 
percent of the students in Montrail County, so our cut was 
like--well, actually, it didn't go by student, it went by 
acres, we have like 42,000 acres under there. Our share was 22 
million. The Federal Government kept 25 percent of that.
    The Chairman. Let me just say, when I make this argument to 
my colleagues, they say, ``Kent, North Dakota gets $1.70 back 
for every dollar you send Washington.'' I'm talking, in total, 
now. So, we are a huge recipient State of Federal money. We get 
far more Federal money into the State than tax money we send 
Washington. And so, we're depending on the year, fourth, fifth, 
or sixth in terms of return out of all 50 States, in terms of 
getting more Federal money into the State than we send. And 
that's from all sources combined.
    So, let me just say, as your representative, our colleagues 
are saying to us, and saying to us increasingly, ``Hey, your 
State gets a lot more Federal money than you send in tax 
dollars. And, you know, now you're down making an argument for 
more?'' I am. Because I think we've got a good case to make. We 
are participating in securing the energy future for the 
country, and of course we are the food supply--not only for our 
country but for much of the rest of the world. And you've got 
to have a transportation system to be able to do those things.
    But I just want you to know and people in North Dakota need 
to know, the argument my colleagues make to me is, ``Gee, your 
State gets a lot more Federal money than you contribute in 
taxpayer dollars to the expenses of the Federal Government, 
you're getting a pretty good deal already.'' That's the 
argument they make to me. And, you know, we have to acknowledge 
that fact and then make the case on why these funds are 
required.
    I want to thank--to stay on time, we need to go to the next 
panel. I want to thank this group of witnesses. Thank you, 
you've been excellent, you've helped us make what, I think, 
will be a very strong record. Next, I'll call on State 
Representative Kenton Onstad and Trustland Oilfield Service 
President Steve Kelly for the second. As they're coming, I want 
to acknowledge Senator Warner is here.
    Senator Warner, won't you stand and be recognized. Thank 
you for being here, Senator Warner.
    Representative Conrad, I especially like that name, won't 
you stand, please? Thank you for being here.
    As the second panel is being seated, I want to just repeat 
for those who are here why we are doing this. We are having an 
official hearing, where a record is kept, so that we can make a 
case to our colleagues on why additional funding is needed in 
North Dakota because of the energy activity and the 
agricultural activity, primarily, although we also have growing 
tourism, for additional investments in the transportation 
system above and beyond the funding that is provided via a 
formula. So, that is the reason that we're doing this.
    I want to welcome Representative Onstad and I want to 
recommend, also welcome Steve Kelly, the Manager and the Owner 
of Trustland Oilfield.
    Good to have you here. Kenton, why don't you proceed? And 
if you'd grab the microphone to have it in front of you so our 
stenographer can get all of your testimony.

  STATEMENT OF HON. KENTON ONSTAD, DISTRICT 4 REPRESENTATIVE, 
             NORTH DAKOTA HOUSE OF REPRESENTATIVES

    Mr. Onstad. Good morning, Senator Conrad and Congressman 
Pomeroy and welcome to District 4. You acknowledged my running 
mate, Senator John Warner, but I also want to acknowledge Tom 
Conklin is in the room, also.
    We're here to talk about Highway 23 and need to point that 
all the--Highway 22, Highway 8, 1804--they're really part of 
the whole investment part.
    The Chairman. Let me just stop you there, if I can, because 
while we have headlined this as Highway 23, we're really 
interested, as Director Ziegler knows, in the entire network, 
here. That's why we've done separate hearings in different 
parts of the State on the road network, we're going to be doing 
another one tomorrow. Because we're trying to build the case, 
not only for 23, but as we look at 23 and focus on that, 
because that's the busiest road, here, that we're looking at 
22, we're looking at 8, we're looking at the tribal network--
that all of these are part of the record that we're building, 
here.
    Mr. Onstad. Great. The question is, is investing in Highway 
23 a prudent, wise investment? And I'll say, absolutely. 
Addressing safety issues is very critical to this increased 
traffic. We need transportation investments to keep pace with 
current industry investments. North Dakota is sparsely 
populated--we've talked about that. We have the highest miles 
driven per capita in the Nation. And so that's an added cost. 
When you look at this current area, we have to travel 70 to 
100-plus miles to go to our major shopping areas--Minot, 
Williston, Dickenson, and Bismarck. So, Highway 23 really is 
that connecting route to those areas, so it becomes a vital 
route to this region.
    Agriculture is our No. 1 industry, and I suspect that will 
stay, but recent oil and gas developments in the region is 
emerging, along with recreation. Each of these industries are 
highly dependent on Highway 23, they're highly dependent on 
trucking. All of those industries--and the highway system is 
there to promote moving of produce, moving of products, but 
it's also movement of people.
    When we look at the demographics of 23, and it was pointed 
out on the one map, it's only one of two major highways that 
run east and west north of the Missouri River--one of two. And 
we refer to Highway 2, that's a four-lane highway. Where 
Highway 23 is just single. And it's also only one of two major 
crossings across the Missouri River, and that connects us to 
the Dickenson area, southwest North Dakota, through Four Bears 
Bridge. Other than that, the Garrison Dam. So, we have a 
situation of location that's really important to look at our 
highway system.
    We have to look at recreation in this area. We look at our 
recreational sites of Van Hook, Partial Bay, Pouch Point, New 
Town Marina, Four Bears Marina--all of those are dependent on 
Highway 23. On any given weekend, you have to note the 
population. On any given weekend at these recreational sites, 
it more than doubles a population of Montreau County of 7,000 
people. Those people are looking for houses in lots, and 
they're making investments in those recreational sites. And 
it's important that we, in turn, increase our investments in 
Highway 23 to pay a large part of that. They're a large part of 
our economy, the State's economy.
    So, now we have to look at oil and gas development. Oil and 
gas is completely dependent on trucking. We're not talking 
pickups and cars, we're talking heavy, heavy trucks. Tankers, 
rigs, those movements all are huge and very damaging to our 
system.
    Let's take one well site, one rig. One rig can drill about 
10 to 12 wells in a year, but to set up that rig, take it down, 
dismantle it, we're talking 1,000 truckloads into that one 
site.
    Take the hydraulic fracking techniques that's needed. 
They'll need as much as 900,000 gallons to as high as 2.3 
million to complete one fracking job on that rig. One tank 
alone, about 6,000 gallons, you're looking at 150 to 400 
truckloads into that one well site, plus the 1,000 that's 
already mentioned at that point. Now, that's just one well.
    We currently have over 60 rigs working in this area, over 
100 in all of western North Dakota, but 60 in this alone. So, 
you add that up, we're talking now, in the next year, 700,000 
truckloads to move in and out, establish these wells, we're 
looking at 200,000-plus loads of water that's going to be 
hauled to these well sites, we're now putting us over 1 
million, or close to, miles or truckloads a year traveling 
across our roads.
    Our highways were not designed for that kind of traffic. 
The interstate highway system is the only system designed to 
handle that. Again, remember, 22, 23, Highway 8--we're only a 
two-lane highway. The interstate's four-lane, along with 
Highway 2.
    So, where do these tankers get their water? Well, they're 
going to come out of the communities, the majority out of New 
Town and Partial. That's putting an additional strain on their 
own road system within those communities. And they're going to 
travel right down Highway 23. That's going to tributary out 
into our county and township roads, and you can see the 
destruction that 23 is having, the added destruction is 
happened to our county and township roads.
    Now, this isn't just short term. We talked about earlier, 
mentioned earlier, we're looking at 15 to 20 year of drilling. 
We're looking at 10,000, probably, to 15,000 wells being 
drilled in western North Dakota. Current technology, if it 
keeps improving, who knows where that is going to lead to in 
the future. As this thing expands, it's going to be here 
awhile, so we significantly need that investment.
    Francis Ziegler, the Director of DOT provided a lot of 
statistical data for the highway and I've added that to my 
comments, and you can see from 2006 to 2009, it's been a pretty 
stead increase. That increase in those last 3 years--just in 
the last year--has doubled that increase in the last 3 years. 
If you'll note in those, I-94, the traffic in I-94. Highway 23 
now is higher than I-94 from Bismarck to Dickenson, by their 
account.
    A local engineering firm, Aquinescefold, has had account of 
over 9,000 vehicles right downtown New Town. Over 9,000 
vehicles. And most of that is truck traffic--heavy truck 
traffic. I can't emphasize that enough, about that portion of 
that.
    And so this increased traffic, that leads to our safety 
concerns. Highway 23 has no turning lanes. We have no shoulder, 
to speak of, on these roads. Traveling up any of these hills, 
you'll notice on major highways you'll have a truck route, we 
do not have that. If you look at our intersections, a lot of 
them are just below, or on top of a crest of a hill. These now 
become major intersections for oil traffic, residential 
traffic, and so on. That's a concern. That's where we've had 
our accidents. And it isn't just a fender-bender, you're 
talking deaths. It's important to that point.
    It's kind of looking like you can put--a 6-inch pipe will 
hold so much water. We're trying to shove that same amount of 
water down a 1-inch hose. Everything gets speeded up, 
everything now becomes dangerous, and that's where we're at--
we're at a critical point, at that point. And so it's really 
reflective of our situation, and we--the necessary and the 
point--we need to make those investments in our highway system.
    Speak of a situation just last week. We had a few rainy 
days, I'm on Highway 23, we have a stalled tanker truck. And 
he's loaded. Because there's no shoulder there, and what is 
left there is pretty wet, and he's--he must be a veteran 
driver, he pulls over a little bit, but most of that truck is 
still sitting on the highway. Now, this would probably be OK if 
it was on a flat stretch, but it was right below the Crescent 
Hill, going up that hill. So, the safety concerns that we have 
because there's no where for him to go, there's no shoulder on 
that road for that particular person to pull off, to go around, 
you have oncoming traffic the way it is, that's a safety thing. 
And we have about--in that short term that I sat there, there 
must have been 15 vehicles behind me, including trucks to pass 
that point. And that's evident of the situation that we have.
    And so, to kind of come to conclusion, you know, 5 years 
ago, our current highway system could handle the agriculture 
economy of this area. But this current highway system is now 
limiting our growth, not only for oil development, they're 
making huge investments. The recreational areas are dependent 
on the road system, and those individuals are making 
investments out there, we need to, in turn, make the same 
investments in our highway system.
    And I again want to thank you for holding this 
Congressional hearing, and thank you for coming to hear our 
remarks, and----
    [The prepared statement of Mr. Onstad follows:]

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    The Chairman. Thank you. Thank you for that excellent 
testimony.
    And now we'll go to Steve Kelly, Manager and Owner of 
Trustland Oilfield Services.
    Welcome, and please proceed.

    STATEMENT OF STEVE KELLY, PRESIDENT, TRUSTLAND OILFIELD 
                            SERVICES

    Mr. Kelly. Thank you, Senator Conrad and Mr. Pomeroy. Good 
morning to both of you, and thank you for providing me with 
this opportunity to provide testimony at this hearing in this 
very important matter.
    In the interest of full disclosure, I will say I was also--
I'm a former attorney. I was the supervising attorney for the 
Northern Cheyenne tribes and the Three Affiliated Tribes for, 
combined, for over 10 years.
    So, I've had--and over those years, I've had numerous 
opportunities to write testimony for various tribal officials, 
so it's nice to be able to write your own, and be able to 
testify. And especially about something that I am very excited 
about and very interested in as an owner, now, of a trucking 
company. I own Trustland Oilfield Services. That company 
provides trucking--we haul freshwater and disposal water, 
saltwater, and we also haul gravel and scoria. In that company 
we also have--I have 10 trucks that haul tankers, and then I 
have a winch truck and then we have 5 roustabout trucks, so we 
have people out on the road around Newtown and Mandaree and 
Partial and Stanley every day.
    I also own a company called Trustland Consultants, LLC. And 
that's a land brokerage company, and I have field reps, about 5 
of them that go out every day, and they're also out on the 
road.
    Our shop is located 1 mile east of New Town, so we enter 
and exit off of 23 every day. And I would, personally, like to 
see the speed limit reduced to 45 past my shop, because I know 
we're going to get rearended making that right-hand turn into 
that--onto that road. And I'd also like to see a turn lane 
there.
    I figure that we, right now, I have had, in the last 2 
months at least 5 trucks go 24/7 for the last 60 days, except 
for 3 days within that period. I estimate that my trucks will 
put, in the roustabout truck, 700,000 miles on Highway 23 and 
the surrounding roads this year alone, and I only have 10 
trucks--I'm a small operator. OK?
    I don't know how many more miles--I have calculated how 
many more miles my field reps will put on, but they will--they 
certainly put on their share of miles.
    So, as an owner, when I was asked to testify, I immediately 
said yes. Because safety on these roads is paramount for me, as 
an owner of a trucking company. I cringe, at night, when I get 
a call after 10 thinking that one of my trucks might have run 
into somebody or somebody might have run into one of my trucks. 
Either way, it doesn't matter, because I own a truck, you're 
always, seem to me, the bad guy in that situation.
    And as a member of the Three Affiliated Tribes, a proud 
member, I also have a lot of family. So, there just about can't 
be a wreck without me having a family member involved, or at 
least somebody I know. Again, when I sat down to write the 
testimony, I immediately recalled 7 traffic accidents that have 
occurred in the last two and a half years. Three of them 
occurred east of New Town, three of them occurred west of New 
Town, between New Town and the turnoff on North Dakota Highway 
22. And then one occurred, it involved--I did get the call, I 
had my truck pusher, Esley Thornton, who's also my cousin--got 
in an accident when there was real bad fog, he was driving down 
to get some tickets signed, and the line on BIA 14, past 
Mandaree, the center line disappeared, there was no center 
line. So, when he went to look for the shoulder, the line on 
the shoulder of the road, he didn't realize he was going around 
a corner, and I don't think the other people did, either, 
because the fog was really bad, and they hit head-on, driver to 
driver. That was March 5th of 2010, he still is not back to 
work. And I don't foresee him being back to work. He pulverized 
his hip, and I don't see him being back to work until probably 
October 1 or later. So, these are the types of problem that we 
have to deal with and that we live with, here.
    With respect to the other six accidents, out of those six 
accidents, nine people were killed and three people were 
seriously injured. So, when we have accidents on these roads, 
they're bad ones. And out of those six, obviously the one 
involving my employee involved an oil company--three of those 
were oil-related. And three of those accidents included family 
members of mine, and all of them included somebody I knew. So, 
we take this very seriously.
    OK, in listening to the testimony I think I agree with 
everything that everybody's said, about--that we've outgrown 
this road. You know, when I sat down to analyze and take a look 
at and say, ``Well, you know, what would I--the one thing I 
would say about Highway 23, what would it be, and that is, 
'Nice ditches.' '' Because we don't have anyplace to go. There 
is, virtually, mo shoulder.
    Coming up here today from Minot, my wife has a place in 
Minot, I have a place that I stay at because I work here all 
the time, down at Pouch Bay. There was, somebody got a flat 
tire on a trailer. Well, he--when he got off, he got off the 
highway completely, and he was on the grass. And if you go back 
to Minot, or head east today at all, take a look, and you'll 
see where the State mows the grass so people can pull off, 
there, and do whatever they have to do. Trucks can't do that. 
You know, trucks can't do that--they can't get completely off 
the road because the slope is too steep. Especially if you're 
top-heavy, you'll tip over.
    So, you know, at the very least, you know, tell Congress to 
give us a shoulder to--to lean on.
    [Laughter.]
    Mr. Kelly. So, and you know, the other thing is, is people 
have to realize that we have to fight the elements, here, at 
any given moment, and we cannot predict when we're going to get 
blinding rain, blinding snow--we had, I'll bet you we had 90 
days of fog between the middle of January and the end of March, 
early April, where we had 50 feet or less of visibility. It was 
terrible. And so you get scared, and my drivers get scared, I 
get scared driving, and you don't know what to do. If you pull 
over, are you going to get hit from behind? You don't have a 
shoulder to pull over on, there's nothing there. And it's just 
not--it's just not 23, it's 22, it's 8, it's 1804, it's that 
way everywhere. And honestly, I believe it's a miracle that 
more people haven't been killed on these roads.
    The other thing--my statement about nice ditches, really 
only applies to New Town and everything east of New Town. West 
of New Town there is no shoulder, absolutely none, and what you 
have there--they did some roadwork a couple of years ago, where 
they repaved the top of the road, and they didn't go out to the 
end. And when they didn't go out to the end, they put an abrupt 
edge on each side of the road. So now, if you go over, you've 
got to fight it to get back on, and a car, you can flip. If 
you're on a truck and a trailer, you'll swerve that trailer 
over onto oncoming traffic to get back on. That's very, very 
dangerous. That--from the casino to off-reservation--and, by 
the way the road all of a sudden gets a shoulder once you get 
off reservation, I really don't understand how that happened--
it's treacherous. It really is. And something needs to be done.
    Just the other day I was driving along and you could see 
where a truck got off on the shoulder, he couldn't make it 
back, he ended up going down in the ditch--and by the way, the 
ditches on that side of the river are narrower, and they're 
steeper. But, anyway, he got down in the ditch, and he ended up 
going over an approach. And he was high-centered. So, you know, 
we need shoulders on the road, all the way, you know, wider 
shoulders, 5-foot, 6-foot, whatever it is, you know, all the 
way along Highway 23 and every other road, at the very minimum. 
At the very minimum, and you need turn lanes, and you need 
passing lanes. The second-biggest problem on 23 that I can see 
and my drivers see is from New Town east to Highway 8, you've 
got all of those hills in between here and the Scenic. And if I 
had my druthers, I'd be no passing all the way. It's already 
55, but of course, you go back to 55 and everybody wants to 
pass. Well, that should be four-lane, as far as I'm concerned.
    The Chairman. Now, you're talking from----
    Mr. Kelly. From New Town, east to Highway 8, to Stanley, 
the turnoff. Yeah, 7 miles. That's treacherous road, too, and 
so that needs to be taken care of.
    You know, and the other thing, we have a lot of deer and 
every now and then we get horses and cows that wander, and 
there's just no place to maneuver to avoid these animals, 
there's not. And so that compounds the problem regarding the 
shoulders, as well.
    OK, so, of course, now that I've pointed out all of the 
problems, I want to recommend some solutions. You know, I got 
on the internet, took a look at your site, Senator, and I saw 
where you had some meetings on the 85 corridor, and I believe 
it might have been on--the other one on Highway 8, I'm not 
sure. But anyway, everyone's vying for four-lane superhighways. 
I would not oppose that, obviously. But I know that, like 
you've pointed out, money's short in Congress and so they're 
looking for solutions. But I would say if you can do that, 
construction of four lanes from North Dakota 23 from Partial 
west to Watford City, or the junction of North Dakota 22 would 
be the second alternative, construction of four lanes from the 
junction of North Dakota 23 and North Dakota 8 and Watford 
City, or the junction of North Dakota 22--that's all warranted. 
I would really push for a four-lane--at the very minimum--four-
lane from 8 to 22. Because, you know, another thing I wanted to 
mention, if we're doing a frack job and we are hauling from New 
Town, west, and it is a Friday or Saturday night, I will not 
let my trucks haul after 10. Because between--there's a bar 
located just out--just on the other side of the casino, a 
couple of miles, and there's no shoulders and we've got heavy 
foot traffic between the casino and the Four Bears Village. So, 
I don't let our trucks drive between 10 and 7 in the morning, 
normally, if we're going back and forth. We will go to Watford 
City, or we will go to Killdeer, if it's feasible for us to do 
that, if we can justify it with costs.
    So, we really do need four lanes, and we need a pedestrian 
walkway from the casino to that Four Bears Village, we really 
need that. So, I am, you know, surprised that people have not 
been hit and killed by, not only trucks, but by cars, as well.
    And then I say on my fourth recommendation, if four lanes 
can not be constructed, many turn lanes and passing lanes need 
to be constructed along North Dakota 23 in terms of minimize 
the disruption of traffic in a lane. And I mentioned the 
walking path.
    And then six, oh, here's another problem. North Dakota 22 
where it meets 23, you have a little hill and you have a 
warning sign right before the hill, and you have a crest and 
you come down, and you have the rumble strips, and those help, 
I liked, Mr. Ziegler, what you said about the rumble strips, 
those do help. But, you know, if you have bad snow, or you have 
a lot of rain and a lot of thunder, or if people just fall 
asleep, they miss that stop sign, and they go right through 23. 
And there's a little approach there, and then a field. What I 
would recommend is that we put some flashing red lights on both 
the warning for the stop, and the stop sign, so that--as 
another safety precaution to warn people to stop, and then I 
would also recommend putting a little landing pad on the other 
side of that approach. It's--we have a lot of people who run 
that sign, and it is a safety hazard.
    OK, I hear a lot of statistics and figures being thrown 
around about fracking, and I, you know, and I agree with much 
of them--I think Representative Onstad's figures are a little 
lower than mine. When we frack, we normally frack 50,000 
barrels--not when we frack, but when we deliver to a frack 
site, we'll deliver 50,000 barrels. It normally takes us a 
week. It's about 416 trips for a frack, OK? Now, that's at 120 
barrels a load, which is within the weight limits for the road. 
When you put on weight restrictions in the springtime, between 
March 1, generally, and June 1, that's 90 days where you have 
to haul 65 to 80 barrels. It costs that oil company 50 percent 
more to frack that well, for the hauling alone, OK? So, guess 
what? They want to wait until summer and fall to do it.
    Now, we have had over 120 wells drilled, a month, for the 
last three or 4 months, and we'll probably have 100 a month 
drilled for--if the prices keep on going the way they are, for 
a very long time. Now, if I've got to--if I can't frack during 
those months, guess when they're getting fracked? They're 
getting fracked in the summertime when they're also drilling 
120 wells, and you end up having to make, I've done the math on 
this, that would be 360 fracks that you have to make up, OK? 
And 416 loads, I believe it's about another 150,000 trips that 
you have to make up, when you're already going 90 trying to do 
the fracks that they've already lined up. So, you have that 
extra stress on the roads that wouldn't need to be there if our 
roads could withhold the normal weights.
    So, if we're going to do some construction, let's construct 
these roads so that we don't have to have load restrictions in 
the springtime, OK?
    When the oil company's shut down, that means I have to lay 
off drivers, and I've got to wait 90 days. They may stick 
around, they may not. And then I've got to turn around and get 
them again. There's no stability, no continuity, and that's not 
good for the economy here, for the oil companies, or for my 
company. So, if we're going to build roads, let's rebuild the 
roads we have with sturdy roads.
    OK, the auxiliary roads. You can't just build, you know 
Highway 23, obviously, and ignore the rest. And I'm glad to 
hear that we're talking about Highway 8, 1804, 85 and 23, as 
well. All of those serve the oil industry, right now. And, not 
only to, but Soda's BIA 2, which is down here south of the 
Mitza, south of New Town, BIA 12 which goes through Mandaree, 
BIA 14 which is a south route down to McKinzee Bay and East 
Mandaree and then you have Highway 17, which is south of 
Highway 14. All of those roads are decimated--terrible. And we 
need more Federal money to fix those roads.
    I estimate--when you go across these roads, and you have 
potholes, and you have--I can't think of the word I'm looking 
for, here, but--roads in bad repair where you're shaking the 
heck out of your trucks, it costs you money. Any weld that you 
have on your truck or on your trailer to hold anything else 
that wasn't there when you got it, it's going to break sooner 
or later. And it costs you to replace that.
    Your air lines break and come undone. There's a variety of 
other things that poor roads cost me. And I estimate, I spend 
probably 2,000 a month fixing these little things. So, good 
roads would also save me money. So, that's another reason, you 
know, I'm trying to just be altruistic, but it does provide us 
a savings, as well, as well as being safe.
    So, I would really like--I'm glad to hear you mention these 
BIA roads, because the tribe really does need money for those--
for these roads, as well.
    Economic development along North Dakota 23--I've started 
another company where we are putting in water loadout 
facilities, three miles east of New Town.
    The Chairman. Let me just stop you there, if I can, because 
we are--we're supposed to be taking off----
    Mr. Kelly. OK.
    The Chairman. Or, I'm supposed to be taking off in 10 
minutes, which I don't think is going to happen, and I have 
another hearing in Devils Lake. I have read the rest of--just 
that final paragraph, and we know that issue is really separate 
from this hearing.
    Mr. Kelly. OK.
    The Chairman. So, I think we should reserve that--we're 
well aware of that issue, that's the Corps and the water 
permits issue.
    Mr. Kelly. Yeah.
    [The prepared statement of Mr. Kelly follows:]

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    The Chairman. Congressman Pomeroy and I and Senator Dorgan 
are very aware of that.
    Let me just say that it's very apparent to me from the 
hearing today that not only do we have major issues with 23, 
we've got major issues with 22, 8, 1804, we have significant 
challenges with the Loop Road, in terms of reservation, 12, 14 
and 17 on the reservation.
    We, of course, we know from an earlier hearing, serious 
challenges on 85. So, you put all of this together, this entire 
network is stressed, and it's going to require additional 
dollars and some of the things have to be done urgently. I 
think, 23 we've heard in the testimony, Steve your excellent 
testimony, Kenton, your excellent testimony--these are things 
that need to be done urgently, because we're talking about loss 
of life. And we're having people have accidents, losing their 
lives, that's happening right now. And so those are things that 
need to be address urgently. And we've certainly heard, I 
think, the case made as compellingly as it could be.
    Congressman Pomeroy?
    Mr. Pomeroy. Mr. Chairman, sensitive to your time, and you 
have the gavel, I think we have had, just superb testimony. 
This panel was absolutely excellent, also, in terms of really 
putting kind of a--how this works when the rubber hits the 
road, literally, on the operation of business and the daily 
life experience here, so I found this to be very informative, 
and I think we've built a strong record, this morning. Thank 
you.
    The Chairman. Thank you so much, and thank you for 
participating.
    One thing we should do, because I will be asked, you know, 
did I load the panel, or are the witnesses all in favor of 
doing something but the general population is not. Let me just 
ask, is there anybody here who opposes additional steps being 
taken to improve 23, 22, 8, 1804, the BIA roads, 85--is anybody 
in opposition to highway improvements on this road network?
    [No response.]
    The Chairman. Not a single hand is raised. Let me ask it 
the other way. How many here believe it is important that we 
have improvements to this road network? Let me just see a show 
of hands.
    [Show of hands.]
    The Chairman. All right. That's about as clear as it can 
be. Let the record show that the overwhelming majority of hands 
were raised. I think the only ones that weren't are people who 
aren't in a position to vote because they are the 
administrators of the program here in North Dakota. All right, 
thank you very much. I think this is an important hearing. 
Hearing will stand adjourned.
    [Whereupon, at 11 a.m., the hearing was adjourned.]

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 FIELD HEARING: DEVILS LAKE FLOODING DISASTER: HOW SHOULD THE FEDERAL 
                          GOVERNMENT RESPOND?

                              ----------                              


                         THURSDAY, JULY 8, 2010


                                       U.S. Senate,
                                    Committee on the Budget
                                          Devils Lake, North Dakota

    The committee met, pursuant to notice, at 1:30 p.m. in the 
Cafeteria of the Lake Region State College, Devils Lake, North 
Dakota, Hon. Kent Conrad, chairman of the committee, presiding.
    Present: Senator Conrad.

              OPENING STATEMENT OF SENATOR CONRAD

    The Chairman. The hearing will come to order. I want to 
welcome everyone today to the hearing of the Senate Budget 
Committee. This is an official hearing of the committee, so we 
will be operating under the rules of the U.S. Senate, and an 
official record of this hearing is being kept.
    The title of this hearing is, ``Devils Lake Flooding 
Disaster: How Should the Federal Government Respond?'' I want 
to begin by welcoming our distinguished witnesses today. I am 
pleased to welcome Governor Hoeven, he is on his way, I'm told, 
and we will recognize him when he arrives.
    We will have two panels of witnesses today. The Acting 
State Engineer of the Water Commission, Todd Sando; and the 
Director of North Dakota's Department of Transportation, 
Francis Ziegler; and our good Mayor, Devils Lake City Mayor, 
Dick Johnson.
    Our second panel will include Spirit Lake Chairwoman, Myra 
Pearson, and I see Myra is here, welcome, good to have you 
here; Minnewaukan's City Mayor Trish McQuoid, Trish--Trish is 
there, I see her. Yeah, it's a challenge. Ramsey County 
Commissioner Joe Belford, I know Joe is there, good, and Devils 
Lake Basin Joint Water Resource Board Manager, Jeff Frith. Jeff 
is here, as well. Good.
    Each of you is on the front lines of this flood fight, and 
it is a fight that has grown even more urgent. Here are some of 
the headlines from North Dakota papers describing the disaster, 
``Tens of Thousands of Acres of Productive Farmland Have Been 
Flooded, and Hundreds of Homes Have Been Moved,'' ``The 
Transportation Network, Including The Roads and Rail Lines has 
Been Disrupted and the Local Economy Continues to be 
Affected.''
    Here are NASA satellite photos showing the dramatic 
increase in the size of the lake between August 1984 and 
September of 2009. I might say that has had a--probably one of 
the greatest impacts on colleagues when they see this dramatic 
increase in the size of the lake. This lake, as I explained to 
my colleagues in Washington, is now four times the surface size 
of the District of Columbia, our Nation's capital.
    Since 1992, Devils Lake has risen nearly 30 feet. Last 
year, alone, the lake rose more than 3.5 feet. Recent heavy 
rains have pushed it to record elevation this year. Devils Lake 
is now within 6 feet of a level that would have an uncontrolled 
release out of the east end. Finding solutions to prevent an 
uncontrolled outflow is in everyone's best interest, upstream 
and downstream.

[GRAPHIC] [TIFF OMITTED] T8154.390


    Tomorrow, I will be holding a hearing in Valley City to get 
their input, and to share with them the serious consequences of 
an uncontrolled release of water from the east end. Experts 
tell us that the wet cycle in the basin will likely continue 
for years, there's no way to predict when a normal cycle of 
drier conditions will emerge, there is a 72 percent chance that 
the wet cycle will continue for 10 years or more. Let me repeat 
that--a 72 percent chance that this wet cycle will continue for 
10 years, or more. A 37 percent chance that it will continue 
for 30 years, and a 14 percent chance that it will continue for 
at least 60 years.
    Simulations show a substantial risk the lake will reach the 
spill elevation of 1458 feet--that is only six feet from where 
the lake is today. An uncontrolled outflow would cause 
significant damage downstream. The cities of Valley City and 
Lisbon would be devastated by flooding, and drinking water 
supplies would be wiped out if there was an uncontrolled 
outflow from the east end.
    When the flooding disaster began, we worked cooperatively 
on a three-pronged strategy--upper basin storage, protecting 
infrastructure, and the construction of an outlet. It is a 
strategy we pursued aggressively.
    We have successfully won over $700 million in Federal help 
that has been allocated, so far, to protect the region. To keep 
the road network intact, over $400 million has now been spent 
since 1995 to raise roads and address the roads acting as dams. 
FEMA has spent $84 million since 1993 in repairing damage to 
public infrastructure caused by the rising lake and relocating 
threatened structures, and buying out Church's Ferry. The Corps 
of Engineers has spent $200 million since 1993 on the levy, the 
evaluation of the Federal outlet, and other protective 
measures. HUD has provided more than $70 million, and more than 
$11 million since 1997 to mitigate damages.
    Here are some of the specific steps that have been taken by 
the Federal Government to be of assistance. The levy protecting 
Devils Lake has been raised three times. Without those raises, 
Devils Lake would, today, be underwater. More than 500 homes 
have been relocated through the National Flood Insurance 
Program. We secured a policy waiver, to allow roads to be 
raised before they're inundated, and $70 million was provided 
to address roads acting as dams.
    A 300-cubic-feet per second Pelican Lake Federal outlet was 
approved, and initial funding secured. And the decision was 
made by State and local governments that they did not feel they 
could afford their cost-share, which would have been $72 
million for that project. $9.2 million was provided for a new 
water supply for the city of Devils Lake and more than $4 
million was provided to relocate Church's Ferry and the BTR 
Farmer's Cooperative Elevator. This Federal help has been 
important in mitigating the impact of flooding. But neither the 
Federal Government nor anybody else can control Mother Nature.
    Flooding has stayed, and grown, imposing more hardships. 
And I fully understand the frustration, the anger, and the 
anxiety with this ever-growing crisis and clearly, more needs 
to be done.
    The Federal Government has, and will continue to be a 
critical partner with us in responding to this crisis, but it's 
clear, we're in uncharted territory.
    So, what are the options, going forward? What additional 
steps can be taken? Should we continue to raise roads and the 
levy, relocate threatened structures, provide other 
infrastructure protection? For Minnewaukan, should permanent 
protection be built, or should residents and businesses be 
relocated? Should we focus on maximizing operation of the State 
outlet? Should we construct an east-end outlet and/or a control 
structure via the Jerusalem or the Tolna coulee? And, if so, 
how do we protect downstream residents?
    Should the Federal Government reexamine options for upper 
basin storage, and finally, should discharges out of the west 
end of the lake be enhanced, and if so, what are the best 
options to accomplish that?
    So, those are options that are on the table, there are 
others, as well. We have asked the Corps of Engineers to 
examine the option of moving water west to the oil fields to 
provide water supply for fracking the oil fields and the 
development of the Bakken Formation, and so that option is also 
being examined.
    There are many options that must be considered, but there 
is no quick or easy solution, that's the hard reality here; 
nothing is going to happen overnight. It will take time and it 
will take a coordinated effort and it will require close 
consultation and cooperation with downstream interests, because 
we know that even if we make a decision, if we get everybody to 
agree--the Federal Government, the State government, the local 
governments, they all agree--people still have the ability to 
go to court, and we have experienced what that can mean. So, we 
have to work hard, we have to work smart, and we have to work 
fast.
    Since the May Flood Summit, the working group has been 
convened with the Corps of Engineers put in the lead. The 
working group has representation from all of the 
representative--or, all of the relevant Federal agencies 
including the Army Corps of Engineers, FEMA, the Department of 
Transportation, USDA, the Bureau of Indian Affairs, the 
Environmental Protection Agency, the U.S. Geological Survey. 
The group's final and full recommendations are expected by 
September 9th. I am particularly interested in hearing from our 
witnesses on where they think the working group should focus 
its attention and intend to share your input here today with 
the working group next week.
    I'm delighted that Colonel Price, the new head of the Corps 
of Engineers District Office in St. Paul is with us today, as 
is Judy Deharney, who--I always pronounce her name incorrectly. 
Deharney? I'm doing better. I always want to say Desharney. I 
don't speak foreign languages very well. My French isn't what 
it should be. But, we're delighted that you're here 
representing the working group, to listen and report back to 
them, as well.
    I'm also told that next Tuesday, Wednesday, and Thursday, 
representatives of the working group will be here in town to 
meet with local leaders, county Commissioners, mayors, 
auditors, local emergency managers. This is one of several 
trips to the area that are planned by representatives of the 
working group, leading up to their final report in early 
September. The focus of this particular trip, as I understand 
it, will be on individual assistance, infrastructure, water 
level management, the levy, and Minnewaukan. There are other 
teams that are coming after this one to look at different 
aspects of the challenges that we confront.
    Again, we are delighted that Colonel Price, the new 
commander at St. Paul, is here. Colonel, maybe you could stand, 
we'd all get to know you. We've gotten to know Colonel 
Christianson very well over the years, I'm sure we'll get to 
know you, as well.
    I understand Representative Ben Vigg is here, if you'll put 
up your hand, Ben, in back. If there are other legislators 
here, if you'd just stand and identify yourself, we want to 
recognize any State legislators that are here.
    Ms. Heckerman. I'm Senator Joan Heckerman from District 23, 
we have the south side of the lake.
    The Chairman. Yes, good to see you, Joan. Didn't see you 
there. Thank you very much.
    Mr. Haset. Kurt Haset from District 15, right here in 
Devils Lake.
    The Chairman. Thank you, sir. Thank you for being here.
    Mr. Alkee. Ed Alkee, Senator, District 13.
    The Chairman. Thank you, sir, good to have you here.
    Any other State legislators?
    [No response.]
    The Chairman. All right.
    Let's go now to the Governor. Before we do that, if I 
could, if we could just observe a moment of silence. As many of 
you know, we lost one of our best, Keenan Cooper, from 
Wahpeton, North Dakota, serving in the United States Army, was 
killed Monday in Afghanistan. We'd like to just observe a 
moment of silence in his memory, and in respect for what he 
did.
    [Moment of silence observed.]
    The Chairman. Thank you.
    We are delighted Governor Hoeven is here. Thank you so much 
for, once again, coming to the Devils Lake region to discuss 
these challenging issues. I appreciate very much your taking 
the time to be with us today.
    So, Governor Hoeven, why don't you make your initial 
statement, then we'll go to our panels, and hopefully you can 
stay with us during the whole hearing and have a chance to 
comment in conclusion, as well.

 STATEMENT OF HON. JOHN HOEVEN, GOVERNOR, STATE OF NORTH DAKOTA

    Governor Hoeven. Thank you, Senator. Good to be with you, I 
appreciate you being here, and also very much appreciate the 
moment of silence for one of our soldiers.
    Whether it's our National Guard, of course, we have Camp 
Grafton up here, or any branch of the service, our men and 
women in uniform are doing an amazing job. And we extend our 
condolences to the Cooper family and we thank Keenan Cooper for 
his service.
    It's, again, good to have you up here. I'm dressed this way 
because we were out looking at the west side outlet, which is 
now running at 250 cubic feet per second. And some of you may 
want to get a look at that--that is a significant amount of 
water. And if you go about 7 miles west of Oberon and 1 mile 
south, there, that's where the water actually comes from, the 
outlet into the Cheyenne. So, it's about 7 miles west of 
Oberon, 1 mile south.
    Carl Dukeshire is the individual with the Water Commission 
who is overseeing the outlet operations, and if you call him, 
that's probably the best way, if you want to take a look at it. 
But, it has been running at 250 cubic feet a second, now, since 
about a week ago Monday.
    You know, in terms of just, kind of, some opening comments, 
Senator, you know, this needs to be a Federal, State and local 
partnership to address the challenges, here, in the Lake 
Region. So, I appreciate the opportunity to be here, because it 
is truly going to take all of us working together--Federal, 
State and local partnership--to address this challenge.
    And we need to get people working together, too. And by 
that, I mean, both in the upper basin and downstream. So, this 
communication effort is very, very important, because we need 
to get people working together as we work on this challenge. 
And that's an ongoing communication challenge, and opportunity.
    Senator Conrad referred to it, but the approach is a three-
part approach. Storing water in the upper basin, mitigation--
which means building up roads and dikes in the region, and 
moving water out of the lake.
    First, in terms of water being stored in the upper basin. 
Devils Lake has increased in size from 1993 to the present from 
about 49,000-acre feet, to I believe more than 180,000-acre 
feet. That's well over 100,000-acre feet of storage. That lake, 
getting that much bigger, flooding land, is storing water. 
Right there in the lake, in the basin, we're storing a huge 
amount of water in the upper basin.
    In addition, travel the area around the lake, to the north, 
to the west--all around the lake. There are a tremendous number 
of potholes, slooves, wetlands--there's a tremendous amount of 
water stored in all of those wetlands.
    Now, some of the experts can quantify that for us, but the 
point I'm making is, there are hundreds of thousands of acre 
feet of water being stored in the basin. We are storing a 
tremendous amount of water in the upper basin, OK?
    Second, mitigation--building up roads and dikes. You, 
maybe, touched on some of those figures, Senator, but in terms 
of building up roads, and building up dikes, I mean, right now 
we are working on Highway 19, we are working on Highway 20, we 
are working in Highway 57 and we are even working on Highway 2. 
So, pretty much all of the highways in the region, we are 
building up. We are putting rip-rap along them, we are 
expanding them out with dirt to try to offset the wave action, 
both to reduce erosion, but also so that when cars drive on 
them, you feel safe. And, we've got all of the county roads, 
the township roads and everything else, right?
    So, there's a tremendous effort on roads, and there's a big 
effort on dikes--you see all of the dirt work going up. So 
there's, I think, $650 million, plus. And somebody else can 
update that number if it's not quite right, but I'm--there's 
$650 million plus, between Federal, State and local putting 
dollars into mitigation. It's a monumental effort, and it's 
ongoing, right now. So, that's the second part of the strategy.
    The third part of the strategy is moving water out of the 
lake. And that's what I said, we were just up looking at that 
outlet. We are now moving 250 cubic feet a second out of the 
lake. That can move 6 to 8 inches off the lake, if we get the 
same amount in evaporation, now you're getting somewhere 
between a foot and a foot and a half that we can take off the 
lake.
    But, to do that, and to take more water out, we need 
cooperation from the Corps, and from the EPA, right? So, both 
to continue to remove water from the west side, and increase 
it, which we can do, and to build a control structure and an 
outlet on the east side, we need cooperation from the Corps, 
and from EPA, and we need to continue to communicate with 
everybody both here in the upper basin, and downstream, that 
this is a controlled, managed way to address the problem.
    But, we're getting closer to the point where we can 
stabilize and hopefully even reduce the size of the lake, but 
it's going to take some more work, here. It's going to take all 
of us working together, it's going to take the help and the 
cooperation of, like I say, the Corps and the EPA. And, as far 
as the sulfates, you know, for example, the case of Valley 
City, and I know you're going to be down there tomorrow, 
Senator, we have already--through the State Water Commission--
provided funding to help them build a new treatment plant which 
will have reverse osmosis to treat their water. So, actually, 
their water quality for the community--not only are we 
increasing their capacity, but it will improve the water 
quality, because it will have full RO--reverse osmosis--
treatment.
    So, again, I'm just trying to bring that from a high level. 
We've got to do all three of these, we've got to move more 
water out of the lake, OK? That's what we're working to do. And 
like I say, when you take a look at it you realize, I mean, 
this is--it's a huge lake. But when you go down to southwest of 
Oberon, there, you'll see--we're moving a lot of water, now. 
So, we're getting closer. Now, we need to keep working, 
together, to get the job done.
    So, again, I thank you, Senator, for the opportunity to be 
here. And I know that you're--this is a hearing and so you'll 
be working with the witnesses, and I won't do any questioning 
or anything during the hearing, but it's good to be here with 
you, working with you, and to listen and maybe have some more 
comments at the end.
    Thank you.
    The Chairman. I appreciate it very much, Governor Hoeven, 
that you're here.
    We'll start with the Acting State Engineer of the State 
Water Commission, Todd Sando.
    Welcome, Todd. I'm delighted that you're here. Please 
proceed with your testimony. Let me, before we begin, perhaps 
explain a bit more why a Budget Committee hearing. Anything 
that the working group comes back with in terms of 
recommendations will require Federal expenditure. And that 
means that we're going to have to be able to convince 
colleagues to make those expenditures. And, typically, when 
large Federal expenditures are contemplated, hearings are held 
to lay down a record, to make a case, to justify those levels 
of expenditure. That's what we're here doing today. To lay down 
a formal record to justify the additional Federal expenditures 
that will be required to deal with the ongoing crisis in the 
Devils Lake basin. That's the purpose of this hearing, today.
    Mr. Sando?
    Governor Hoeven. Senator, could I add one more comment 
before you get rolling, here?
    The Chairman. Yes.
    Governor Hoeven. Mayor McQuoid's here, and I also want to 
mention Minnewaukan, because they're right there on the edge of 
the lake, and also super Byron Jerry is here, too. We have our 
Water Commission, so I want to mention Minnewaukan, as well, as 
part of this effort, we were up there, recently. But, we have 
our Water Commission people, and that's led by both Mike Hall 
and Enray Morel with Emergency Management, working with the 
FEMA Section 22 Program and the community to figure out what 
our options are. And also, we have now applied for funding 
assistance for the school, up to about $6 million, and we're 
working with the superintendent on that.
    So, I just wanted to--that's part of the overall effort, I 
should have mentioned that.
    The Chairman. No, I'm glad that you did, because again, 
it's very, very important that we lay out, as clearly as we 
can, the financial needs that are connected to what is being 
done, and what needs to be done.
    Mr. Sando.

  STATEMENT OF TODD SANDO, ACTING STATE ENGINEER, STATE WATER 
                           COMMISSION

    Mr. Sando. Thank you, Senator. I do have six pages of 
testimony and I do have 25 copies, here, so I can submit that.
    The Chairman. All right. Very good. We appreciate that.
    Mr. Sando. Six pages is going to take a little while to go 
through, I don't know if you just want it summarized, or if----
    The Chairman. Yeah, if you could summarize, that would be 
helpful.
    Mr. Sando. OK.
    The Chairman. And then we'll get into more of it as we go 
into the questioning.
    Mr. Sando. OK.
    I won't, you know, we've had a flood going on here for 17 
years and $650 million have been spent, you know, protecting 
infrastructure, so I won't go into all of the impacts that have 
taken place the last 17 years.
    As you know, Devils Lake is a 3800-square mile watershed, 
and one of the big things is, what's happening at Devils Lake, 
we've entered into this wet cycle, and the amount of inflow, 
and the amount of precipitation has dramatically changed coming 
into Devils Lake.
    And in the testimony, one of the points that I wanted to 
make and it's was, this wet cycle has changed the average 
inflow dramatically. From, previously, the inflow into Devils 
Lake from like the time period of 1950 to 1992, that 42-year 
period, the average inflow was 33,800-acre feet. So, 33,800. 
Now, in 1993, that's when we got this big flood event that hit 
mostly the eastern half of the Devils Lake basin, we had 7 
inches of rain and probably 35- 40 inches of rain fell the 
whole summer of 1993, so that's when the wet cycle really 
started. And since 1993 through this last year, the average 
inflow has changed from this 33,800--so, for this, the past 16 
years, now--it averages 243,700-acre feet. So, the inflow 
coming into the lake is 7 times greater than it had been for, 
you know, four decades. So, that's that real dilemma, we're in 
a very wet period, and that's what the scientists and the 
scientific have been saying.
    And one of the points I have, wanted to make in the 
testimony, too, is related to this wet cycle, and how long it 
could last. Some experts say this wet cycle--National Weather 
Service, we did have a water topics legislative hearing up here 
a few weeks ago and we had National Weather Service here and 
the USGS. And they were talking about, they could see this wet 
cycle easily continuing for another 10 years, before it gets to 
the peak, and then it would still be wet and on the way down.
    So, we're on a real critical time period right now, and 
they think this wet cycle--the news they brought to that 
committee meeting was pretty dire, I mean, it wasn't a very 
rosy picture they were painting, and they think we're going to 
see lots of big events and lots of runoff for the coming years. 
So, that's a major fear to have.
    Some of the issues, you know, the lake has come up so much 
since 1993, it was at 1442, and now it's at 1452, so it's 30 
feet higher from 1993, the spring of 1993 to now. So, we're--
the real issue is we're within 6 feet over overflow. The lake 
reached 1452 when we go this 3 to 4-inch rainfall a couple of 
weeks ago, and the natural outlet elevation is 1458, so we only 
have 6 feet to go. And that's 6 feet that's remaining, but the 
amount of storage in that 6 feet is 1.3 million-acre feet of 
water.
    To put that into perspective, last year alone the inflow to 
Devils Lake was 590,000-acre feet. So, if we had a 2009 event, 
back to back, there would be enough inflow in those two events 
to get us to the overflow elevation. So, there's a high risk 
that this lake--if we continue and have some of these big 
events--2009 is the biggest event, so 2009, at 590,000-acre 
feet, that's the No. 1 inflow event in recorded time. But if we 
would have back-to-back, we would be there.
    Another thing to point out, when we only have 1.3 million 
acre feet of storage remaining, I know the city of Devils Lake 
and the Corps has been working on the levy raise, and they say 
about half of PMP or PMF event would produce a runoff event of 
1.4 million acre feet. So, right now, the basin can not even 
handle the half problem, maximum precipitation. So, I wanted to 
point that out, and it's well laid out in the testimony, too, 
so I wanted to make that point clear.
    USGS has done a lot of technical modeling for the Water 
Commission and for the Corps and for everyone. They've been, 
really, our technical expert on doing still castic modeling and 
seeing where the lake could go based on the past history.
    And Skip Veccia's model points out there's a 13 percent 
chance that the lake could spill in the next 20 years. That is 
a very high risk. Thirteen percent's very high. And we can't--
we've really got to do something about it.
    And one of the things we're doing is this outlet that we 
built. It's 250 CFS and they did model, to see what the benefit 
would be with this outlet. An outlet of 250 CFS, we could get 
500-acre feet a day. If we could pump for 7 months out of the 
year, nonstop, we could get 100,000-acre feet out. So, if we 
could 100,000-acre feet a year out of the lake, over the long 
haul, actually, the computer models and the still castic model 
shows the risk being reduced by half for an overflow. We cannot 
eliminate the risk; the risk goes down to 7 percent in the next 
20 years. But it does reduce it in half. So the outlet does 
make--you know, reduces the risk a lot, but we still have the 
risk that it still could overwhelm us and still fill up and 
overflow.
    The Chairman. Did they do an analysis how much--what the 
discharge level would have to be to eliminate the risk?
    Mr. Sando. We've--there has been some numbers, I just 
don't--off the top of my head I don't--it would--it would have 
to--it would take an awfully----
    The Chairman. I just--if it cuts it in half to be at 250 
CFS for 7 months, I'm wondering if you go to 500 CFS, if that 
would eliminate it?
    Mr. Sando. Yeah, 500 wouldn't eliminate it, I think it's 
more I--this is not a factual number, but I would say more 
like, on the lines of 1,000 CFS, maybe we could get it down 
there.
    Skip Veccia and Bruce Englehart from my staff have been 
working on some numbers and trying to see how they could get it 
down to 1 percent. I don't know, Mike Graftsguard, he might 
even know that, too, I'm not even sure.
    Do you know that there's a way they could get it down to--
because you--the city of Devils Lake was asking that question. 
If we could ask Mike, Mike might know that answer.
    Mr. Graftsguard. Senator, I don't have the number off the 
top of my head.
    The Chairman. This is--for the purpose of the hearing 
record, Mike Graftsguard, the City Engineer.
    Mr. Graftsguard. I don't have the number. Skip did do some 
modeling for that percentage. But to eliminate the risk would 
require very excessive discharges from the lake. But to 
minimize that risk, what we were kind of looking at is going to 
be that 1 percent chance, and it was still, you know, a large 
amount of discharge if there's extremely wet cycles.
    The Chairman. If you could get to us the calculations that 
have been made for the purposes of the hearing record, that 
would be helpful.
    Mr. Graftsguard. I will do that, Senator.
    The Chairman. All right. Thank you, Mike.
    Back to Mr. Sando.
    Mr. Sando. OK. That kind of sets the stage about the wet 
cycle and the risks and those types of things.
    Next point, we'll talk about the State outlet, and some of 
the things that, you know, we could do to try--try and make 
some improvements.
    Some of the issues with the west end outlet--our biggest 
problem the last 5 years is water quality constraints of the 
Cheyenne River. And the water quality constraint was a sulfate 
standard of 450 mg/liter. And so, until last year, we were 
trying to operate within that 450 mg/liter. The problem with 
the Upper Cheyenne River, a lot of times the sulfate levels 
even exceed 450, in fact, there's even measurements of 1600 mg/
liter in the Cheyenne River.
    So, like, once we got the outlet up and operating, back a 
few years ago, for example, summer of 2006 came, and it was a 
hot summer, June was over 100 degrees several days in a row, 
the Upper Cheyenne River really got low, and basically dried up 
and the sulfate levels got extremely high, and in 2006, we 
couldn't run the outlet at all, because there wasn't water in 
the Cheyenne River to dilute Devils Lake water with. And we had 
these strict standards that, we couldn't put water in there 
because of that 450 standard. And, so we went along with these 
issues with the 450 standard, and we couldn't degredate the 
water quality by more than 15 percent so, the first, you know, 
several years of operation we didn't get much water out of the 
lake until last year, things really changed. We asked for an 
emergency rule change for the Upper Cheyenne River and that 
would change the water quality constraints on the Upper 
Cheyenne, and what ended up taking place, just summarizing, 
there was an emergency rule put in place that we could go--
raise the standard from a 450 mg/liter to 750 mg/liter, and 
that would be from Bald Hill all the way through the Upper 
Cheyenne, past our point where we put the Devils Lake water in.
    So, at that point, once we got that 740, the water quality 
in Devils Lake at Round Lake has been, last year averaged 
between 550 and 600 mg/liter. So, based on that, 550 to 600, we 
got the standard up to 750, we weren't constrained at all at 
the insertion point, so we were able to run wide open. So, at 
this point, we were able to start the outlet and run it more, 
so we were able to run at our full capacity last year of 100 
CFS. So, we were running at 100 where the previous years we 
were averaging, sometimes, single digits, sometimes 10, 
sometime 20 CFS--rarely 100. Until we got that standard 
changed, and got that emergency rule in place, we didn't move 
much water.
    So, July of last year, we started moving a lot of water, 
and we were able to move 100 CFS every single day, and that's 
200-acre feet a day and that's really started making a 
difference.
    At that same point we got that emergency rule, we began the 
process of designing and upsizing the outlet from 100 CFS 
outlet, to 250 CFS outlet. So, we put the plans in place last 
summer and last fall and we actually constructed an upsizing to 
the outlet. We actually hired contractors, industrial builders 
and several other contractors and they worked all winter long, 
all spring long, and we got everything completed a week and a 
half ago. And that when we got the outlet up to 250 CFS. And 
that upsizing cost us another, like $14 million. The original 
outlet was, like, $26 million, so we have $40 million into the 
outlet.
    And now that we're running at 250 CFS, now we're getting 
500-acre feet a day out. And if you get down to--go over by 
Oberon and go to the terminal structure and see what 250 looks 
like, it's a lot of water. So, we are moving water, now.
    The Chairman. How would you describe it? What do you see 
there?
    Mr. Sando. It looked like a river going out. It looked like 
a river going--it was like--it was a bigger river going into 
the Cheyenne River, because we have it go--flowing into an 
oxbow of the Cheyenne River, so there's 250 there, and the 
actual Cheyenne River is probably around 100 CFS, so it's even 
bigger.
    The Chairman. So it's 2.5 times the Cheyenne.
    Mr. Sando. Two and a half times the Cheyenne River size at 
that point. So, it looks like--it looks like we're really 
moving water, now.
    The Chairman. Yeah. OK.
    Mr. Sando. So, but now the issue, we still--we got this 
emergency rule from down to Bald Hill Dam, and the problem now 
is, the standard didn't change from one mile downstream of Bald 
Hill Dam for the entire lower Cheyenne River because of 
beneficial use for municipal water supply needs, so the----
    The Chairman. And that our issue of----
    Mr. Sando. That's----
    The Chairman [continuing]. The ability of the Valley City 
structure to be able to treat the water.
    Mr. Sando. Right, so----
    The Chairman. We're going to have the new plant onstream 
next year?
    Mr. Sando. I'm not sure of when it's going to be complete.
    The Chairman. Because that will use reverse osmosis, that 
will be able to handle increased sulfate levels in the Cheyenne 
and we will--hopefully that will strengthen our case.
    Mr. Sando. Right. It's going to be membrane treatment 
process that will remove the sulfates. They'll actually have 
even better water quality than they have been producing.
    The Chairman. Than they have right now.
    Mr. Sando. Than they have right now, that's correct. So, it 
would be--so they're going to be upgrading their treatment 
plant.
    So, continuing on, this issue of downstream--as the water--
the travel time, say, you know, we started this outlet here in 
July, back up, we had problems this year because of flooding 
downstream, we weren't about to operate, plus we're in the 
middle of upsizing the outlet that we didn't start running 
until July. So we, the month of June we--well, we started 
running in June, excuse me, so we ran at 100 CFS for the month 
of June, and now we're up to this 250.
    Travel time fro this Devils Lake water to work down the 
Upper Cheyenne to get to the head waters of Ashtabula is like 2 
weeks, like 15 days. So, that water will be entering in to Lake 
Ashtabula at that point.
    The Chairman. The water that you're releasing today will 
take 2 weeks to get there?
    Mr. Sando. Yes, that's correct. So, we've been doing some 
extensive modeling with the USGS of trying to model, and we've 
collected a lot of data last year once we were able to start 
running at 100, and we monitored it as it moved down the 
Cheyenne River, and as it moved through Ashtabula, at several 
different road crossings, through Ashtabula. And some of the 
modeling results we're seeing, it takes 45 to 60 days for the 
water to move through Ashtabula. It just doesn't move--I mean 
it, so, it takes even longer, once it gets to the lake, the 
lake's really, you know, it's flat, it's not current, you know, 
it's--so it moves through that at a slower rate. So, we say it 
takes another 60 days for that water to buildup in Lake 
Ashtabula, and before it starts coming out Lake Ashtabula.
    The Chairman. How much additional capacity do we have in 
Lake Ashtabula? That is, in fact we were able to get even an 
enhanced discharge, either out of the west end, or the east 
end, or a combination of west and east end, because that's also 
being examined. Having water--an enhanced outlet out of the 
west end as well as water out of the east end, is in--I know 
one of the things they're looking at is Lake Ashtabula's 
ability and capacity. What percentage of Lake Ashtabula's 
capacity is realize at this moment, do you know?
    Mr. Sando. Currently, Lake Ashtabula has a lot of store--I 
mean, they have spillway gates to that they can release the 
water, so what comes in can go out, too. So, you know, they 
operate within the conservation pool levels, that type of 
thing, so--and they do have flood storage, so they--you know, 
the reservoir bounces up and down during spring runoffs and 
that type of stuff, so there's plenty of capacity in Lake 
Ashtabula to deal with water coming from Devils Lake, is what 
I'm trying to say.
    The Chairman. OK.
    Mr. Sando. OK, so trying to paint this picture, as this 
water enters into Lake Ashtabula, how we're going to operate 
the outlet as Lake Ashtabula's sulfate levels rise, what 
happens, when the Devils Lake water starts getting in there and 
say the water quality in Lake Ashtabula is like--sulfates like 
200 and starts building over the next month and the next month 
and the next. As it starts moving up toward that standard of 
450, we're going to have to throttle back and not release 250 
CFS. And our model results show that this will happen most 
years, that we will not be able to run nonstop at 250 CFS, 
we'll run into this water quality constraint.
    And we feel we can only run Lake Ashtabula up to about 400 
mg/liter sulfate, not all the way to the 450, because what 
happens--once we get this big, you know, 70,000-acre feet of 
water in Lake Ashtabula at this level, it's going to be there 
for months on end, through the wintertime to meter out.
    So, what happens, when winter comes, we have ice forming on 
Lake Ashtabula, and what happens, it freezes all of the fresh 
water, so it concentrates--the dissolved solids are still 
there, so it concentrates it even more, so the water that was 
400 mg/liter before the ice came now could be up to 450 mg/
liter.
    So, that's why this constraint--we're getting constrained 
by 450 standards, so----
    The Chairman. What would the 450 standard need to be in 
order to prevent us from having to throttle back on the amount 
of the discharge from the Devils Lake outlet that's been 
constructed?
    Mr. Sando. That's a good question. Basically, I would need 
to be a number higher than what's coming out of Brown Lake and 
Devils Lake. And that number, last year we averaged between 550 
and 600 mg/liter. So, if we could have--have a standard of 600 
mg/liter, instead of the 450, then we wouldn't be turning the 
outlet off and we would be able to keep moving water, 24 hours 
a day, nonstop.
    The Chairman. In Valley City, as I understand it, when 
their new plant comes on, they'd be able to handle a level of 
600, on sulfates.
    Mr. Sando. Oh yeah. They could handle much higher than 
that, even.
    The Chairman. Much higher.
    Mr. Sando. Yes.
    The Chairman. Lisbon's not an issue because they don't use 
water treatment. They use wells, is that correct?
    Mr. Sando. That's correct.
    The Chairman. So, Lisbon, not an issue. So, what, then, 
becomes the issue? What are we going to face in terms of an 
argument against going to a level of 600 on sulfates?
    Mr. Sando. OK, as we go down, then there's West Fargo, 
Fargo. Fargo, sometimes, in the Red River, when their numbers--
sulfate levels in the Red River get high, they switch over to 
the supplemental water supply, and they take water off the 
Cheyenne River, so----
    The Chairman. But that's their secondary source?
    Mr. Sando. That's their secondary, it's not their primary 
source.
    The Chairman. It's not like----
    Mr. Sando. It's not like Valley City, right. Where Valley 
City's primary source is Cheyenne River water. Fargo's is not 
the Cheyenne, they just use it.
    The Chairman. And how about West Fargo?
    Mr. Sando. West Fargo, I'm not--off the top of my head, I'm 
not----
    The Chairman. OK. They tell me West Fargo utilizes 
aquifers.
    Mr. Sando. OK, yeah, it's ground water, so that's not----
    The Chairman. They shouldn't be a problem.
    Mr. Sando. Right.
    The Chairman. OK?
    Mr. Sando. So, now, say if we can get through there and 
get--have 600-standard and deal with the, you know, from 
municipal water supply and domestic use, the next issue is once 
it enters the Red River.
    The Chairman. Right.
    Mr. Sando. And the standard in the Red River is even more 
strict. It's 250 mg/liter. And a lot of times, the baseline 
condition of the Red is even actually higher than that. So, now 
we've got other jurisdictions that we need to deal with, we 
need to deal with Minnesota EPA, a different region of EPA, 
because our region--the EPA is different from Minnesota. So, 
we'd have to work that angle, too, to get some relief on the 
standards on the Red River, too.
    The Chairman. Isn't it in their interest to work with us? 
Because if there's an uncontrolled release of water, if it 
comes out of the east end, then you're talking 2500, 2600 
sulfate level?
    Mr. Sando. You're--yeah, you're exactly right on the money, 
there. That's if, we continue on, down this path, we could have 
a release of very high-sulfate water. So, I think, it's to the 
point now, it makes more sense to start putting out water that 
is at higher levels then we would need to try to get a variance 
and, you know, loosen these standards because it could be 
really nasty if it comes un--comes from the east end.
    The Chairman. Do you know what the level would need to be--
we've talked about for between here and Valley City and Lisbon, 
we've got to get 600. Red River is 250. What would that have to 
go to, to permit us to have greater releases continuing from 
Devils Lake?
    Mr. Sando. That gets a lot more complicated because we have 
a lot of tributary inflow, a lot of water coming from 
Minnesota, a lot of water coming from south of Fargo into 
there, so you wouldn't have to go even close to that 600 number 
on the Red River, because there is a lot more water from 
dilution purposes that it's fresher, so----
    Just off the top of my----
    The Chairman. Just notionally, would 350--?
    Mr. Sando. I think that would help a lot, yeah.
    The Chairman. That's one thing we really need to know. We 
need to get that number.
    Mr. Sando. Yeah, we can, yeah--work with the Health 
Department and try to get some better numbers on that, but----
    The Chairman. OK.
    Mr. Sando. Yeah, you know, we've just been working our way 
down the Cheyenne, and you know, we've had--our bigger 
roadblock's Lake Ashtabula, right now, than the Red River. If 
we can't get through Lake Ashtabula----
    The Chairman. Right.
    Mr. Sando [continuing]. It's----
    The Chairman. No, I understand.
    Mr. Sando. No use in concentrating on that.
    The Chairman. Yeah. I understand. Well, that makes perfect 
sense.
    Mr. Sando. OK. So, you know, the big thing is to try to 
reduce the water quality standards. The other I feel that we 
could really use some help on is permitting issues, NEPA 
compliance, whatever we end up doing. Say if we want to--say if 
we think we need to get another 100 CFS out, if it's either out 
the east end. Each Devils Lake through Black Slew or some other 
location, or if it's additional water out the west end, we're 
going to need help with NEPA compliance and 404 jurisdiction 
and those type of things and permit issues.
    When we built the State outlets we did not acquire any of 
those types of permits. We avoided all wetland issues. It would 
be a lot better if we can, you know, get the permits and that 
would really make the engineering solution a lot easier. So, if 
we could get help from the Federal Government to expedite the 
process to get permits, if we want to try--upsize the west end, 
or it's like, ``Hey, we want to turn it into wintertime 
releases or to take some off the east end, we could use more 
help with the Federal Government on permit issues.
    I have a bunch of stuff, too, on Boundary Waters Treaty and 
dealing with Canada and that, and maybe I just won't summarize 
it, since I'm taking up a lot of time right now.
    The Chairman. Yeah. Let's do this, Todd, because that part 
of it is really kind of the next stage of what we have to deal 
with. You know, frankly, one of our biggest challenges has been 
the Canadians. When we got approval for a Federal outlet, back 
in 2005, the biggest problem we had was with the Canadians, and 
frankly, Minnesota.
    Mr. Sando. Yeah.
    The Chairman. Those were the two toughest hurdles we had. 
And so we know we're going to have to deal with that, as well.
    Mr. Sando. OK.
    The Chairman. Anything you want to add on that?
    Mr. Sando. I will just leave it at that, but yeah, that is 
a--that's some--that's another major hurdle, real tough, is 
State Department issues and dealing with.
    The Chairman. You know, we had to meet with Condoleezza 
Rice at the time, who was Secretary of State because she was 
going to a meeting in Canada, and Canada was in very strong 
opposition to doing anything. That was very, very challenging.
    All right?
    Mr. Sando. OK. So, then just to summarize, you know, relax 
the standards. One of the things we'd really like to see is, 
once this Federal task force completes its work that the 
Federal Government needs to quickly fund implementation of 
those recommendations. So, if we can get additional Federal 
funding, you know, the State outlet was all State dollars and 
if we could get some funding to help us with the east end 
outlet or controlled structure combination type thing, over in 
that end, if we could get some help, too, if we need to try to 
move some more water off the west end.
    The Chairman. That's really why we're doing this hearing 
today.
    Mr. Sando. OK.
    The Chairman. So that we're ready, we've laid the record, 
we've made the case if the decision is made.
    Mr. Sando. OK.
    The Chairman. OK?
    Mr. Sando. Thank you.
    [The prepared statement of Mr. Sando follows:]

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    The Chairman. Francis Ziegler, our excellent Director of 
North Dakota Department of Transportation. Welcome. Good to be 
with you this morning in a new town, and good to be with you 
here today.

  STATEMENT OF FRANCIS ZIEGLER, P.E., DIRECTOR, NORTH DAKOTA 
                  DEPARTMENT OF TRANSPORTATION

    Mr. Ziegler. Thank you. Thank you, Mr. Chairman.
    I'm Francis Ziegler, Director of North Dakota Department of 
Transportation and I want to thank you for the opportunity to 
appear before the committee today and thanks for your interest 
in improving transportation in the Devils Lake area and in the 
State of North Dakota as a whole.
    Today, I'm going to include in my testimony not only 
discussion of the Devils Lake issues, but some broader Federal 
transportation issues.
    Continued Federal support through programs such as the 
Emergency Relief Program is extremely, extremely important, if 
we're to meet the challenges dealing with the rising water in 
the Devils Lake Basin.
    Since 1993, the lake elevation has risen 29 feet. The 
current lake elevation is at 1452. The table that's before you 
in your testimony indicates how much we have spent, just over 
$191.1 million--now this is just on transportation. And $161 
million of that if Federal funding, $28.7 is State and local. 
This includes $149.4 million for State highways, $25.9 for 
county roads, and $14.4 million for BIA roads.
    Maintaining traffic flow is a major challenge when these 
projects are under construction. Currently, 18 projects are 
planned for 2010 and 2012 on State highway as the Governor--as 
Governor Hoeven mentioned that we're working on just about 
every road in this area. In fact, on every road that surrounds 
this area. And Table I shows the total cost of these projects 
is estimated to be $168.4 million. Which, $143.8 is Federal, 
and $24.6 State. Upon completion of these projects, the 
roadways will be at elevation 1460.
    Another element on the top of page 2 of the road--of what 
we're doing is roads acting as dams. We're doing a grade raise 
on Spring Lake on Highway 20, we're installing dam components 
on Highway 20, Acorn Ridge next to Camp Grafton and we've done 
culvert installations on Highway 20 in addition to the Highway 
19, 281, 2 and then all of those efforts that we're making on 
those.
    I'd like to talk about some future concerns that we have in 
the transportation world, here. If the lake reaches a natural 
spill elevation of 1458, the DOT anticipates raising all 
essential State highways to an elevation of 1465. This would 
require an additional $250 to $300 million in investment and 
take 2 years to complete the work. By law, the Federal Highway 
Administration can provided $100 million in ER funding for 
repairs in a State for each natural disaster or catastrophic 
failure that's eligible for Federal funding under the ER 
Program, it's commonly known as $100 million State cap. If the 
roadways need to be raised to 1465, we may very well need 
Congress to pass special legislation, lifting that cap.
    A recent storm in the area caused two closed basic 
slooves----
    The Chairman. By the way, I just met with Secretary LaHood, 
and I asked him for administrative relief. And he said, told 
me, they don't have authority to give us administrative relief, 
so it would require legislative action.
    Mr. Ziegler. That's correct. We've heard that same--that 
same point.
    Again, recent rain in the area caused two closed basin 
slooves along Highway 2 east of Penn to overflow onto the 
roadway. The temporary grade raise is going to be put into 
place at a cost of $865,500 and a permanent grade raise taking 
the roadway to elevation 1460 is estimated to cost $7.976 
million.
    Local jurisdictions are also faced with the challenge of 
providing access to certain areas, especially from a Commerce 
perspective. Graham's Island Road on Highway 19, or right off 
of Highway 19 that connects the Graham's Island State Park, 
also needs to be raised. Very recently, the Upper Great Plains 
Transportation Institute completed a study on the economics of 
access to Graham's Island and the State Park, but study looked 
at raising the road from 1455 to 1461 and the cost of that 4.8-
mile project is estimated at $14.4 million.
    Ramsey and Benson County will each have to come with $1.45 
million in local match to complete the project. And, Senator, I 
know they're working on that and that's a big issue for them.
    Also, the AMTRAK line running through the Devils Lake Basin 
is in danger of being inundated. The line has already stopped 
coming through here, but planning a feasibility stuffy is being 
looked at to see what can be done with it.
    The Department of Transportation, of a $700,000 study has 
put in 50 percent of that to pay for the study costs. But a 
preliminary estimate to raise that grade on the railroad 
embankment is about $60 million.
    The Devils Lake Basin is not the only area in the State of 
North Dakota dealing with high water issues. As a recent result 
of heavy rains, 22 sites--that's 22 sites on State highways on 
the West James River Basin were at, or close to being, closed. 
Four sites are inundated with water, you actually have to stop 
on the highway and take turns driving through the water. So, 
those have become eligible for ER funding, and we are going to 
raise those grades this summer.
    Senator I've shared with you before very strong reasons, I 
believe, for continued Federal investment in our transportation 
system. I believe we've created the record this morning, 
Senator, so in the interest of time, what I'd like to do is go 
right from page three of my testimony to a conclusion 
statement, Senator, and the rest of the testimony that I have 
is available to you, to the committee, but it's also available 
to the folks here. But, the fact is, I just want to make sure 
that you get that information and we've created the record on 
it before.
    But----
    The Chairman. Let me just stop you there and say to you 
that the entire statement of yours will be made part of the 
record. And you're exactly right--we went in great detail this 
morning, laying out what is provided in this part of your 
testimony, so that's been given live to the committee, so 
that's all on tape, which is available to members and their 
staffs. So, I don't think there's any need to repeat it, here.
    Mr. Ziegler. So, this afternoon is a conclusion statement. 
I'd like to simply say that, in the transportation world, we're 
anxiously awaiting a new highway bill. As you know, the 
existing bill expired on September 30th of 2009, and we've been 
working on continuing resolutions, and we appreciate the 
Federal money continuing to come.
    What happens, though, in working with continuing 
resolutions, it's very difficult to plan for long-range 
projects. And if we have to continue going with continuing 
resolutions, I would appreciate at least a year, if not 18 
months, of an extension--for the next extension.
    In a conclusion statement, it's essential that Congress--
through the reauthorization process--recognized that increased 
investments in highways and surface transportation in rural 
States and--is, and will remain--important to the National 
interest. The citizens and businesses of our Nation's more 
populated areas--not only residents of rural America--benefit 
from a good transportation network in and across rural States 
like North Dakota. Such legislation would be better equipped to 
address transportation issues in North Dakota and specifically 
here, today, in the Devils Lake Basin.
    Thank you for the opportunity, again, to appear here before 
this committee today, and I hope to answer any questions that 
you may have.
    [The prepared statement of Mr. Ziegler follows:]

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    The Chairman. All right, maybe I could just go to page one, 
here. You have total costs, Devils Lake Basin Highway 
expenditure of $190 million, $161 million Federal, $28 million 
State and local. As I calculate, that's about an 85 percent 
Federal share?
    Mr. Ziegler. Senator, that is correct. Mr. Chairman, that's 
correct. And what happens when we work with the ER part of the 
Federal bill, the first 180 days after disaster is declared, 
the match becomes 100 percent.
    The Chairman. One hundred percent.
    Mr. Ziegler. And that----
    The Chairman. That was going to be my question, because 
this is a higher percentage than we see in the rest of the 
Federal Highway Program, which is typically 57 percent when we 
put in the ARRA funding, 57 percent Federal--that's the State--
--
    Mr. Ziegler. That 57 percent is the actual percentage of 
Federal aid in the DOT's budget. The typical Federal aid 
percentage is 80/20, and when we go to ER in the first 180 days 
becomes 100 percent, that Federal aid becomes a larger percent 
of the total cost.
    The Chairman. So, let me just make sure that we have this 
correct for the record. So, in this case, in the Devils Lake 
Basin, with respect to the road funding that's been done so far 
under your calculation, that's approaching $200 million, and 85 
percent Federal, 15 percent State. And the reason for that is, 
part of it is emergency funding, which is 100 percent Federal.
    Mr. Ziegler. That is correct, Mr. Chairman. It's 100 
percent for the first 180 days.
    The Chairman. The first 180 days.
    Now, 2010, how much will be expended in 2010?
    Mr. Ziegler. Mr. Chairman, we have--we're anticipating 
contracts in the neighborhood of $80 million.
    The Chairman. Eighty million? So, that would take the total 
to $270 million by the end of this year.
    Mr. Ziegler. That's correct.
    The Chairman. Now, Federal Highway gave us the number of 
$404 million. I would assume that they are including BIA roads 
in that total. Is that the reason for the difference?
    Mr. Ziegler. Mr. Chairman, that's what I'm estimating, 
here. I looked at your number and compared it to ours and I 
believe that would be the difference.
    The Chairman. The difference. Because you are not--you 
don't capture the money that is spent on the BIA side of it in 
your figures?
    Mr. Ziegler. That is correct.
    The Chairman. Yeah. They gave us a number of--I remember 
404? $402 million spent so far, so the difference, there, would 
be the money that has been spent through the BIA system?
    Mr. Ziegler. I believe that's the case.
    The Chairman. OK. Let me just say, that goes back to the 
total funding and I think the Governor used the number of $650 
million. Our running total on just the Federal side is $700 
million, so far. And I don't know, maybe the difference--maybe 
the discrepancy, there, is the BIA money may not be in your 
total and as in ours.
    Director Ziegler, if I can go to the final point on your 
chart on page one, which is the estimated charge to raise State 
highways to 1465 would be an additional $250 to $300 million.
    Mr. Ziegler. That is correct.
    The Chairman. Well, all of these things should be very 
sobering to anybody that's listening. I know that the amount of 
money that's been spent here is huge, and it's going to take a 
lot more. I think that confirms the point that many of us have 
been making, is that absent an ability to release additional 
quantities of water from the lake, is going to increase the 
cost of mitigation dramatically, both in terms of raising of 
levies, and raising of roads, and raising of bridges and all of 
the other classes, is that not the case?
    Mr. Ziegler. That is the case.
    The Chairman. One final point that I should make to you, 
and that is, look. We all know that the Federal Government has 
a very serious deficit and debt problem. And while I, 
personally, believe it was imperative that we spend money to 
provide liquidity to the economy at a time of downturn, we are 
now going to have to pivot and start focusing on our deficit 
and debt, because it is growing at an alarming rate. But that 
means things have to be paid for.
    And as I reviewed your testimony, and we discussed this, 
this morning, in Newtown, ASHTO, which is the group of your 
compatriots from around the country are telling us that we need 
about $468 million in a new transportation bill. Four hundred 
and sixty eight billion dollars. Is that the correct number?
    Mr. Ziegler. That's the correct number.
    The Chairman. And if you divide that over 6 years, that's 
roughly $73 billion a year, $78 billion a year, somewhere in 
there. Let's say, $75 billion a year, that'd be $460. Seventy-
five, seventy-six billion a year.
    The trust fund is only throwing off $31 billion a year in 
revenue. So, that leaves us a shortfall of $45 billion a year. 
Is that approximately the gap that we have to fill in?
    Mr. Ziegler. Mr. Chairman, that's approximately correct.
    The Chairman. And so, we either gotta do it through cuts, 
or more revenue from someplace. And I'd just say to you if we 
made cuts of that magnitude, what would happen to the highway 
program, transportation program all across the country?
    Mr. Ziegler. The program would be about cut in half, 
Senator.
    The Chairman. And what would that mean for what you're 
doing, here, in North Dakota?
    Mr. Ziegler. Well, our program would be cut substantially. 
There's no doubt about it. Our needs are shown to be there, as 
we talked this morning, and as we're talking this afternoon, 
and so our program would have to be cut.
    The Chairman. Let's go now to Mayor--we had a chance to 
visit with him at noon today. I want to wish him every success 
in this new challenge as Mayor, of course, he's been a long-
term member of the City Commission, so he's very, very familiar 
with the issues that we're confronting, here. I want to welcome 
our new Mayor, Mayor Johnson.

 STATEMENT OF HON. RICHARD JOHNSON, MAYOR, CITY OF DEVILS LAKE

    Mr. Johnson. Thank you, Senator.
    First off, on behalf of the City, I thank you for coming 
here, today, and holding your hearing, here, because it is 
important to the City and our area. And along with that, to 
thank you for all your support you've given to us in the past 
for our embankment, for all of the infrastructure work that's 
been put into the city, and our new water line--all of those 
types of items. Because without your hard work, and others, it 
wouldn't have happened. So, we thank you for that and thank you 
for being here.
    I, too, have prepared a statement, much as the other 
witnesses have, and I think I'll do as they did--pick out some 
of the highlights. We've talked about a lot of the items 
already, but I think being on the ground floor as we are, here 
in Devils Lake, we probably get a little more personal touch to 
it sometimes than maybe those from a distance. And, we see 
every day what goes on because of the flooding, we see the pain 
it causes, we see the hardships that go on. And certainly, we 
have a lot of partners working with us to help us get out of 
this mess, if you want to call it that. But, it's the people 
down here right--their feet in the ground, you might say boots 
to the ground--that you see the suffering it's caused, and it 
takes its toll on the community, it takes its toll on, I think, 
its civic leaders, too.
    So, I guess the comments that I have today, we know how 
devastating the flooding can be to our farmers, we see that by 
the land view--fly the area like I did last week, it's 
devastating. You see our road system is deteriorating. With 
inside the city, we have issues with ground water, we have--our 
streets are, the subgrade is falling apart, causing the 
cracking and heating of pavement, and a lot of it's hydraulic 
pressure caused by the lake. So, those are big issues.
    We all know about the economic impacts. When the producers 
can't produce their products, they can't spend money. And I 
think there's a lot of things that we could be doing, our 
community could thrive if a lot of these areas were handled. 
Get water off the lake, of course, is No. 1.
    But, as Director Ziegler mentioned, just about every 
arterial route into the city has some type of construction 
going on. And that is a deterrent for economic development, 
it's a deterrent for our business community because it might be 
just as easy for someone to drive a few extra miles and not 
have to hassle with the pilot cars, and with delays in 
roadways, and, of course, the safety issues.
    I think just last Tuesday, there were two calls to search 
and rescue for vehicles in the water. So, safety issue, life 
safety issues are a huge issue, as well.
    And I think a lot of the other stories have been told about 
the loss of revenue and that type of thing. But, the title of 
our gathering here today was, ``What Can the Federal Government 
Do?'' And what should they--what should be their impetus.
    And I really feel, obviously, the first thing we need to do 
is get more water off the lake. I think the west end outlet is 
great, I haven't seen it since it's been pushing the 250 out, 
but that's huge. But, we need more than that. And it's the 
position of the city that, you know, and we have to look out to 
the east side, there's no question about that. We have to blend 
the east side with the water from the State outlet, and do it 
in a responsible fashion. But, if we do nothing, if we let 
nature take its course, and Mother Nature do what it might do, 
it could prove to be a true disaster. And we don't want that 
for anybody, we don't want to spread our problems downstream. 
And I think how you can mitigate that is by, you do something 
about that now. You prepare a structure, you have the Corps 
help design that, along with the State, whoever. And we do a 
controlled structure out the east side, blend the water from 
the west side, and hopefully we can meet some EPA standards, 
and we're hoping we get change.
    And, I think that's No. 2. Get water off the lake, off the 
east side. No. 2 is to work with the EPA as Mr. Sando said. We 
have to do that, we have to get some of these standards 
relaxed, to do that. And if we have those two things, that will 
really get the ball rolling.
    Another thing I think that needs to be looked at, and I 
don't know if its been mentioned here, today, but we have to 
look at the channel capacities. Do we have to do some work on 
those to allow more water to go through the river channels? I 
think in areas, it gets choked down a bit because of the 
capacity. And if we can do that, if we can widen those, take 
appropriate measures, that would be a helpful thing, too. So, 
that's something I think the Federal people can look at, too.
    And then to help out with the financial end of things, due 
to all of the damages that's been caused to the roads, to the 
township roads, county roads, city streets, and other 
infrastructure items--Ramsey Rural Sewer has a huge issue with 
their lift stations and things like that--if money could be 
provided to do those types of things through the Federal 
Government to help, again, mitigate some of the damages that 
have been done, that would be huge. I know we have a lot of 
street work that has to be done, and the counties, townships, 
they're suffering, and farmers can't get to their fields--it 
was amazing when you fly it, it's an eye-opener. You can see 
pictures, but it doesn't hit home until you've met it face-to-
face.
    So, I think those are some of the things that the Federal 
Government could do. I think another thing I'd like to point 
out, is we've talked about the amount of money that's been 
spent, and $700 million is the number that pops up. And I don't 
think that includes lost revenue. The money had--the production 
agriculture had been able to produce. You add that into the 
mix, and I'm sure it's well over a billion, would be my guess. 
And that's just a layman's guess. But that should be factored 
in, it's a real number. It's not contrived, it's a real thing. 
And that money rolls around our community and helps us do 
things with that money, too.
    So, I guess those are the four things, recapping would be, 
to get water off the lake off the east side, blend it with some 
west side stuff--continue the west end and all of that--get the 
EPA standards, and whatever necessary standards need to be 
changed to allow more of full, the riverings, the rivers to 
have the--create the capacity to move this water so we can get 
some water off the lake, and then money for mitigating some of 
the damages to the affected areas--not just the city, but our 
whole area. And if we--well, if that were my wish list, that'd 
be pretty good.
    The Chairman. All right.
    Mr. Johnson. I'd be pretty happy, actually. And my term 
would get off to a good start.
    But, having said that, it's important. Our community can't 
take another foot of water, I'll tell you that. We, this last 
foot that came on, this year, was devastating. We got to four 
inches of rain in the upper basin, and people were running 
scared. You could see it. And, I've lived here since 1970 and 
I've never seen as much desperation, hopelessness, fear, anger, 
as I have, probably, this spring.
    So, again, I thank you for being here, and would answer any 
questions you may have.
    [The prepared statement of Mr. Johnson follows:]

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    The Chairman. Thank you. Thank you for that excellent 
testimony. It's been a very good panel and I think we've made a 
very important part of the record, here.
    Let me just ask, Mayor Johnson, if I could, you know, 
there's a lot of challenging news, there's also some good news 
in this community you were sharing with me at noon, and maybe 
it would be appropriate to share some of that in terms of new 
employers who are coming to town, in terms of the investment 
that's been made at the National Guard training center, and 
that's proving to be a magnet for units around the country that 
are coming, now, to Devils Lake to do their training. And, 
also, the construction activity--there's a positive side of 
that, as well, because it's generated a lot of additional sales 
tax revenue in the community. And maybe you could share with us 
a new employer coming to town?
    Mr. Johnson. Sure. There's--Devils Lake has been working 
with a couple of major projects and one looks like it's being 
finalized and that would be good for our community, a number of 
good jobs, good-paying jobs.
    This I got an invite in the mail here, last week, to 
Summers Manufacturing. They're going to open their paint 
processing area before they sub that out, and they're going to 
start doing that here, and I think they're having some type of 
an open house in August. So, that's good news.
    Our sales taxes are up, so that's good. Housing market 
appears to be strong. Camp Grafton, what a gem that is for us. 
They're opening up their new RTI, they're going to have an open 
house out there, I believe, the first weekend in August, and 
they've got another project online. I can just tell you, up 
from where I live in town, there's a number of Guard families 
within two or three blocks of where I live. And young families, 
good-paying jobs. And that's good for our community. Thank God 
for them. Let alone the services they provide the community 
when we need it.
    But--so, there are some good things, and our sales taxes 
are going to be high--artificially high, maybe, because of the 
construction, it's not sustainable. So, once the construction's 
done, you know, then trouble will be around the corner.
    But, hopefully by then, hopefully by--I'll be optimistic--
hopefully by next spring, we're going to have some more water 
moving, and then we'll get to more normal times.
    The Chairman. Very good. Thank you.
    I thank this panel. And I'll call now the second panel. 
Spirit Lake Nation Chairwoman, Myra Pearson; the Minnewaukan 
City Mayor, Trish McQuoid; Ramsey County Commissioner, Joe 
Belford; and the Devils Lake Basin Joint Water Resource Board 
Manager, Jeff Frith.
    Welcome, good to have you all here. Why don't we begin with 
Spirit Lake Chairwoman, Myra Pearson?
    Myra, thank you very much for being here, and please 
proceed with your testimony.

 STATEMENT OF HON. MYRA PEARSON, CHAIRWOMAN, SPIRIT LAKE NATION

    Ms. Pearson. Good afternoon, and thank you, Senator, for 
inviting me to your hearing this afternoon. My name is Myra 
Pearson, and I'm the Tribal Chairwoman for the Spirit Lake 
Tribe, which is located in North Dakota in a region of the 
State that's been plagued by flooding for more than--going on 
two decades, actually. And I've heard a lot of good comments, 
here, this afternoon. I have copies of my testimony that I'm 
going to leave with you, and I hope you can include that, you 
know, as part of the record.
    The Chairman. Without objection, it will be included.
    Ms. Pearson. OK. And I--for the record, I've served as 
Chairwoman for the Spirit Lake Tribe Reservation for, on two 
occasions--once during the late 1990's, from 1997 to 1999 and 
presently I'm serving my final year of a 4-year term, but that 
4-year term began in 2005, and my term will be up next spring.
    And the reason I want to mention that is I was here in the 
nineties when we sat out at the Elks Club, talking about these 
very issues. I'm here again, you know, these past few years, 
still talking about the same issues. And, you know, shame on 
us. Shame on us today. Shame on me, shame on, you know, on us 
for not demanding a permanent fix for all of the heartache that 
we've caused ourselves.
    It's frustrating, and I want to commend Mayor Johnson--
welcome to the, you know, to your new position, post, here in 
Devils Lake. You know, he kind of tapped on a lot of stuff 
that's very true. There's so much frustration. I went out to 
Washington and I couldn't quite do what I was supposed to 
without, you know, getting emotional about this whole thing. 
And, you know, we've suffered greatly, but we've all managed to 
adapt to it.
    This morning we had, at our office, during our meeting we 
were--we had a couple of people from FEMA. And it's being 
discussed that, you know, we're waiting for the big disaster to 
hit. I don't want to see that happen, because I think we've got 
too many generations behind us--and ahead of us--that we should 
have looked out for. And we've got those that are up and 
coming, you know, that we need to do something now, so that 
they can be protected in the future.
    Earlier, you know, I heard it mentioned, you know, we've 
got to look at the Nation's deficit, as well. That's very true, 
we're all a part of this Nation. And we have to look at ways 
of, how can we ask the Government to give us more money without 
showing them that we're going to do something with it this 
time? How many years have we sat here, now? And I say, I mean, 
we've wasted this money. We haven't done anything with it, 
let's do something with it, now. Let's make our lives more 
safer, and let's do something with whatever we're going to ask 
for. But, I'd be ashamed to ask for anything more, because of, 
you know, we haven't done anything with what they've given us 
already. And I think it's a shame, because our Nation--as 
everyone in this room knows--we are in deficit problem. And, 
you know, we need to do something--we need to do something 
that--we also better respect Mother Nature. We should have done 
that a long time ago. We should have respected her laws, as 
well as our own--our local, our Federal, our State laws, we 
should have respected all of those things, including hers. And 
I think we would all be sitting in a much higher ground today, 
but a respectable one--not asking the people downstream for 
permission to run this water, or the people into Canada. We 
shouldn't have to sit here and do that today.
    We've created this problem for ourselves, now. Let's all 
work together and try and fix it. But let's think of the future 
generations that are coming up, yet.
    I'm just going to jump to the conclusion of my testimony, 
because I know time is running short, here. And I didn't mean 
to, you know, get into it this harshly, but I'm also going to 
leave inundation maps, and I want--you know, I wanted a part of 
the record on the land loss that Spirit Lake Tribe has lost to 
this flood--we all hurt. We all hurt, and in that land that we 
have out there is all we've got, so it's a big, you know, it's 
a big loss to us.
    But I'd like to, excuse me, read through the latter part of 
my testimony, here. But for years, you know, I say we've 
watched this millions and millions of dollars that have been 
used to secure existing roadways, and yet we have no solution 
to our flooding. We watched as our communities, such as those 
in the Red River Valley that have been ravaged by flooding, but 
have recovered from the floods with the support of the Federal 
Government and the knowledge of the local governments, our 
flooding issues are like those in the Red River Valley, but we 
have yet to recover from that.
    Everything happens around us, but it never gets to us. But 
we're in the heart of the whole problem, you know, in this lake 
region.
    At this point, there are several measures that have been 
taken by the Federal Government which can support our efforts 
to alleviate the impact of the flooding. First and foremost, 
the Spirit Lake Tribe has agencies and programs in place that 
are ready, able and willing to respond to the crisis, but we 
need direct funding so that we can take the necessary steps 
toward our resolution. The Tribe has the infrastructure in 
place to fix our own roads, respond to emergencies for our 
constituents, protect and preserve our natural resources, and 
address health impacts, but we need direct funding to implement 
many of the plans that we have already developed.
    In terms of cross-jurisdictional issues that impact, not 
only the tribe, but also farmers and ranchers, nearby towns and 
the State, we are committed to working together to develop a 
long-term, sustainable solution to the flooding, through a 
water diversion project that will be feasible and sustainable.
    In closing, I want to state for the record that I am 
committed to working with the elected officials at the Federal 
and State levels of government to develop both short-term and 
long-term solutions to this emergency. Waiting for another 
decade is simply not an option.
    I thank you all for your time and your consideration of my 
testimony.

    The Chairman. Thank you very much. Thanks for being here, 
and thanks for your testimony and thank you for your 
leadership.
    On my list, we have next the Minnewaukan City Mayor, Trish 
McQuoid, and then Commissioner Belford, and then Jeff Frith 
from the Devils Lake Water Resource Board.

  STATEMENT OF HON. TRISH MCQUOID, MAYOR, CITY OF MINNEWAUKAN

    Ms. McQuoid. Hello, and thank you for inviting me here 
today. I am Trish McQuoid, Mayor and business owner in 
Minnewaukan. I am here today to inform you of some our current 
statuses and doings in our town. I, unfortunately, don't have a 
lot to report, but there is a lot going on for our city, 
currently.
    It seems that the waters of Devils Lake have somewhat 
leveled off for us at this point in our town. Behind our school 
the water hasn't come up much more, we've been protected, right 
now, our wave action is--we've been saved by some of that, it's 
come from the right direction every time, so far.
    So, I have been out to the outlet, I went out there the 
other day, a gentleman came and I took him out there and talked 
to Carl Doushire, and it is running at 250 and, boy, the water 
really is flowing through there. And that is such an awesome 
sight to see, for all of us.
    Will it be enough? I don't know, you know. I know that 
everybody is working on trying to make sure it can go up and we 
can get rid of more water as fast as we can. Will it be fast 
enough? I also don't know that.
    So, here we sit. And hopefully, I guess, there won't be any 
hiccups in any of your plans, there, to have it shut down 
temporarily as it was last year, and so on and so forth. So, if 
we could get something on a Federal level taken care of, 
knowing that this emergency for our lake and our people of our 
community, and get those levels higher, like Mr. Sando said, I 
mean, it would just be so huge and give some relief to some 
citizens, and to some of us city officials.
    Currently, our town has the Army Corps of Engineers working 
on a Section 22 study of feasibility for us, and I'm sure 
you're all aware of that. I'm hoping to receive some results of 
that in the next four to 6 weeks. I was called on Tuesday and 
asked to get some citizens together of business owners and 
different people that live around and get some of their input, 
and I believe they want to come and meet with us one evening--I 
don't know that date or time, yet--but it would be real 
important for that to take place.
    Right now, I currently feel that the relocation--or even a 
partial relocate--across Highway 281 would be a great thing for 
us. I have not investigated anything as far as land or certain 
landowners or anything like that. I do know Mr. Jerry now has 
put in some money, or put in an application for some money to 
build us a new school. I think that's all really important, and 
hopefully one of our local farmers or landowners outside there 
for the west on 281 will come through and help us out with 
something like that.
    If we would get a possible relocate--even a partial 
relocate across the highway--then again, our town can grow, we 
can regain tax base that we've lost. You know, the homes that 
leave our town with the NFIP, we don't gain anything from that, 
we lose from that. And I wish the--somewhere the Federal 
Government could help us out on that. They put that rule in 
effect, and maybe they can take that rule out of effect, as 
long as a basement isn't put on that home, or it is a mobile 
home or such, I'm not sure.
    I feel that being a closed basin city that we're basically 
dying a slow death, there, because we're not really allowed to 
do anything right now--our hands are tied.
    We currently have seven homes that are leaving in the next 
two to 3 months, some starting next week. And there again, I 
understand that they're working on our Section 22 and they're 
going to come back with the best opportunity for our town. 
Living in limbo is really hard for us, and not knowing when the 
rain storm's going to come.
    If we were able to obtain land and funding for 
infrastructure, we do have our water treatment plant and our 
lagoon system which would save a lot of Federal money and State 
money to do the relocate. So, I think that's a big bonus for 
us, on our side. But, basically, what I would like to see done 
here, and I'm not sure how the Federal Government should 
respond, but I think the west-end outlet is--now that it is up 
and running at 250 CFS is a great thing. If we can bump it up 
and get it going higher for the summertime, and even if we 
could keep it at a lower rate through the winter. I mean, if we 
have a rough winter, and we can get as much off as we can right 
now, I think it's just going to be huge for us, as the whole 
lake region area.
    The Chairman. OK. Thank you very much.
    Ms. McQuoid. Thank you very much.
    The Chairman. I know you're going through a tremendous 
strain, and I can't even imagine what it would be like to be 
Mayor of a community that has so many incredible challenges. We 
really admire the work that you're doing and the leadership 
that you're providing.
    Ms. McQuoid. Thank you.
    [The prepared statement of Ms. McQuoid follows:]

    [GRAPHIC] [TIFF OMITTED] T8154.191
    

    The Chairman. Next we'll go to our Ramsey County 
Commissioner, Joe Belford. Welcome, Joe. Good to have you here.

     STATEMENT OF JOE BELFORD, COMMISSIONER, RAMSEY COUNTY

    Mr. Belford. Thank you, Senator. I'm going to move around. 
I use a map, I learned that from you.
    [Laughter.]
    Mr. Belford. Traveling the halls of Washington.
    The Chairman. Yep, I like maps.
    Mr. Belford. And while he's bringing it up--is this thing 
on? I thought the Mayor had fixed this when he was here, but I 
guess not.
    [Laughter.]
    Mr. Belford. You see that map in front of you that talks 
about the history of Devils Lake. And again, of course, when 
this fun started in 1993, we were sitting on a 40,000-acre 
lake. And basically, here--and we had, over at Stump Lake there 
was a small portion. And I was part of a group--and some of the 
rest of them are here--that formed a Lake Preservation 
Coalition to get water into the lake, and boy, I've been sorry 
I've been on that committee ever since.
    [Laughter.]
    Mr. Belford. Because we were successful.
    Governor Hoeven. The Chairman. I'll never forget, when I 
was first elected to the Senate and I was called to a meeting 
with the Devils Lake leadership, and we met in a little 
schoolhouse that no longer is, because it's in the lake, and I 
was told, ``Senator, you've got to get water into this lake. 
And you've got to do it now.''
    Mr. Belford. So, you're the guy we can blame.
    The Chairman. No.
    [Laughter.]
    The Chairman. You know, there's a higher power that's 
involved in all of this.
    Mr. Belford. Anyhow----
    The Chairman. I think we all understand, you know, Mother 
Nature is a powerful force. And we know in the history from 
4,000 years, we look back--this lake has gone through this 
cycle. And those who think it's not going to happen again, I 
think are making a bad bet. And it's very important for people 
downstream to understand that this is not a crisis confined to 
the Devils Lake area. If there is an uncontrolled release of 
water, this is going to create havoc for people downstream, as 
well.
    And so, all of us really are in this together. This isn't--
this isn't a matter of the Devils Lake Basin being on the 
opposite side of people downstream. Because what starts here, 
ends up down there. So, it's critically important that our 
neighbors to the south understand, we're in this together.
    Mr. Belford. And that's correct, and of course, not only 
that, but there are four counties involved in this lake, 
there's Nelson, and Downer and Benson and Ramsey and most of 
those folks are here today, as well.
    The lake, as I indicated, was 40,000 acres, and now it's 
sitting up at about 188,000 acres as we speak. And we don't 
want it to get to the red, which you see up here is the 58 
elevation and the different areas. And then, of course, the 
Tolna coulee is right down here. And we don't--we can't afford 
to let it get up to the 1458 elevation.
    Millions of dollars have been spent--millions of dollars--
as we've talked about and heard from some of the people who are 
testifying today. Constructing the levies, relocation, and of 
course, the water and sewer infrastructure that had to be 
either relocated or increased, not only by the city, but the 
rural district and everybody else as this has gone on.
    The buying of homes--and I want to tell you, that is 
really, a real experience, in particular in 1997 when 400 of 
them had to be taken out of here. And you're standing beside 
some family that's just losing their home or it's having to be 
moved; or, in the case of some of them, the addition out the 
south of town--not the addition, but the other one--where we 
had to burn homes. Couldn't get them out. Standing beside a 
lady with her home being burnt is not fun. I have had the 
opportunity to do that, and I'll tell you, it's a real 
experience. So, we need to get something handled, so that we 
can stop doing all of these things with the homes that are 
happening and--not only the homes, but the farm homes, and the 
farm buildings, which you're going to see some pictures of a 
little bit later.
    And that holds true with Spirit Lake Nation. Myra and I 
work together very closely, and they have homes going under, 
roads and of course, land which has affected both of us--Ramsey 
County, and Downer, Benson, Nelson--have lost thousands and 
thousands of acres of land in the lake. And, of course, one of 
the things that's really hurt that loss is the fact of the tax 
base eroding. When that land goes under water, we reduce at the 
end of the day acres that's a very minimal amount, because it's 
the farmers' for theirs to keep, and when the lake recedes--I 
don't know when that's going to be, but we certainly--it's not 
the county's to take it over. So, the tax loss for the school 
districts, the townships, the counties, and so forth, has been 
absolutely devastating through this whole thing, as well.
    The other towns of Church's Ferry, of course, as you know, 
has bought out, the first town that we had to take out, and 
that was a heart wrenching thing. I know you were out there, 
and so was I and we--and now Penn has 9 homes that have to be 
taken out--not because the city of Penn is in the lake, but 
because the groundwater, which was spoken about earlier, the 
sewer systems, which are NODAC systems, will not function. And 
so there's problems there.
    And, of course, you heard from Mayor McQuoid of 
Minnewaukan, and I've been over to several meetings that she's 
had and she's doing a great job over there. She got thrust into 
that, made it to high point, but she's only up well, but--and 
that's a county seat. And well in Benson county and imagine if 
Minnewaukan does have to be bought out--where's the county seat 
going to go? That'll be another big issue, as we all know, in 
sitting here and speaking and talking about this stuff.
    And then, of course, the agricultural land. Very 
devastating, you can see all of this up here. Quality of 
farmland, down and around in here, and it's all along, and it's 
all over. The loss----
    The Chairman. Can I stop you, just on that point, because 
the Governor made a point, earlier, that I think is very, very 
important to repeat for the record. And that is, the amount of 
water that is being stored in the Upper Basin, already.
    You know, we built, I think it was in the tens of millions 
of dollars, of Upper Basin storage. But, just what's naturally 
occurring in terms of Upper Basin storage, last time I was here 
we took a helicopter tour and what is--the amount of water in 
the Upper Basin, here, is really hard to get your mind around.
    So, people that don't think--there's no storage in the 
Upper Basin occurring, they just not--it's not right. There's 
an enormous amount of storage occurring in the Upper Basin.
    Mr. Belford. And if you look over at your map, you can see 
all of the little mini-Devils Lakes, over in Nelson County, 
like Loretta and Kislew and so there's a lot of water being 
stored in the Basin, as well. All them dark spots are water. 
And, of course, it's forcing some of the farmers off and it's--
or leaving them with very little income, and it's very, very 
stressful, where agriculture is the lifeblood of all of the 
communities around here, we have to figure out a way to 
maintain that revenue that has been lost.
    The roads--loss of roads, raising of roads, in all 
directions--Francis probably went over that very well, and that 
has been very, very--Highway 96 and 7, when 57 was closed, Myra 
remembers, we were running school buses out of Devils Lake 
leaving at 6:30 in the morning, picking up first-graders, and 
getting them back out there at 5, 5:30 in the afternoon. I hope 
we never have to go through that again. And 7 buses, leaving 
this town, going out, picking up students on the Reservation. 
And the other thing that really bothers me about that is the 
high winds, when the waves blowing over, and hauling kids in 
buses, driving through that type of thing. Just, one of them 
buses into that lake would be an absolute--money could never 
bring that back. And so that's--these are all issues that we 
need to continue to not leave our grips.
    And, of course, all of the roads that Francis went over but 
we also have county and township roads. We--up till the other 
day--we did not have a north/south county road in Ramsey open, 
except for Highway 20. And we got a contractor, awarded the 
contract, and he's working on Ramsey 3 and Ramsey 4 to get them 
open. And fire service, and all of those people.
    In fact, we got to the point as the Governor knows, on 
ambulance service, we've got country roads that we cannot get a 
normal ambulance into, particularly at a rainy time, because of 
the narrow shoulder, the water on the shoulders, and so forth. 
And the Guards, General Spriztenatti and the Governor's office 
were able to procure a four-wheel drive ambulance to be housed 
at our ambulance service for those kinds of emergencies. And we 
have to keep preparing for those kinds of things.
    But, it just keeps going on. The rail service, losing 
AMTRAK would be devastating, or even if the AMTRAK train 
someday, with the grade raising let go, when it was crossing. 
Can you imagine? I can't, I don't want to. But it's very, 
very--could be very real.
    Emergency services--the shopping and the marketing of the 
farm products is getting tougher because of the roads. In fact, 
a lot of the country roads--and I've traveled these roads for 
years, I know them well, I've been the Commissioner for 22 
years, and I was in the business for 35 years, these farmers 
are going to have a real problem getting their grain out of 
their fields, to their beds, and to market until it freezes up. 
In fact, one farmer told me that he has six quarters, planted 
and seeded, he thinks he can get a combine in before the rains 
that wash the roads--and this is mini-Devils Lake, this has 
nothing to do with the main lake--and before he lost the roads, 
and he thinks he can get a combine in this fall to harvest it, 
but he'll have to pile the grain on the ground, and take the 
grain out of there after it freezes, because the transportation 
network in the townships will not handle these types of loads.
    So, these are other things that we're dealing with, and 
struggling. We've had a population loss for the area. Citizens, 
to get away from it, they're sick of fighting the elements. 
It's definitely--you can feel it. And the counties, the school 
districts, the townships, cities suffering loss of tax base 
that have to keep operating or cut back the needs of their 
budgets. And all of these things, for us elected officials that 
have to deal with it, it's timely and it's frustrating, and we 
do things that we don't want to do.
    The other thing is the mental and physical stress to keep 
operating with less revenue, not only for farmers, but for the 
businesses, with the shortage of traffic. Right now, with the 
traffic--or the work on 57, all of the roads, Francis 
indicated--people get sick of fighting this, and they go other 
directions, if there's anything on the outer edge. And we 
really saw that at 97. My business dropped 40 percent in 1997 
when Highway 57 was closed.
    And the time is long overdue for something to happen for 
relief from the rising waters of Devils Lake. We can not wait 
any longer, we need to move water out of the east end, in 
addition to the State's outlet, and that is working very well, 
I was out there, I've had a couple of tours out there. And it's 
great to see that canal running, full and heavy.
    And as you can see from the damages, and the stress, and 
the loss of population, it's really--there's no place else in 
the United States like it, what we're going through. The great 
Salt Lake encroached Salt Lake City in 1982, Senator Bennett, 
when I was out on one of the trips, they put them pumps in and 
that retreated. So, we are one of our own.
    And so, with that, I certainly want to thank you, Senator, 
for being here today and all that you've done in the 
Congressional delegation, and of course, Governor Hoeven is 
here and has done a great job, and a great asset to our 
community. But we need action, and we need it now. Not 
tomorrow. We cannot wait any longer. The downstream cities 
cannot wait any longer, either, because if it breaks out, it 
occurs at the Tolna coulee, it will be a huge disaster for all. 
From here, clear on to the Red River.
    So, we're all in this thing together, it's time we put 
something together, east end outlet, spillway, whatever it be, 
we are overdue because we've got so much water in the lake, I'm 
not sure now that we can handle it, if we got a real disaster.
    So, thank you.
    The Chairman. Thank you, Joe. Thank you very much. And I 
appreciate very much your being here, and I appreciate all of 
your years of effort.
    Mr. Belford. I'd like to have Scott show a couple of the 
farmsteads, now.
    The Chairman. OK.
    Mr. Belford. That's the Towleson. A little dark but that--
and we labeled them, though. So, there should be another couple 
of more in there. Is the Starstein one in there?
    [Laughter.]
    Mr. Belford. Anyhow, the reason I mention the Starstein 
family--I've been one of the family for years, they have lived 
on that farm for years. They're here today, but they're no 
longer able to be there, because they can't get there. A 
homestead farm. And that's just one of the many that are out 
there that are in trouble. And if you get pushed out of your 
home, it's not fun.
    Thank you.
    The Chairman. Thank you.
    Next, we'll go to Jeff Frith, Devils Lake Basin Joint Water 
Resource Board Manager. Welcome. If you could get a microphone 
in front of Jeff, there.
    Mr. Frith. I don't know, I'm usually pretty loud, so I may 
not need it.

STATEMENT OF JEFF FRITH, BOARD MANAGER, DEVILS LAKE BASIN JOINT 
                      WATER RESOURCE BOARD

    Mr. Frith. Thank you, Senator, for allowing me the 
privilege to address this Senate committee, and I'd like to 
welcome the distinguished members of the panel, as well.
    We do have some visualizations to go along with my 
presentation, and I'm more of a visual person, and I hope some 
of you are, as well.
    Scott, if you want to run through some of these slides. 
Devils Lake Basin, we're a rather large basin, 3810 square 
miles, 2.5 million acre feet, or two and a half million acres--
go ahead, Scott--in Northeastern North Dakota. And next, we'll 
kind of go through what has happened in the lake region.
    And Devils Lake Basin, currently in a wet cycle that began 
approximately 1980. Precipitation averaged about 4 inches per 
year during--more per year--from 1980 to 2010 than during the 
previous 30 years. Increase in precipitation resulted in 
dramatic increases in inflows in Devils Lake beginning in 1993.
    Much of the increase in precipitation during 1980 to 1993 
went toward filling soil moisture deficits, the upstream chain 
of lakes, and thousands of smaller lakes and wetlands in the 
Upper Basin, thus little of the precipitation entered the 
Devils Lake system.
    Following the summer flood of 1993, most of the lakes, 
wetlands in the Upper Basin were full, and inflow to Devils 
Lake increased dramatically. These are the basin flows from 
1993 through 2009, and as you can see on the side, here, these 
are hundreds of thousands. And we have well over, you know, 
500,000-acre feet a couple of times, and as was mentioned last 
year we had a peak of 590--close to 600,000-acre feet. Four 
times in the previous 30 years, or the 17 years--just four 
times--we've not reached the 100,000-acre mark.
    On the next slide, you'll see in the previous 30 years, 
there were just a couple of times that we've reached over the 
100,000-acre feet. So, a very dramatic difference in climatic 
changes.
    Pictures are worth a thousand words. And I have some 
visualizations--this is 1992, a satellite image, you can see 
the separation of the lakes in through here, Stump Lake is way 
over here, East Devils Lake, you know, the upper chain of lakes 
a long distance away from the main body of water, down in here. 
Pelican Lake, we have Ervin, Alice, Mike, Chain, Dry Lake, 
Cavanaugh, Sweetwater, and Morrison. All separated lakes, and 
clearly definable.
    And if we go through these images, this is 1994, we can see 
a dramatic increase in wetlands, you can see the size of the 
lakes, here, see in the Upper Basin they're increased, as well. 
1998, more water, again, this is after the 1997 inflows that 
we've had, and here, the Upper Basin Lakes are starting to 
become one--Pelican and Devils Lake are merged, and we're 
getting close to running over into Stump Lake.
    This is 2003, wetlands have increased again, the Upper 
Basin lakes are full. You can see the Devils Lake and how much 
it has increased. We're currently at an elevation, here, of 
1446.4. We're covering 120,000 acres, and we've started to fill 
up Stump Lake.
    This is 2006, again, this is part of their--our dry years 
within our wet cycle, if you would, and we've completely 
filled, or put on, about 43 feet onto Stump Lake, over here, 
and if we go next, 2009, this is November of 2009, and you can 
see, Alice, Ervin, Mike's, Chain--they've all become one. 
They're merging with Dry Lake, over in here, and we're becoming 
an island, you know? Channel A is here, we've got the Mave 
here, so we've got this--virtually an island over in here. 
These townships have been absolutely devastated with the amount 
of water put on them, and the amount of water over in the basin 
over here, and just the wetlands.
    And the next slide is 2010. And I have a printed out copy 
of that behind me, and people can see the amount of wetlands. 
And, you look at that and you wonder, ``How are people farming 
that?'' How do you get from Point A to Point B, and it's just 
an absolutely incredible image. That was from the 15th of May, 
this year.
    This is the railroad bridge that had been in everybody's 
discussion, this is right east of Church's Ferry--this is 
barely out of the water. Freight trains no longer cross that 
intersection, it's just left up to AMTRAK, and AMTRAK's going 
to banish that if the lake rises another foot. city of Church's 
Ferry, this was bought out in the early 2000's, and very few 
local residents remain there. People that have chose not to 
participate in the buyout, but you can see the water around 
that.
    The city of Minnewaukan, you know, Trish has her hands 
full. That's the city of Minnewaukan, flooded farms, we have 
several. Joe talked about the Starstein farm, I think that's in 
the next slide. That's in 1990, that's what it looked like. It 
was a viable, producing small grain farm, typical of any in 
Northeastern North Dakota, and the next slide shows what it 
looked like last year, and it's even worse this year. That road 
going into it is completely underwater, and as Mr. Belford 
mentioned, Mr. Starstein and his wife had to move to town.
    After how many years of being on that homestead, Joe?
    Mr. Starstein. I've lived there since 1949.
    Mr. Frith. Yeah. So, farmlands are--this is what the 
farmlands--that's not a picture of the Florida Everglades, 
folks. That's Northeastern North Dakota. And that was taken the 
spring of 2009, so that picture has actually increased 
dramatically from last year, as well.
    The Chairman. Can we go back to that one, Jeff?
    Mr. Frith. Yeah.
    The Chairman. Can we go back to that one, because I think 
this is very, very important, for those who think there is a 
lot of capacity for additional Upper Basin storage. I think 
those of us who have seen what's happened over this last decade 
know that there just isn't a whole lot more capacity in the in 
the Upper Basin, the Upper Basin is saturated. The Upper Basin 
is absolutely soaked. So, this idea that there is a lot of room 
for additional Upper Basin storage, I don't think fits the 
reality that we can see on the ground.
    Mr. Frith. Agricultural impacts, a lot of people have 
mentioned those. And for every foot of elevation, we lose nine 
to ten thousand acres. We've lost 13,000 so far this year. 
Almost 400,000 acres within the Basin have been lost, so far--
212,588 in Ramsey County, alone.
    The annual economic impact of $83 million--this is numbers 
from the NDSU study, that's just Ramsey and Benson County, 
that's a multiplier of economic impact that we've lost within 
the last 5 years on an annual basis, so you multiply that past 
the--you know, for the 17 years that we've been fighting this. 
And then 530 ag-related jobs lost in our communities. That's an 
awful lot of jobs lost for a State the size of North Dakota.
    What's being done? We're doing some Upper Basin storage. We 
have a couple of projects, we work in cooperation with the 
State Water Commission and an ESOP Program, and the ESOP 
Program stores about 1,000-acre feet of water on 338 acres. We 
also have the Sweetwater Morrison Storage Program, which pays 
about 30 landowners to store an additional half foot around the 
Sweetwater- Morrison Lake area, currently they're storing 
almost a foot more.
    Other entities storing water in the Upper Basin include 
U.S. Fish and Wildlife, Natural Resource Conservation Service, 
and the North Dakota Natural Resource Trust Fund.
    Difficulties in doing more--closing drains, legal or 
natural, would be very difficult and prohibitively expensive. 
The North Dakota Supreme Court upheld the determination that 
drains did not cause the Devils Lake flooding, that's within 
the landowners' lawsuit.
    The Chairman. Let's stop on that point, if we can. And 
that's a very, very important point to make. The Supreme Court 
of the State of North Dakota made a determination that this 
flooding in Devils Lake is not caused by drains. You know, 
we've heard a lot of commentary, both in Washington and here, 
downstream, and from our neighbors in Minnesota, interestingly 
enough, that this is caused by drains. And our Supreme Court 
has made a determination that is not the case. So, if we're 
dealing with facts, here, facts are very important, the notion 
that drains caused what's happened in Devils Lake is not--it's 
just not correct.
    Mr. Frith. Thank you.
    Would storing more water help? Let's take a look. In the 
inflows in 2009 was about 590,000-acre feet. If you assume a 
vertical-side water storage site's two feet deep, you would 
have--you would need 295,000 acres of wetlands to hold that 
water. Often the two foot evaporation, evapo- transferation 
number is used in figuring out how much water would be lost to 
the atmosphere, or through plant respiration or metabolism in a 
wetland, which in a perfect world might be accurate. However, 
in some years, like last year, for example, the weather was 
cooler, cloudier, and as a result, ET was quite low. So low, in 
fact, that despite the fact that they--that after a very wet 
spring, the summer and fall were dry as compared to the 1993 
standards, there was a greater surface water in the Devils Lake 
Basin in November of 2009 than there was in November of 2008. 
And if you recall, the November of 2008, the fall of 1908 was 
extremely wet in the Upper Basin.
    So, the high that Devils Lake reached in the spring of 
2009, we never really backed off that high elevation last year. 
So, the minimal inflows that we're seeing from June, onwards, 
seemed enough to compensate for any evaporation loss that we 
had.
    This is what happens to some of the homes around the shores 
of Devils Lake. As Joe mentioned, that's not a very pretty site 
to have to go through with a landowner.
    What we don't need, we don't need false promises and false 
hopes. We don't need an opposition and ignorance, we don't need 
more homes lost, we don't need more acres lost, and farmers 
displaced, and please, no more studies.
    [Laughter.]
    Mr. Frith. What we do need is understanding and acceptance, 
a workable compensation plan for inundated farm acres. Senator, 
I know you worked tirelessly to try to get that passed in the 
1908 Farm Bill, and what was passed is workable, but it's not 
being implemented as you intended, or you would like. So, 
that's--a workable compensation plan for inundated farm acres. 
Right now, we're storing, you know, some 400,000 acres of 
wetlands, and--for nothing. For free. Farmers are doing that 
out of--and I don't know if they're, certainly not out of the 
kindness of their heart, but it's certainly involuntarily. They 
would like to have that land back.
    A comprehensive plan of action for moving more water off 
the lake. 250 CFS out of the State outlet is greatly 
appreciated--we appreciate all the State is doing and we need 
to eat some of those Federal standards that the EPA has, the 
Clean Water Act and different things like that, certainly an 
east end outlet to compensate or blend that water to move more 
water off this lake is something that's needed, and it's needed 
soon.
    Fargo is working on their flood diversion plan, and I know 
your Budget Committee is probably heavily involved in that 
aspect, as well. From a mitigation standpoint, they're looking 
at--is it a 500-year flood diversion? So, that's a quarter of a 
percent of risk responsibility. So, when we're talking about a 
13 to 14 percent risk that Devils Lake could reach its natural 
elevation, overflow elevation, that's really got to be an 
unacceptable elevation for our downstream communities. And, you 
know, a lot of it is, you know, we mentioned a lot of 
downstream mitigation, we want to mitigate against downstream. 
But what about the mitigation for the upstream, as well? 
Mitigating against upstream damages has to come into play at 
some point in the conversation, whether it be compensation for 
lands that are inundated, or some type of aspect like that, but 
we need to move water off the lake, and we need to do it soon.
    We're all part of the same watershed. So, moving water out 
of Devils Lake shouldn't be a real big concern. Devils Lake 
Basin, as big as it is, it's very small compared to the Red 
River Basin that it's a part of, and an even smaller aspect 
when you look at the sub-basin that it's a part of in the 
Nelson River Basin in Canada, and globally in the Hudson Bay 
watershed.
    This is the old post guard, people have seen it. You know, 
that lady is standing at the junctions of Highway 20 and 57 and 
I believe that's about a 14--I can't read that, Scott, 1419 
elevation. And the top of it--the very top--is 1437, I believe. 
So, we're 15 feet higher than the top of that pole, currently. 
So, to put that in perspective, that's an awful lot of water.
    I'd be happy to take any questions.
    The Chairman. Thank you very much, Jeff.
    Mr. Frith. And if we could also, Senator, State Water 
Commission put together a Devils Lake flood fax, and we printed 
a whole bunch of them out, if we could enter that into----
    The Chairman. Yeah, we'd be pleased to enter that in the 
record, and that could be very valuable to have in the record.
    [INFORMATION]

                  Devils Lake Fact Sheet 2010

    Devils Lake has reached its spill elevation and overflowed 
into the Sheyenne River at least twice during the past 4,000 
years. The last time it occurred was less than 2,000 years ago.

    The water quality on the east end of the lake where an 
uncontrolled overflow would occur is 5 times worse than the 
water quality o the west end of the lake.

    At its spill elevation, the lake will cover more than 
261,000 acres.

    The surface area of Devils Lake has increased from 44,230 
acres in 1993 to more than 177,000 acres today, making it more 
than 4 times the size of the District of Columbia.

    The volume of water has grown by more than 6 times.

    The lake has risen nearly 30 feet since 1993. Between 2004 
and 2007, Devils Lake spilled into Stump Lake and the two lake 
are now equalized. During this time, Stump Lake road 43.5 feet. 
With each one foot increase in the level of the lake, another 
roughly 10,000 acres is inundated.

    Jeff, if I could, I'd like to turn to the agricultural side 
of this.
    Mr. Frith. Certainly.
    The Chairman. You're right, we've worked very hard, in 
fact, Scott is one of my two lead negotiators on the Farm Bill, 
had this as part of his portfolio, Scott Stoffren who is here, 
getting help for our farmers in the Devils Lake Basin.
    And it was incredibly hard to get those provisions 
included, we had enormous opposition to doing it. And at the 
end of the day we were so pleased to get a program that was 
supposed to help farmers with land that had been inundated.
    Now, it required a 30-year easement. And farmers don't want 
to sign 30-year easements, we understand that. They hope 
against hope that the lake will go down, and that they will get 
this land back sooner than 30 years, so they're reluctant to 
sign a 30-year easement, I understand that.
    There's also a limitation, it can only be on water that's 
up to six and a half feet. And so, what's been happening is 
people don't want to sign a 30-year easement until the water 
gets, you know, to over six and a half feet, and then they 
wish, maybe, they had.
    But that's the problem that we're confronting, and of 
course we dealt with this question of not being able to get the 
payments, not being able to get--because people were concerned 
title would pass to the State--that's all been resolved, thanks 
to the Attorney General here for his help with that.
    So, we've got to go back and try to get some changes made 
to make this more acceptable, more attractive to farmers. What 
I'd like to see is something like a CRP or Wetlands Reserve 
Program, so that farmers could get what would, in essence, be a 
rental payment every year to replace that lost income. Now that 
we have the assurance the State's not going to seek title on 
that land, we're still going to confront this question of, you 
know, length of an easement. Thirty years is just too long, I 
think we see that. We had a hard time getting thirty years, 
they wanted it to be 50 years.
    So, you know, it seems to me, unless we can get it down to 
five or 10 years, we're probably not going to get a lot of 
takers.
    Can I just see a show of hands, those who are farmers, 
here, would a five or a 10-year thing be attractive? A five or 
a 10-year rental?
    OK, five would be certainly more attractive than ten, I 
understand that.
    [Show of hands.]
    The Chairman. But the people--I can see by the show of 
hands, that's much more attractive to people than 30 year.
    All right, any other ideas, Jeff, that you can share with 
us on that part of it?
    Mr. Frith. Well, Senator, we have a--our Sweetwater-
Morrison contract expired and we re-negotiated that. Initially, 
that was a 5-year contract and I had to lower that to a 3-year 
contract to get the landowners to agree to that.
    The Chairman. You did?
    Mr. Frith. So, a 30-year--you're absolutely right--will not 
work. And the idea of an annual payment works out very nice. 
When you put pencil to paper, that 30-year easement and the 
one-time payment come out to, in some cases, less than $20 an 
acre, you know, per year. So----
    The Chairman. Where would we have to be, do you think, to 
attract signup?
    Mr. Frith. I think you really need to stay in that cash 
rent value category.
    The Chairman. And what's cash rent now, here?
    Mr. Frith. Oh boy, I don't know, I'm getting 55 bucks an 
acre for the stuff that I have, so, you know, I think----
    The Chairman. Would $40, could we get people on $40?
    Audience Member. Forty, Senator, is kind of a low average 
right now.
    The Chairman. Low--below average.
    Mr. Frith. Yep.
    The Chairman. Odell, what would you think? How much would 
we have to--what would it have to be at to attract a signup?
    Audience Member. Well, right now, on the cash ranch has 
been going up, there's more cash value in that. Forty dollars 
is pretty low. A lot of it now is 50, 55 and in the valley it's 
a lot higher.
    The Chairman. Here's the deal that we've got to understand 
is, you know, this land's under water. So, it has no productive 
value. And, the question is, between getting nothing, and 
getting something, and something that makes a difference to 
people's lives.
    I'll tell you, I've seen just heartbreaking situations here 
in the Devils Lake Basin. People I have known for 30 years, 
honest as the day is long, and they've lost most of the 
productive value of their land, and they have nothing. You 
know, that just can't be.
    So, try as we might, we had a hard time getting this 30-
year deal in.
    Mr. Frith. Yep.
    The Chairman. But, I think, we have to demonstrate that 
that's not working in order to get people to accept something 
different.
    Any other? Yeah, Joe?
    Mr. Belford. Senator, we still have to maintain and get 
this lake elevation down, because even with easements on the 
land, people, nothing can be farmed there. So, we have to get 
the water down to where it's manageable so that people have the 
land to stay here and farm it. And the same way with these 
small communities--that's their lifeblood. And we've got to put 
a process in place.
    The Chairman. Yeah.
    All right, let me just say we're about at the end of our 
time, here, but I wanted to give the Governor a chance for any 
last-minute observations after he's had a chance--first of all, 
I want to thank him very, very much for being here today and 
thank him very, very much for sitting through all of this. And 
I'd welcome any observations he has before we close the 
hearing.
    Governor Hoeven. Thank you, Senator.
    Really, I don't have any additional comments. I think, you 
know, the testimony that we've heard bears out the comments 
that I made in an overview fashion on the front end. So, again, 
while we need to work together--State, Federal, local--I want 
to thank all of the--everyone who's here today. Certainly, 
local officials, Mayor McQuoid, Mayor Johnson, our legislators 
that are here, City Commissioners, County Commissioners, you 
know, you've just got the whole gamut--Arnie Berg who is on the 
Water Commission, Senator Heckaman, Senator Dave Elkie, 
Representative Vigg, Kurt Hofstead, Representative Hofstead. 
You know, really, we've all--it's got to be a team effort, 
here, and we certainly need the cooperation of the Corps and 
the EPA to move more water out. And, I think that's been made 
very clear in the testimony.
    And then the communication effort. I thank you all--again, 
thank you for all you're doing and your perseverance. Your 
efforts to continue to communicate--not only throughout the 
Basin, but with people downstream. And this is something we 
have to work on together for the greater good, both within the 
lake region, and downstream. You know, that's the only way 
we're going to make this work for all of us--for all of us. And 
when I say that, I mean, in North Dakota, but I also mean for 
Minnesota and Canada, as well.
    And that's what we're trying to do, you know, if you look 
at NAWS, the Northwest Area Water System, we've been tied up in 
litigation since 2002, is that right, Todd?
    Mr. Sando. Yep.
    Governor Hoeven. I mean, we are working to do that right, 
and well, and take care of people, just like we're working to 
address the issues here in Devils Lake. And we have been tied 
up in a Federal Circuit Court in Washington, DC since 2002.
    The Chairman. And that's a--if I can interject--that's 
after we agreed to the best treatment that was available at the 
time we built the system. We went to the best--I will never 
forget the phone call, we had a conference call with all of us, 
the delegation, the Governor, on what kind of treatment 
facility we were going to have, and we opted for the very best 
that was available at the time, to do everything we could to 
avert lawsuits. And I just--I don't want to predict what others 
might do, but we've got to be mindful of people who are willing 
to go to court at the drop of a hat. And our Canadian neighbors 
have done that in other instances, and have hung us up, now, 
for 8 years.
    Governor Hoeven. Right. And that's why it's so important, 
again, we all work together, and keep moving this forward. And, 
you know, that's absolutely what we're working to do and, 
again, appreciate being here, Senator, and thank you very much, 
both on behalf of myself, as well as Francis and the Department 
of Transportation and also Todd Sando with our Water 
Commission.
    And, again, to all of you who have been working on this 
very hard for a long time, thanks for being here today. Thanks 
for your ongoing efforts and again, as we go forward, let's 
keep making sure that we're communicating, both throughout the 
Basin and downstream so we can keep this going.
    Thanks.
    The Chairman. Thank you, again, Governor. Thank you for 
your whole team. Thanks for Francis Ziegler, thank you for 
Todd, thank you for everybody that testified here today. Thanks 
to each member of this panel. I think you've made very valuable 
contribution to this effort. And I think we've laid out a 
record that's about as clear as it can be in this hearing this 
afternoon.
    Thank you very much. The hearing will stand adjourned.
    [Whereupon, at 3:46 p.m., the hearing was adjourned.]


 FIELD HEARING: TRANSPORTATION INVESTMENTS: PROMOTING ECONOMIC GROWTH 
                ALONG THE U.S. 52 AND U.S. 281 CORRIDORS

                              ----------                              


                          FRIDAY, JULY 9, 2010


                                       U.S. Senate,
                                    Committee on the Budget
                                           Carrington, North Dakota

    The committee met, pursuant to notice, at 9 a.m. in the 
Teepee Room of the Chieftain Conference Center, 60 4th Avenue 
South, Carrington, North Dakota, Hon. Kent Conrad, chairman of 
the committee, presiding.
    Present: Senator Conrad.

              OPENING STATEMENT OF SENATOR CONRAD

    The Chairman. The hearing will come to order. I want to 
welcome everyone to this hearing of the Senate Budget 
Committee. This is an official hearing of the committee, and as 
a result we will be operating under the rules of the U.S. 
Senate, and an official record of this hearing is being kept.
    The title of this hearing is, ``Transportation Investments: 
Promoting Economic Growth Along U.S. 52 and U.S. 281 
Corridors.'' As the title suggests, we'll be focusing on what 
investments may be needed to upgrade and improve Highways 52 
and 281, to promote the economy and agriculture in Central 
North Dakota. But I also want to focus on how to make our roads 
safer. I am concerned about the safety of local residents and 
want to make certain that we have done everything we can to 
establish the record, as the new transportation bill is 
written, to justify additional expenditures on this corridor. 
We held a similar hearing on Highway 52 in Jamestown last year, 
and it was very helpful and informative, and I think helped 
establish a strong record that we can take to our colleagues 
when the next transportation bill is written.
    I want to begin by welcoming Mr. Pomeroy. I'm delighted 
that he is here. Of course he serves on the all important Ways 
and Means Committee that will have a lot to say about the 
funding of a new transportation bill. We have a series of 
distinguished witnesses with us today. We have two panels. Our 
first group includes our the North Dakota Transportation 
Director, Mr. Francis Ziegler. Thank you, Francis, very much 
for being with us again today. Carrington Mayor, Don Frye, good 
to have you with us Don. I can't help but notice as we've gone 
around Carrington--I had the chance to stay here last night--
how impressed I am with what's been happening in Carrington. I 
mean it really looks good and you can feel that this community 
is on the move. Our additional witnesses includes the Fessenden 
and Coop Association General Manager Mark Hovland, good to have 
you here Mark, Towner County Economic Development Board of 
Directors member J.R. Gibbens, good to see you. Thank you for 
being here. And Dave Irmen from the North American Bison 
Cooperative. I look forward to hearing from all of you 
momentarily.
    Just a couple of charts to kind of lay the background. 
Highways 52 and 281 provide critical connections to Canada and 
I-94. They are vital trucking routes for agricultural and 
manufacturing industries, which are important to economic 
growth and job creation the State of North Dakota. Sixty-nine 
percent of the goods shipped annually from North Dakota are 
carried by truck, and in the next 10 years commercial trucking 
in North Dakota is expected to increase by 42 percent.

[GRAPHIC] [TIFF OMITTED] T8154.392


    The next slide shows the dramatic spike in truck traffic on 
Highways 52 and 281. Truck traffic on Highway 52 near 
Carrington has increased 53 percent from 2002 to 2009.

[GRAPHIC] [TIFF OMITTED] T8154.393

    Similarly, truck traffic on Highway 281 near New Rockford 
has increased by 60 percent, a very dramatic increase there.

[GRAPHIC] [TIFF OMITTED] T8154.394


    The agriculture industry in particular has relied on the 
State's road network to move products and services. Significant 
and growing agriculture businesses in this region rely heavily 
on Highways 52 and 281 to receive raw goods and transport their 
finished products to market. The continued growth of these 
value added businesses in dependent on a transportation system 
that is both efficient and reliable. And our ability to attract 
new companies and new businesses is dependent on the quality of 
our transportation system. Unfortunately Highways 52 and 281, 
like many of our nation's highways are deteriorating. Heavy 
truckloads have put added strains on these highways, and they 
need repairs to foster continued growth to ensure safe travel 
and to better serve the surrounding communities.
    Improvements to Highways 52 and 281 will pay dividends for 
agriculture in the region. They'll enhance the transportation 
of crops and livestock, they'll increase opportunities with 
enhanced access to Canada, and they will help further diversify 
North Dakota's agricultural economy by attracting more value 
added agricultural businesses to the region. Now is an 
important time to focus on our transportation infrastructure 
needs, because the administration is in the process of 
developing its highway bill reauthorization plan. And they're 
not alone, Congress is also moving on a new transportation 
bill.

[GRAPHIC] [TIFF OMITTED] T8154.395


    I think it's worth recalling how much we benefited from the 
last bill. As a conferee on the last transportation bill, that 
is I was selected to represent the Senate in negotiations with 
the House to work out the differences between the two bills. I 
was able to secure significant added investment for North 
Dakota, a 31 percent increase in our funding to $1.5 billion. 
That works out to about $234 million a year with additional 
funding provided for transit programs. And of course, in the 
Stimulus Bill, we got about $180 million for North Dakota for 
transportation as well. That's over and above what was provided 
in the Highway Bill.

[GRAPHIC] [TIFF OMITTED] T8154.396


    We did very well by securing about $2 for every dollar in 
gas tax money collected in the State, ranking us among the top 
four States in the Nation for return on our gas tax dollars, 
that is we're in the first four States out of the 50 in terms 
of the amount of money we get back for the amount of money we 
send.
    I also worked to direct investments to Highway 52, 
including the Jamestown bypass and other high priority projects 
in the previous highway bills. And let me say, our delegation 
works very closely with the State and Director Ziegler and 
Governor Hoeven's administration to establish the priorities. 
We don't cook up our own list of priorities. The State has a 
rigorous process that they go through to determine the 
priorities for the expenditure of highway funds, and we go by 
that process of determining the priorities. And I think that's 
an important discipline to impose.
    Here are some of the priorities I'll focus on as we 
consider the next highway bill. We've got to have sufficient 
funding so that infrastructure investments are secure and 
robust over the long term. States and communities must be able 
to rely on that funding actually being forthcoming. And any new 
highway bill must maintain recognition that rural 
transportation needs are vital to the nation. When our 
colleagues see that we are getting $2 for every dollar we send 
in, they're quick to say, ``That's not fair.'' I think it's 
very important for us to indicate it is entirely fair if we're 
going to have a national transportation system. That system is 
only as strong as its weakest link, and we have a vast State 
and we are sparsely populated. If we are only to rely on our 
own resources within this State, our highway network would soon 
crumble and fail.

[GRAPHIC] [TIFF OMITTED] T8154.397


    I am particularly interested in hearing from our witnesses 
on the immediate investments that are needed on Highways 52 and 
281, and what future investments are needed to support the 
growth in this community and in this area going forward.
    With that we'll turn to Congressman Pomeroy for his initial 
observations. And I also want to indicate that Lance Gabbey, 
the Governor's Vice Chief of Staff is here with us. Lance, 
thank you so much for being here, thanks to the Governor as 
well for assigning you to be here, as well as the other members 
of the Governor's administration, especially Francis Ziegler, 
who will testify momentarily.
    The Chairman. Congressman Pomeroy, welcome.

  STATEMENT OF HON. EARL POMEROY, U.S. CONGRESSMAN FROM NORTH 
                             DAKOTA

    Mr. Pomeroy. Mr. Chairman, thank you and thank you for 
allowing me to participate in the hearing, making it bicameral 
event. I would start by saying, when it comes to road 
infrastructure in North Dakota, this has entirely been a 
bipartisan matter. We have, as you indicated in your opening 
statement, the Highway Department or now the Department of 
Transportation has given us by way of roads priorities, that's 
what we move forward. You'll see very different strategies play 
out across the States. Basically the official recommendations 
often mean very little as legislators pave favorite routes, 
take care of perfect--different constituencies, or even seek 
named arteries in various areas, not to name names, but the Bud 
Schuster Highway in Pennsylvania comes to mind. We don't do it 
like that here. What we need, we try to get the funding in 
place.
    Now, Senator Conrad is developing an official record, which 
means that these projects would be eligible for funding as the 
legislative process moves forward. In addition to that, with 
his prior experience as a conferee--the group that meets, 
representing the Senate with Representative of the House to try 
and iron out differences--his prior experience as a conferee, 
we have some reason to hope that he would be a future conferee 
as well, and nothing could be more important to North Dakota's 
fate in the highway bill than having him at that critical table 
at that critical period of time.
    House bills tend to be urban oriented, a lot more interest 
in transit systems than farm to market roads, as you might 
expect given the fact that population is allocated where the 
people live, they live in the cities, it's a different focus. 
The U.S. Senate, two votes per State, provides the balance and 
brings into ply then the considerations of rural roads. We're 
going to hear this morning from the panel about the critical 
interstate and national interests of such things as farm to 
market roads or energy roads. This is the third hearing that 
Senator Conrad has held, one in Watford City, one in New Town, 
obviously focused on energy impacted areas.
    But it's not as though things have not changed and evolved 
in the heart of the rural ag areas as well, and that's why I'm 
so pleased we're in Carrington this morning to focus on 52 and 
281, in light of changing circumstances relative to the 
utilization of these roads principally driven by agriculture.
    I had a pre-hearing briefing from very credible sources up 
at the truck stop, around the coffee table. But here we had 
three lifers in the area, farmers, one fella says he lives 
seven miles from town, he routinely counts the cars as he 
drives home. He frequently gets over 30 running seven miles 
north up on 52. He'd never seen traffic like that before. 
Another man said he live here all his life, never seen this 
kind of traffic, and most notably truck traffic beyond what 
he's seen before. Changing the circumstances, increasing the 
dangers, means we need to focus on this, something is happening 
here. You'd like to think sometimes that, well, by golly, in a 
changing world, at least your infrastructure ought to stay the 
same. That doesn't work either because things change within the 
State, energy, agriculture, always paying attention to what's 
evolving and moving within the State so that we can keep our 
infrastructure adequate to deal with the commercial 
opportunities developing in North Dakota.
    So, I'm very pleased to be part of this hearing, Senator 
Conrad, and will be listening with great interest to our 
witnesses. Thank you.
    The Chairman. Thank you, and again, thank you so much for 
being here Congressman Pomeroy.
    Before we begin, I'd like to observe just a moment of 
silence in memory of Keenan Cooper, a young soldier from North 
Dakota who just lost his life on Monday in Afghanistan. At 10 
o'clock I'm going to be leaving, stepping out for a moment to 
speak to the parents, and out of respect, I'd hope we'd just 
observe a moment of silence before we hear from the witnesses.
    [Moment of silence.]
    The Chairman. Thank you, and again, at 10 o'clock I think 
we'll take just a brief recess so that Congressman Pomeroy and 
I can talk to the--to the parents.
    With that, welcome Francis. I appreciate very, very much 
your participation here today, and why don't you proceed and 
then we'll go to the rest of the panel. I think we'll do all 
five in a row, and then we'll open it up to questions.

STATEMENT OF FRANCIS ZIEGLER, DIRECTOR, NORTH DAKOTA DEPARTMENT 
                       OF TRANSPORTATION

    Mr. Ziegler. Mr. Chairman, good morning, I'm Francis 
Ziegler, Director of the North Dakota Department of 
Transportation. I want to thank you again for the opportunity 
to come before the Committee today and thanks for your interest 
in improving transportation in North Dakota, and thank you, 
Congressman Pomeroy for being here also.
    I'm going to talk about some specifics of the Highway 52 
and 281 corridors, and then about some general transportation 
issues that we may have--that we do have. And I will ad lib the 
latter part of my testimony, Senator, Mr. Chairman, in the 
interest of time. I believe we got the record established and 
we have handed out the document that I will be speaking from 
this morning. I think you have copies of that before you, and 
there are copies for the audience also.
    But transportation is vitally important to our states' 
economic growth and is critical to many freight movements, 
connecting manufactures to retailers, farms to markets, and 
shippers to railroads, airports, and seaports. Transportation 
infrastructure plays a key role in supporting the growing needs 
of business, industry, and the traveling public. The US 52 and 
281 corridors are important in serving these needs in the 
northwest and central part of the State. These corridors also 
play an essential role is supporting international trade with 
the Canadian provinces of Saskatchewan and Manitoba. These two 
provinces have the fastest growing economies in Canada.
    Specifically, on Highway 52, The DOT has recognized the 
importance of 52 Corridor, the 252 miles of it running from 
Jamestown northwest to the Canadian border. From 1994 to 2009, 
we put $147 million into preserving and improving that 
corridor. Some of the major improvements were truck climbing 
and turning lanes, reconstruction overlays between Minot to the 
Canadian border. That was to improve safety and load carrying 
capacity. In the late 90's there were major improvements from 
Fessenden to Carrington in load carrying capacity. With these 
improvements the entire corridor is 105,500 pound capable year 
round without having any load restrictions. And as we've heard 
at prior hearings, load restrictions are a big issue for 
movements in the spring.
    In the late 90's, we also four-laned, just out of Minot to 
the southeast, and the legislative assembly by House Bill 1166, 
has indicated that they'd prefer that we would four-lane from 
Minot, continuing on all the way to Velva when that job comes 
up for reconstruction. And so, if we can get the environmental 
clearances done on that, that's what we'll be doing.
    In 2002, a truck bypass went around Jamestown to help 
improve that traffic flow, and safety, as you indicated. Mr. 
Chairman, safety is paramount to you and certainly to us and to 
our customers.
    There are about $28 million worth of projects scheduled on 
52 for the years 2010 to 2014. I have an attachment, it's 
attached to your testimony, and it shows all the projects that 
we're going to be doing. And after we get all that finished, 
hopefully the corridor will be in great shape. But one thing 
about roads, we drove Highway 52 and 281 south this morning, 
and we need some work and we're going to be doing that in 2012. 
That's how it's been scheduled now and our district engineers 
are here, Wade Swenson from the Devil's Lake district, and John 
Thompson from the Valley City district, are here, along with 
Lance and we made that tour this morning just to take a look at 
what we've got for infrastructure here and some of the concerns 
we've got.
    So, we're always looking at what needs to be happening. But 
as you can see in my testimony there, traffic volumes are high 
here. The largest truck volumes, ranging from 650 to just over 
700 vehicles per day, are between Jamestown and Carrington. 
Those are significant numbers, and that's pretty much ag 
movement and movement out of--the finished products that we 
produce here in the State of North Dakota. And so we're 
constantly looking at what it is we need to do.
    On the 281 corridor, we also recognize that important 
corridor, running from the Canadian border to South Dakota. In 
the last 15 years, $138 million was devoted to preserving and 
improving the corridor. We've regraded and widened from 
Jamestown to the South Dakota border, making that 105,500 pound 
year round load carrying capacity.
    The urban section of I-94 through Jamestown, replacement of 
overhead rail structures in Carrington and New Rockford, and 
realignment of 281 west of Minnewaukan to avoid the rising 
water of Devils Lake. And then, as you probably drove--
obviously drove the main street here in Carrington, the 
department helped the city, we're really appreciative of the 
partnership that we've developed on that. It was a North Dakota 
street project, and that was finished just last year and 
there's still some work left to do on it, but it's a nice piece 
of work and it's a nice street.
    The Chairman. I'd just say that it is very impressive. I 
mean, I really--it really catches your attention as a 
substantial improvement.
    Mr. Ziegler. Thank you.
    In addition, there are about $36 million worth of projects 
scheduled for 281 for the years 2010 to 2014. Again, on 
attachment 1, we show what we're going to be doing and that's 
where we show the major work that's going to happen south of 
Carrington also.
    Traffic volume on 281, and that corridor is distinguished 
from 52 a little bit because it's--while it's a common 
corridor, we consider that north of Jamestown--north of 
Carrington only. But the annual traffic is about 1,465 vehicles 
per day. The average daily truck traffic is 290 vehicles, with 
the largest volume, about 400 vehicles per day, just south of 
Jamestown. And so, that was reflected in your charts also, 
Senator.
    Total traffic volume on US 281 from Carrington to the 
Canadian border ranges from 360 vehicles per day just south of 
the Canada to just over 6,000 vehicles a day near Belcourt. The 
average daily traffic volume is about 1,465 vehicles per day. 
And with 160 vehicles to 345 trucks per day, so, you know, as 
we give you these numbers, Senator, one thing that happens to 
us, close to the urban areas, we find the numbers to be higher 
and we'll share those with you. But that's why we also give you 
averages so you get a feel for what the entire corridor is 
carrying. And, so the traffic volumes can change somewhat, as 
we talk about it, but they only change of what we see in those 
urban areas, as being more significant traffic, it's that loop 
of traffic does business with the major communities.
    The Chairman. Can I just stop you there and ask you to 
remind me--I've asked you in a previous hearing. What are the 
rules of thumb for four-laning? What kind of traffic counts? 
And I know that it's not rigid, but the basic rule of thumb.
    Mr. Ziegler. The basic rule of thumb in some of the 
neighboring States, South Dakota is at 6,000 vehicles per day, 
and Minnesota is at 12,000 vehicles per day. Our national 
association, ASHTO, has come out with new guidelines that talk 
about, in the 6,000 to 12,000 vehicles a day, that you would 
super-2, they're getting onboard with the super-2 concepts. And 
then over 12,000 vehicles a day to seriously consider four-
laning. The rules are never totally cut and dried. It depends 
on the mix of truck traffic with car traffic and so on. And it 
depends on how steady that traffic is throughout the day rather 
than having heavy movements of traffic early in the morning, to 
get back and forth from business and employment, and in the 
evening again. But fundamentally, those are the criteria.
    The Chairman. What would we have on 94, for example?
    Mr. Ziegler. On 94 it varies considerably. If you start out 
on the east end of 94, we have up to 80,000 vehicles a day 
crossing the Red River Bridge. And that varies a little bit 
during the winter months. Last winter I saw a number about 
70,000 vehicles a day. So, it also depends on--a lot of 
students go back and forth to Morehead State from Fargo, and so 
there's some variability there.
    But I'll just say 70 to 80,000 on that piece of 94, and 
that goes all the way over to 45th and 25th and I-29. And then 
as we go farther east it drops off to about 40,000, and then it 
drops off to about 25,000 between West Fargo and Castleton. 
But, on an average, I-94 carries about 20,000 vehicles a day, 
is what we would call an average.
    But we look at those segments. As you know, there is six-
laning being done again, we're adding to that all the way from 
45th Street to Red River now, because there is so much traffic 
in that area now. I-29 carries 40,000 vehicles a day north for 
about 20 miles north of Fargo. And, then from there it drops to 
about 10 to 15,000 vehicles a day. So the interstate carries 
significant traffic and it has more truck traffic. In my 
testimony later on, I'll be talking about the fact that North 
Dakota is a bridge State, 59 percent of the traffic doesn't 
originate here or have a destination here. And so what happens 
is, cross-country trucking is done on the interstates. 
Typically they have, you know, less access, so they don't have 
to worry about vehicles coming on from approaches, so to speak. 
And they're just quicker to move across the country on the 
interstate, so that's where the heavy truck movement is 
focused.
    The Chairman. OK.
    Mr. Ziegler. You know, it's essential to preserve and 
improve our transportation system to ensure it meets the 
present and future demands, and it's a continuous thing. A 
reporter asked me not too long ago, ``Why is it that we have so 
much road construction during the summer months?'' And I said, 
``Well, the math is easy. We have 8,500 miles, 8,511 miles to 
be exact, in the State of North Dakota that the DOT cares 
for.'' And if we design, which we do, a 20-year life on the 
pavements, doing the math, we need to reconstruct 420 miles a 
year. And we all know that a road doesn't last the full 20 
years of design life. We have to do seal coating, crack 
sealing, and those kinds of things because Mother Nature has 
a--is hard on the system here in North Dakota. So, we are in 
there working on those in the 20 year period. But, I shared to 
him, I said, ``You know, that would be from Bismarck to 
Minneapolis.'' Every year we have to do that many miles of 
road, and that's to keep it up, that's basically to keep up 
that life cycle of the pavement.
    The interstates are now being designed to a 30 year life, 
and so even with that, every 10, 15 years, we have to go in and 
do some, what we call, concrete pavement repair, to make sure 
that it's kept up, and we do use Federal aid for that. We don't 
use Federal aid for crack pouring, but we do use Federal aid 
for the major concrete repair work on the interstates.
    North Dakota, like I said, is working hard to improve 
transportation. We just recently did a regional study with the 
Upper Great Plains Transportation Institute, and what we got 
out of that is that the residents want more transportation 
infrastructure across our State, and I think you shared that 
traffic counts are up, and they're significant. In the western 
part of the State, we're seeing, you know, you can look at 
specific corridors, like we did yesterday, up 600, 700 percent 
increases since 2006. But on the average, we're seeing 30 
percent per year increase in the western part of the State. 
Here in the eastern part of the State we're seeing 10 percent 
increases, which is significant on an annual basis. And 
obviously, on the western part where we now have the oil boom, 
one would expect that to happen with all the trucks that are 
needed for the oil wells.
    But residents are concerned about traffic increases, 
especially, like I said, in the western part of the State, and 
public expectations are growing for load carrying capacity and 
wider roads. As we--as we put more pavements, preventive 
maintenance onto our system, our roads get narrower, and we're 
getting very worried about that. The fact is that we're--we 
need to get out there to regrade and widen a lot of our roads.
    But recognizing all of that, the State of North Dakota 
increased its financial commitment to transportation by 
enacting $1.35 billion transportation funding bill in the last 
legislative session. And that includes an unprecedented sum of 
non-matching State general fund dollars, but it includes almost 
$600 million more to rebuild our roads and help cities, 
counties, and townships recover from the Statewide flooding. 
And this year, we have the largest construction program in the 
history of the department. We're putting $450 million into 
projects of about 2,000 miles that we're touching. The program 
that we're using is regular Federal aid, we're using the second 
year of the American Recovery Act, the ARRA, and then we're 
using emergency relief in the Devils Lake area, and State 
funding to do all that work. And so, it's a tremendous 
workload.
    While the DOT--the State of North Dakota is doing more than 
ever, Federal investment is critically important. Federal aid 
accounts for 52 percent of our current transportation budget, 
and if you count the ARRA in there, it's 57 percent. So, 
Federal dollars are important and certainly appreciate anything 
that you can do to help us in keeping the Federal dollars 
coming to North Dakota, because obviously our infrastructure 
needs that.
    Our road network has few people to support it. North 
Dakotans pay more than the national average to support the 
Federal aid system. The per capita contribution in North Dakota 
is $161 compared to the national average of $109 per person, 
and that is the gas tax that they pay. Federal investment in 
transportation is, not just for North Dakota, but it's in the 
national interest, because I said before, we're a bridge State 
and a lot of people travel across our State.
    I've said before, the benefits to the infrastructure are 
important, and you mentioned safety this morning, and I need to 
talk about that. As the Director of the department, I have the 
Statewide responsibilities, we've talked about that before. And 
from a safety perspective, I take that almost some days too 
personal. We look at every fatality, we analyze every fatality, 
we take a look at the police reports to know what's happening 
and to see if there's anything that we can do in the system 
that would improve it. Our customers are going to see rumble 
stripes on every mile of road, every two-lane mile of road in 
the next 4 years. That's part of our game plan to provide 
better safety. We're seeing a log of distracted drivers and 
they're leaving the lanes, and they're getting off on the 
shoulder of the road. And we have--40 percent of our fatalities 
in the last 3 years were single vehicle rollovers where people 
were ejected.
    So we believe that if--No. 1, if they were wearing their 
seatbelts, the automobile manufacturers have done their job, 
the cab is solid. But people are coming out of that vehicle as 
it's rolling. But, what we want to do is keep the driver on the 
road, in their lane, by having rumble stripes on the center 
line and on the shoulder. So that's our safety program for now, 
but at the same time, we need to continue to look at whether--
what other safety aspects we can take or safety initiatives we 
can take to make it safer. But, we have improved in--I don't 
want to jinx anything here, but last year at this time, on July 
1st, we had 62 fatalities. This year we were at 40. So a 
significant improvement this year. And, this rumble stripe----
    The Chairman. Can I just say, you know, all of us have a 
responsibility, but drivers have a responsibility too. The 
other day I was driving and we were in a city, and I looked 
into the car that was next to us. We were both driving, I 
wasn't stopped, and the woman was texting as she drove. I mean, 
not just on a phone, she was texting, I couldn't believe it. I 
don't know how you can drive in traffic in a city, be driving 
at all and be texting. So, you know, people have part of the 
responsibility here. And this distractive driver syndrome, it 
really is increasing. I mean, people are talking on the phone, 
you know, I plead guilty, I've done it. But, this texting, that 
really takes your breath away.
    Mr. Ziegler. You're correct, Mr. Chairman. In fact, an 
anecdotal story--Lance is here today. He and I were visiting 
about exactly the same thing. It was last winter and he said, 
``Francis,'' he lives in North Bismarck like I do, and on his 
way to work driving down Washington Street, there was a person 
beside that he passed that was reading the paper on her way to 
work. So, you're right, there's something--the driver does have 
responsibilities, but what we're trying to do--I use a line a 
work, don't point the finger because three point back. And so 
what is it that we as engineers and transportation officials 
can do to make things safer, and that's what our job is. And 
hopefully the drivers will heed their responsibilities.
    Talk a little bit--I know, I'll try to condense the rest of 
it, Mr. Chairman. But, our association recognizes the fact that 
transportation is important to all of America. And on page 
four, in the middle of the page there, we talk about what our 
association has talked about for funding that we believe is 
needed for the next highway bill, it's $375 billion for the 
next 6 years, that's for highways and bridges, and the $93 
billion for transit. And so, we know those are big numbers. But 
at the same time, we also need to recognize that inflation has 
eaten away at the dollars that we do have.
    And it's in my attachment, that in 2001, what a dollar 
bought in road transportation and road building now costs $1.87 
in 2010. So it's gone up 87 percent in those 9 years. That's a 
significant inflationary increase, and typically that's because 
of the fact that we use a lot of diesel in road building, but 
the asphalt cements, the--to make the blacktop, that's--that 
has gone up at least 100 and in some cases to 200 percent. It 
went in the neighborhood of $300 per ton, it is now $600 and 
$700 per ton. So it's a significant increase in cost. And so, 
our purchasing power has decreased, and that's why we're so 
concerned about the future of the highway bill.
    And we also ask that, you know, North Dakota as a rural 
State, proportionally be able to get some of the proportional 
increases that there might be. I know that there's a bill out 
there now through the House, as Congressman Pomeroy talked 
about, that is more population oriented. And in regard to that, 
I'm very pleased that the bipartisan rural mobility legislation 
in 3485 was recently introduced in the U.S. Senate by Senator 
Barrasso, you Mr. Chairman, and 11 other Senators. The 
legislation basically takes the position that if new 
legislation is to dedicate significant funds to discretionary 
highway programs only for large metropolitan areas, that the 
legislation must also include a significant counterpart program 
of funding for rural States, and we really do appreciate that. 
And those of us in rural States all appreciate that and we've 
talked about that. We do work very closely with South Dakota, 
Montana, Wyoming and Idaho as a group to work on rural issues. 
And so, we've noted that and are appreciative of it.
    What I'd like to do now is go out to page six and talk a 
little bit about essential service to agriculture of natural 
resources. Ag is the one sector of the economy where the United 
States is consistently run an international trade surplus and 
not a deficit. Over the last two decades about 30 percent of 
the U.S. ag crops were exported. We think in this--certainly in 
this part of the State, that's an important notation that the 
ag part of the State is doing its part to help us with the 
balance of trade. And so, it's important we recognize that in 
our movement of goods and services on our transportation 
system.
    Moving on to page seven. We're also, in North Dakota, a 
major contributor of energy production, whether it's oil 
production, ethanol production, and our coal. Good roads 
throughout the State are important to the Nation becoming 
energy independent, and we all know we need to do that.
    Going down to the bottom of page seven, rural States face 
serious obstacles. We're large, we're rural, and we have low 
populations. But I want to share with you on the bottom of page 
seven just what it does take to keep maintaining these roads, 
and this is just for our maintenance. I call this the orange 
truck cost. It takes about $9,200 per mile per year to maintain 
our system. And using the current CAF standards, the Corporate 
Average Fuel Economy, it takes 2,700 vehicles a day using North 
Dakota's gas tax income to pay for just the maintenance, which 
is sanding, salting, sealing the cracks, doing the patching, 
and so on. It seems like a big number, but we've compared that 
to what counties have and we're very close to what--I worked 
with Mercer County on the road between Beulah and that 
gasification plant, and that's--that's what they're saying, 
same types of numbers. So, we're very close on that, so it's 
very pricey to maintain the system.
    Moving on to the top of page eight, it takes three, 4 years 
in North Dakota to complete a project that requires full 
environmental process. So, in the new bill, I guess we're just 
asking that we don't make it any more complicated. We believe 
that our environmental process now is very protective of the 
environment and streamlining should be considered. The new 
highway administrator, Victor Mendez, who was director of 
Arizona, has a new initiative, Every Day Counts. And we have 
people on our staff working with him and his staff to take a 
look at what it is that we can do to shorten timeframes 
building projects. And, we're very appreciative of what Victor 
is doing, and hopefully we'll come to--when the bill starts 
being written out, that we'll have some good input in that 
area.
    Going to the bottom of page eight, we're hoping that--and 
we recognize the difficulty in coming up with a new highway 
bill, but we're certainly hoping that we get a highway bill 
soon. And if we can't get one soon, that if we have any 
continued resolutions or extensions, that they be at least a 
year and hopefully 18 months, because we need to continue to 
plan. If we're going to continue to make improvements in our 
system, we have to plan in order to get out ahead of it. It 
takes at least a year for a pretty simple project, to get it 
developed and engineered. But for any complicated project, such 
as, let's say four-laning, that's a four, 5 year process from 
an environmental perspective, a design perspective, and all the 
public input that we ask for. So it takes a long time, so every 
day does count, and it's important that we--we be able to plan 
ahead, and that's the point of having a longer continued 
resolution where we know where we stand financially.
    I just want to say, in conclusion, Mr. Chairman, Senator, 
and Congressman Pomeroy, transportation is a good buy, it's a 
good buy. After the last session, my wife and I were talking 
about how much do we pay for gas tax, and we didn't know, so we 
did the math. And we pay about $500 a year with the amount of 
driving we do, the mileage we get. And my wife said to me, she 
said that's kind of high. And I said, really, I just paid the 
cell phone bill, that was $82 this month. So we did some 
averages. The average person pays about $500 a year in a cell 
phone bill, but the average person in America only pays $109 
for transportation.
    The Chairman. That's an incredibly good deal.
    Mr. Ziegler. I may be biased--I may be biased to 
transportation, but I think I get a whole lot more out of my 
roads than I do out of my cell phone.
    But in conclusion again, I appreciate the opportunity to 
come before you, to talk to you about transportation, and thank 
you for what you've done.
    And that concludes my testimony, Mr. Chairman.
    [The prepared statement of Mr. Ziegler follows:]

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    The Chairman. Thank you so much. Thanks for being here.
    And we'll go now to Mayor Frye and then we'll go to each of 
the other witnesses in turn and then we'll open it up for 
questions of the whole panel by both Congressman Pomeroy and 
myself.
    Welcome, Mayor, and congratulations on your recent 
election.
    Mr. Frye. Thank you.
    The Chairman. It's very rare for anybody to win a write-in 
election. It almost never happens, especially a write-in that 
was mounted just 2 weeks before the election itself. So, 
congratulations on that score, but more important, 
congratulations on what I see being done in this town under 
your leadership, because it's very exciting.

     STATEMENT OF HON. DON FRYE, MAYOR, CITY OF CARRINGTON

    Mr. Frye. Well, thank you Mr. Chairman, Mr. Pomeroy. Thank 
you for your continued interest in U.S. Highways 52 and 281 
transportation corridors. One of the most important needs of 
rural North Dakota and Carrington is a viable transportation 
infrastructure. The success of Carrington over the past 20 
years is directly related to our ability to move both commodity 
Ag products and finished processed foods and feeds to locations 
all across the U.S. and the World.
    Our continued growth and success is threatened by the slow 
and steady deterioration of U.S. Highways 52 and 281 that serve 
our community. Thousands of vehicles either travel through or 
from Carrington each and every day. The success of two major ag 
related businesses hinge on these transportation arteries, 
Central City Marketing and Processing and Dakota Growers Pasta 
Company. I'd like to also add that just recently a new elevator 
in Rockford has been completed, and the numbers that were shown 
don't indicate what that traffic is going to add to this 
system, because that's going to be a unit railcar loading 
facility, and there will be hundreds of additional semis 
traveling those arteries.
    The Ag community, which is the back bone of Carrington and 
this region, relies on these transportation arteries to move 
product to market. Fair market prices will not be received if 
we are unable to transport these products to markets all across 
the U.S. and the world. It is critical to reach the market 
place in a low-cost and timely manner.
    Presently our community is working on several development 
projects that will continue to grow our important Ag community 
and processing sector. The first project I would like to talk 
about is the Central Dakota Feeds Initiative. This project will 
take co-products, waste by-products from food processors all 
across North Dakota and combine these co-products with selected 
commodity grains. They will then be combined to form a new 
``Super Feed'' product for livestock all across the U. S. and 
the world. We anticipate that this alone could add at least 100 
to 150 semis a day in transportation in and around the city of 
Carrington.
    This new ``super Feed'' will provide a nutritional dense, 
highly palatable feed for livestock. The key component to the 
project has been identified as transportation. If we do not 
have a reliable and safe transportation artery to Carrington 
this project will not be able to bring the raw products to the 
processing facility. Then, transport the finished product to 
the market place. Carrington's Central location to the food 
processing plants in North Dakota is critical to the success of 
the project, but if the transportation system is not up to the 
task, Carrington will not be a cost effective location.
    The second project I would like to talk about is the 
development of an ethanol processing facility using non-edible 
sugar beets as the feed stock for this new renewable fuel. The 
transportation of the raw material, non-edible sugar beets, for 
the processing plant will be done entirely by truck 
transportation. Again, we're probably talking anywhere from 100 
to 150 vehicles traveling to that facility.
    Transportation again is a key factor in the development of 
this project and the future success of the region in creating 
new high paying jobs and market opportunities to the Ag 
producers in the region.
    I have focused on the transportation of these products but 
I would also like to add that safety on these highways is 
equally important. Whether it is the safe travel on the 
highways, providing the passenger vehicles on U.S. 52 and 281 
the ability to pass large vehicles safely or the pooling of 
rain water or moisture retained in the ruts that have developed 
causing very unsafe travel conditions. This is just as 
important of an issue as the moving of goods and services. The 
loss of any life because of poor road surface conditions should 
never be acceptable.
    Thank you for your interest and concern for rural 
transportation issues that are facing all of us as we move 
forward in our efforts to grow Carrington and North Dakota.
    On a personal note, I'd like to add, that related to my 
present job I travel approximately 70,000 miles a year inside 
the city limits and the State limits of North Dakota, never 
leaving the boundaries. And so, I probably have a better 
understanding of the highway system and its shortcomings than 
most people do.
    Thank you, Mr. Chairman.
    [The prepared statement of Mr. Frye follows:]

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    The Chairman. Thank you, Mayor. And that is pretty 
remarkable, 70,000 miles around North Dakota. We probably 
should have you as a consultant to the transportation 
department.
    Next we're going to go to Mark Hovland, the Manager of the 
Fessenden Cooperative Association. Welcome, Mark, thanks so 
much for being here and please go ahead with your testimony.

STATEMENT OF HON. MARK HOVLAND, GENERAL MANAGER, FESSENDEN COOP 
                          ASSOCIATION

    Mr. Hovland. Thank you, Mr. Chairman, for allowing me to 
come. My name is Mark Hovland, I'll just give you a little 
background on our business and the communities we serve. I'm 
the general manager up at Fessenden Co-op, we're headquartered 
at Fessenden which is 38 miles northwest of Carrington on Hwy 
52. We are a grain and agronomy co-op which was established in 
1943 with 43 members, a manager, and one part time employee, 
and handles 22O,O00 bushels of grain in the first year of 
operation. We started out with seven board of directors and we 
still have seven members on our board, not the same ones that 
we did in 1943.
    The Chairman. There's been some turnover?
    Mr. Hovland. Yeah, been a little turnover. We have term 
limits.
    We currently employ 50 full-time people and 10 to 15 part 
time people, depending on the season. And our territory 
includes a radius of about 65 miles of Fessenden. And some of 
the other locations that we serve, we have two facilities in 
Carrington, as Mayor Frye mentioned, we have Central City Grain 
and also Central City Marketing and Processing, which is a bird 
food plant. The other ones are primarily grain and agronomy. We 
have one facility each in New Rockford, Hamberg, Heimdal, and 
Esmond. We handle grain at all of these locations and agronomy 
products at most of them. We currently handle approximately 20 
million bushel a year, 40 percent of that is in spring wheat, 
28 percent is soybeans, 10 percent is corn, and the balance is 
sunflowers, pinto beans, black beans, flax, oats, canola and 
whatever the grower produces we handle.
    Highways 52 and 281 are vital to our member owners for 
allowing them to bring their products to market. We have more 
than 800 active patrons in our Co-op and the majority of them 
rely on these two highways to some degree. We have 
approximately 350 patrons who deliver to our Carrington 
location and require these highways to get here. The Co-op owns 
three semis that transport grain full time. We also have a 
couple others that we use occasionally to transport grain from 
our substations and also direct from the farms, either to 
Fessenden or Carrington to load out. We also have several 
independent truckers that work for us when needed. Most of the 
wheat and the beans are trucked into Fessenden or Carrington 
and loaded on 100 car shuttle trains to various points 
throughout the country.
    We truck corn across the State here to the ethanol plants, 
either Falkirk or occasionally at Richardton. We truck a lot of 
malt barley out of here to the--there's different plants in the 
eastern part of the State. Sunflower production we handle is 
trucked into our Carrington bird food plant which is processed 
and marketed as bird food. We also sell some of that product to 
the local crushers in North Dakota, Enderlin or Fargo. We load 
about 700 trucks per year out of that plant of bird food. At 
Fessenden we have an edible bean processing plant. We do 
primarily pinto beans but we also a few black beans. The 
majority of these are shipped out in bulk hopper cars or 
boxcars, but we do still ship about 100 to 150 trucks a year, 
and the all leave town on highway 52.
    Our agronomy business is about 22 percent of our annual 
sales, and most of that, fertilizer and chemical come in by 
truck and leave by truck. So again, much of this product comes 
from the east therefore traveling Highways 52 and 281.
    These two highways are very important to all of us. Even 
those who are unaware of these roads are dependent on them. 
And, if these people eat bread, pasta, beans, drink beer, use 
soy products, ethanol based fuel, or feed the birds, chances 
are some of that product originated in central North Dakota and 
travelled down the U.S. Highway 52 to 281 corridors to the 
processing destination.
    So in conclusion, Mr. Chairman, I urge this committee to 
consider the maintenance of these highways a priority. I think 
the future of our businesses and communities are dependent on 
good roads leading up to them.
    And I thank you for the opportunity to share our concerns 
with you today and we appreciate all you guys have done to help 
and maintain roads throughout the whole State.
    [The prepared statement of Mr. Hovland follows:]

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    The Chairman. Thank you, Mark, thank you very much.
    And now we'll go to our Towner County Economic Development 
Corporation Board of Directors Member, J. R. Gibbens.
    Welcome, J.R.

 STATEMENT OF J.R. GIBBENS, BOARD OF DIRECTORS, TOWNER COUNTY 
                ECONOMIC DEVELOPMENT CORPORATION

    Mr. Gibbens. Thank you, Senator Conrad, Congressman Pomeroy 
for the opportunity to testify here today. Obviously, I can 
appreciate what happened to Don, there. Don and I were both 
mayors of the towns for 8 years. Don, the one thing that I did, 
I found and able bodied replacement to replace me.
    [Laughter.]
    Mr. Gibbens. You should have done a little--worked a little 
harder, you wouldn't have ten roped in, there.
    [Laughter.]
    Mr. Gibbens. But, we all do appreciate the opportunity to 
serve our cities and our communities. I'm obviously from Cando, 
Towner County is the County that--Cando is the County Seat of 
Towner County. Highway 281 is vital to the transportation needs 
for Cando.
    Obviously, one of the big concerns that we have in the 
Cando area is, what's going to happen to 281 from Cando to 
Church's Ferry. Obviously, I see Joe Belford out here in the 
audience. We all saw what's happening to Devils Lake, you know, 
Cando's becoming--it's--we're getting closer to the lake all 
the time, and Cando's not moving.
    [Laughter.]
    Mr. Gibbens. We all know----
    The Chairman. J.R., I don't know if we should really allow 
you to continue to testify----
    [Laughter.]
    The Chairman. Because we need to get you down to one of the 
shows, you know? There's absolutely no reason you shouldn't be 
hosting one of those late-night shows. You'd have a huge market 
share.
    Mr. Gibbens. Anyway, we do have--we do think that it's 
important to keep 281 viable. If we don't do anything, we know 
what's going to happen to the thing. We do appreciate what the 
State and Federal Government's done relocating 281 west of 
Minnewaukan. We do need to do some grade raises north of 
Church's Ferry to preserve that. We also need to consider that 
the railroad is going to go underwater there, and without a 
transportation system, you know, we can't do any economic 
development.
    I've been fortunate to be involved in a lot of economic 
development issues around the Cando area. We've created between 
40 and 50 new jobs in last eight or 10 years expanding our 
agricultural businesses, and we're very dependent on, you know, 
all of the--not only the pork products to move south out of 
281, we have to bring a lot of the corn and stuff comes up that 
corridor. We use the equivalent in our flying operation, 9,000 
acres of corn a year to feed the pigs and the other thing is as 
I drive up and down the 281, I would assume that there must be 
some plan where you share the common road bed between 
Carrington to Jamestown to four-lane, that thing--is that in 
the works, Francis? To four-lane between Jamestown and 
Carrington?
    Mr. Ziegler. Mr. Chairman, at this time, it is not.
    Mr. Gibbens. What is the traffic out there?
    Mr. Ziegler. The traffic count, as I said, and I have to go 
back--and the truck traffic is between 600 and 700; 650 and 
700, I believe, was my testimony.
    Mr. Gibbens. OK.
    The, we know that whole transportation, it's important to 
have these roads in place, particularly in Central North 
Dakota, we think that it's important to maintain them, and we 
know that this whole lake problem is a unique 17-, 18-year 
problem, that we have to solve that problem, and we're very 
appreciative of all of the money that's been spent on the roads 
by there, but at some point we have to pull the plug on this 
whole deal and do something different.
    I really don't have anything else to add to the testimony 
that we haven't all--that we aren't all aware of right now, and 
I'd be more than happy to answer any questions. I appreciate 
the opportunity to testify.
    [The prepared statement of Mr. Gibbens follows:]

    [GRAPHIC] [TIFF OMITTED] T8154.207
    

    The Chairman. Thank you so much.
    And next we'll go to Dave Irmen from the North American 
Bison Cooperative. Let's say--it's almost 10, I think we should 
do this, because, I apologize to you, we have arranged a call 
with the family of our soldier who was killed in Afghanistan, 
and I think what we should probably do, because that's supposed 
to be right at 10:00--that we take a brief recess for--let's 
try to be back at, let's say, 10 minutes after 10 and then 
we'll go to questions of the whole panel.
    All right? The committee will stand in recess until 10:10 
a.m.
    [Recess.]
    The Chairman. The hearing will come back to order and we'll 
go to Dave Irmen, representing the North American Bison 
Cooperative.

   STATEMENT OF DAVE IRMEN, NORTH AMERICAN BISON COOPERATIVE

    Mr. Irmen. Thank you, Senator Conrad Congressman Pomeroy 
and to your fellow committee members for holding this hearing 
today and for continuing discussion on the importance of U.S. 
Highway 52 and U.S Highway 281.
    My name is David Irmen and I work for and represent North 
American Bison Cooperative and North Dakota Natural Beef, LLC. 
North American Bison Cooperative was established in 1993 and 
today harvests approximately 700 head of bison and cattle per 
week. We sell our products internationally and have sales in 
most states of the Union.
    North Dakota Natural Beef, LLC was established in 2007 and 
currently has Whole Foods Midwest as its major customer. We 
proudly represent our North Dakota Heritage in both our bison 
and beef products. Many of you know, the North American Bison 
plant in New Rockford and the North Dakota Natural Beef plant 
in Fargo are the largest beef and bison harvesting and 
processing facilities in North Dakota. As such, they provide 
not only North Dakota feeders the ability to market their 
cattle and bison in North Dakota but also feeders from 
surrounding states and provinces of Canada. For every dollar in 
cattle and bison retained in North Dakota, $4.50 of economic 
activity is generated for the state of North Dakota.
    As major a transportation route, U.S. Highway 281 and U.S. 
Highway 52 are critical routes to the North American Bison 
Cooperative and North Dakota Natural Beef. First, they are the 
primary highways that are utilized to bring bison and beef 
animals to our plant in New Rockford. U.S. Highway 52 is the 
main artery, and is used by our bison and beef producers from 
the western regions of North Dakota, Montana, Saskatchewan and 
Alberta allowing them to bring their animals to the New 
Rockford plant with excellent highways and with greater speed 
than other routes.
    We currently have over 65 trucks per month delivering 
animals and another 50-plus trucks per month picking up at our 
New Rockford plant. That is 115-plus trucks per month using the 
highway. Additionally, U.S. Highway 52 and U.S. Highway 281 are 
the primary corridors that allow the New Rockford harvested 
animal carcasses to be transported to Fargo. These highways are 
used daily by our trucks which a fellow employee and I 
personally drive every day. They are critical to the profitable 
and productive functioning of North American Bison Coop and 
North Dakota Natural Beef.
    The ability to count on the maintenance and functionality 
of these highways is critical to the operation of NABC and NDNB 
who, combined, will generate a sales revenue in excess of $40 
million this year.
    On a personal note, many of my friends and I rely on these 
highways for travel to and from shopping at grocery stores to 
clothing stores in Devils Lake and Jamestown as well as using 
the recreational areas in Devils Lake. To understand the impact 
of these highways for recreation, just count the number of 
commercial vehicles, hunters, motor coaches, trailers, and 
fishing boats that travel this highway and you start to realize 
how critical these highways are to the State of North Dakota's 
economy. These highways are major arteries that are relied upon 
by literally thousands of people and businesses, not the least 
of which are the two companies I represent.
    It is critical to the economy of this region and North 
Dakota that the roadway system supports consistent and reliable 
transportation for businesses. This requires a roadway system 
that is in good condition, has adequate capacity and is well-
maintained, even in inclement weather. On a personal note, this 
makes my family feel much better when I am driving during the 
winter months, and we know we can count on these highways being 
maintained.
    As a taxpayer and local resident, I know that investments 
in the public roadway system support the economy through, one, 
direct job creation through construction activities; two, 
indirect and induced job support; and, three, productivity 
gains.
    In summary, from both a personal and business perspective 
U.S. Highway 281 and Highway 52 are critical to the success of 
our companies and to the success of the region of North Dakota 
to compete effectively. Driving these highways daily makes me 
appreciate the diversity of their use. I see farm machinery, 
buses, commercial trucks, tourists, and recreational vehicles 
every day. Without maintenance and continued support, this 
region would stand to lose business, tourism and farming 
revenue.
    Thank you for allowing me to testify today for a highway 
system I depend on for my livelihood.
    [The prepared statement of Mr. Irmen follows:]

    [GRAPHIC] [TIFF OMITTED] T8154.208
    

    [GRAPHIC] [TIFF OMITTED] T8154.209
    

    The Chairman. Thank you very much for that very excellent 
testimony. I don't think anybody could hear that and not 
realize how important it is to people's lives. And that's 
really what this is about.
    I'd like to go back to Francis Ziegler, Director of the 
North Dakota Department of Transportation and clarify a few 
things, if I could, for the record.
    First is, the Association of State Highway and 
Transportation Officials have called on the new Transportation 
Bill to be funded at a level of $468 billion over 6 years. Is 
that correct, Francis?
    Mr. Ziegler. Mr. Chairman, that is correct.
    The Chairman. And, if it's a 6-year bill that would be $78 
billion a year?
    Mr. Ziegler. That is correct.
    The Chairman. And the Trust Fund is--to fund transportation 
legislation is only providing $31 billion a year. So, by my 
math, that's a $47 billion a year shortfall. And so, obviously, 
we've got a problem. And we all understand that the United 
States has a debt that has been growing very dramatically for 
the last 10 years. In fact, the debt doubled the previous 
Administration, it's set to double again in this Administration 
if we don't take action. I've been asked to serve as a member 
on the Debt Reduction Commission that the President has put in 
place, some 18 member, and if 14 of the 18 of us can agree by 
the end of this year, Congress will vote on our plan. And I can 
tell you this Commission--we meet every week, we've been 
spending hours and hours and hours. Last week we had a meeting 
that started at 9 in the morning and went until 7 at night. So, 
the debt has to be a focus, because it threatens the long-term 
economic security of the country.
    So, when we look at this transportation need--and I'm not 
disputing the number that your colleagues have come up with, it 
is a stunning number, $468 billion over 6 years is a tremendous 
amount of money. But, if we look at the need across the 
country, we see what needs to be done with highway and transit, 
it's not a number that is an unreasonable one in terms of the 
need.
    But, I think it's very important for people to understand, 
if the need is $78 billion a year and the funding that is 
available is only $31 billion a year, there are only two 
options. One is to cut the spending dramatically, cut it more 
than 50 percent, the other--the only other possibility is to 
raise revenue. And I don't see many people volunteering to pay 
a higher gas tax, and that's the funding that we have.
    Frankly, I don't think that funding source makes as much 
sense now as it once did, because now we're moving to vehicles 
that aren't going to have a gas tax. We're going to see a 
tremendous explosion in electric vehicles, it's forecast, over 
the next 10 years. We have other types of fuels that are being 
used, so this approach clearly has to be faced up to.
    I just wanted to ask you, Director Ziegler if, as some of 
my colleagues are saying--I'll just be very blunt, some of my 
colleagues are saying, ``Cut it by the amount necessary to get 
down to the Trust Fund revenue level,'' that would be a cut of 
almost 60 percent. What would be the affect, Director Ziegler, 
if the Federal funding was cut by 60 percent?
    Mr. Ziegler. Mr. Chairman, the outcome of cutting our 
revenues, or Federal aid by that much would be devastating to 
the State of North Dakota. That would mean that our program 
that's been laid out over the next four or 5 years would have 
to be cut in excess of 50 percent to make it happen. That then 
we have to reprioritize and work within that system.
    But, as we hear about the needs, when we go out to our 
regional meetings, and as we hear about the needs at these 
hearings, Mr. Chairman, it's pretty obvious the needs are 
there, so reprioritizing would be a very difficult task to say 
the least, and a lot of our work would not get done, and our 
transportation infrastructure would start crumbling.
    The Chairman. Well, I think that's the truth of the matter. 
In many ways I wish it weren't the truth of the matter, because 
this funding gap is enormous--$78 billion of needs that are 
identified, $31 billion of funding, that's a $47 billion a year 
difference. Over 6 years, that's 240 and 42--that's $280 
billion dollars. That's a big hole to fill.
    And so, my hope is people think about the need that exists 
across the country, certainly in our State. I think these 
hearings we've held, Director Ziegler, you've been at every one 
of them, I thank you for that. The need that's been documented 
is about as clear as it can be. Certainly this hearing today 
has been, I think, quite persuasive on the need on 52 and 281. 
What we heard in New Town, very dramatic testimony, certainly 
we saw that further west of North Dakota in an earlier hearing, 
a hearing we did in Jamestown last year, it's just very 
important that we communicate directly with people the reality 
that we confront here, and it's going to have to be dealt with. 
Just tacking it on the debt is not an answer. I can tell you, 
as a member of this debt Commission that have been meeting now 
for months, the threat to our country's economic security of 
just adding to the debt is a very serious matter. Because, at 
some point, people won't loan us the money to finance this 
debt. And where is this money coming from to finance this debt 
today? It's coming, primarily, from the Chinese and the 
Japanese. In fact, the Chinese have now become our No. 1 
creditor. We owe them over a trillion dollars.
    And so, we've got to face up to the reality that we can't 
just keep putting it on the charge card, that option's running 
out. We're going to have to pay for this.
    And, does that mean that we can't cut anywhere? No. We're 
going to have to cut. I don't think there's any way that we're 
going to fund $468 billion over the next 6 years. I mean, I'll 
be very direct with you, I don't think that's in the cards, 
because I don't think anybody's going to come up with the 
revenue of $47 billion a year difference between what the Trust 
Fund is currently providing, and what the needs are that have 
been identified.
    So, it's pretty clear to me we're going to have to work 
both sides of this equation--we're going to have to find some 
other revenue source, and we're going to have to make cuts. And 
that's going to be painful, painful business.
    Let me--one other question and then turn it over to 
Congressman Pomeroy and that is, Francis, you've indicated that 
52 percent of the program in North Dakota is from the Federal 
program, 57 percent if one counts the Stimulus funding for the 
several years that that's operative, and then what would the 
figure be with emergency funding figured in? Because on the 
emergency funding, as we discussed yesterday, there the funding 
is 100 percent Federal. Do you have a calculation on what that 
would take us to, in terms of the Federal share?
    Mr. Ziegler. Mr. Chairman, unfortunately I don't have that, 
but I can tell you where we're at with the ER Program.
    The Chairman. OK.
    Mr. Ziegler. This year alone, we'll be spending 
approximately $80 million in ER, that's Emergency Relief, 
that's raising the grades in Devils Lake and in other parts of 
the State where they're flooding and the snow melt has caused 
potholes to rise to where they're inundating our roads, but in 
total, we are expecting $150 million in ER Program in the 2009 
disaster and the 2010 disaster, combined. So, add $150 million 
to that equation and do the math, and that's what it would 
amount to. I shouldn't guess, here, as a witness, but if I--I 
could do the math and get back to you with the exact number.
    The Chairman. Yeah. Would you do that for us? Because I 
think for the purposes of the record, I think we need to clear 
what percentage is Federal when we take all sources, and we 
look at the expenditure. I think it's fair to say, if we're 
talking $450 million this year, and $80 million of that is 
emergency, 100 percent Federal funding money, that would add 
not quite 20 percent, but getting close to 20 percent--16, 17 
percent, to 57--we may be approaching 70 percent Federal share, 
when we stack everything up.
    But, if you could do that for me, I think it's important 
that we have that for the record.
    The Chairman. Congressman Pomeroy?
    Mr. Pomeroy. Mr. Chairman, recognizing your role as Budget 
Chairman and then also on the bipartisan Deficit Reduction 
Commission, your comments on the funding straits facing our 
country, the need to deal with these extraordinary deficits are 
very well made.
    I also think, though, the other side of the coin well-
presented by the panel, investment in infrastructure is 
basically growing, directly related to growing and diversifying 
the economy, we've seen it in the west with the energy 
explosion in North Dakota, but we've seen it through the panel 
today, relative to creating new jobs, making new opportunities 
relative to our own agriculture--tremendous ag output capacity.
    The Commissioner's comments note that we ship 30 percent 
more as a nation in agriculture, being one of the areas of our 
economy, 16 percent of GDP where we actually run a favorable 
trade surplus.
    If you look at North Dakota in that equation, we pay an 
enormous role in terms of contributing export and growing the 
economy. It's important to North Dakotans, it's important to 
the country as we look at trying to have a healthy mix of 
exports relative to imports.
    Mayor, I would just--I'm impressed with the additional 
projects you outlined that Carrington is seeking, and even in 
the face of that, you've seen pretty substantial truck growth 
going through your community, what would you attribute this 
growth in traffic to and what are your prospects relative to 
the projects you told us about?
    Mr. Frye. Well, in regards to the projects it's pretty high 
that they're going to happen, specifically the feed project, 
the likelihood of that happening, extremely high.
    Mr. Pomeroy. Great.
    Mr. Frye. The ethanol project, they're doing a test in Iowa 
today with test plot beets that were grown right here at the 
research center at Carrington, and that's being shipped to 
Iowa, so I would say that that's moving forward rather quickly. 
The equipment is designed and coming from Europe, I would 
highly expect that project to happen at some point in time.
    We talked about a couple of projects, but we have a new 
dairy operation that has nearly 1500 cows, that those vehicles 
are being added to the highway, I talked about the New Rockford 
elevator, and we have a farmer in town who presently exports 
all of his flax to South Africa and several other countries, 
and he's using the transportation system, it's growing.
    And I think the reason is, it's because of our city's name. 
Our nickname is ``The Central City,'' and if you look at a map, 
70 percent of the State's population is within 125, 130 miles 
of Carrington.
    When you look at another map, and a little brochure I'm 
going to give you today, Congressman, there's a map in there 
that shows you where all of the processing plants are. Again, 
nearly 70 percent of those are within that distance. So, 
Carrington obviously makes sense when you're looking value-
added food processing.
    Mr. Pomeroy. I would reckon that the Chieftain is one of 
the most recognizable landmarks in the State.
    Mr. Frye. That's right.
    Mr. Pomeroy. Reflecting traffic that continually goes 
through here. You talked about your miles while I've got a wife 
in Grand Forks, kids in Bismarck and I work in Washington, I'm 
an at least twice a month fixture, maybe more, at the truck 
stop I referenced earlier, fueling up as I head across the 
State, so I personally have seen the tremendous growth of truck 
traffic in this area.
    Mark, that co-op of yours has come a long way. Your growth 
trajectories continue positive as you continue to diversity the 
products you're bringing to--collecting from your farmers and 
bringing to market?
    Mr. Hovland. Yes, we do. This plant here, when we--we 
purchased this from Carhill back in 2002 and we've actually 
doubled the handle that they had for the previous 5 years. Now 
with the new one coming on board, we're probably going to 
struggle to take that up any higher, but yes, we continue to 
handle whatever our patron base wants to produce.
    Mr. Pomeroy. Terrific.
    J.R., I was looking at Minnewaukan, here, a couple of weeks 
ago, and I could not believe that this 281 that we talked about 
over the years, we're going to have to move it, we're going to 
have to divert around the town. And Good Lord, that old 281----
    Mr. Irmen. It's gone.
    Mr. Pomeroy. It's gone. And it is well under water. You can 
see where the road line is, but it's gone. You see changes like 
that, obviously, continuing really throughout the 
infrastructure of that area, not quite reaching to Cando yet, 
but----
    Mr. Irmen. Well, you know, we need to fill the roads up or 
stabilize the lake, something's got to be done.
    Mr. Pomeroy. And that itself has added a traffic dimension. 
I don't know that we've talked about that as much as the ag 
dimension, but, you know, when you've got a national disaster 
area, like the Devils Lake flood has turned into, you've got an 
awful lot of responsibility continuing for some years on that.
    Mr. Irmen. That's correct.
    Mr. Pomeroy. Dave, in conclusion, this plant of yours have 
seen good times and bad times. Your numbers reported today 
looks like a very strong operating demand and good things for 
the future.
    Mr. Irmen. Yes, it does.
    Mr. Pomeroy. Congratulations.
    Mr. Irmen. When we started up, we were built to do 25 head 
a day, now we are doing anywhere's from 80 to 140, sometimes 
150 a day, slaughtering. And that's a lot of animals we have to 
move between here and Fargo.
    Mr. Pomeroy. Seven hundred a week, I must say that was 
beyond what I knew was occurring and I congratulate you for the 
success and do understand the point relative to infrastructure, 
again--we're growing the economy, here. We're growing jobs for 
people, people's kids are going to be able to grow where they 
grew up, that's a North Dakota dream, but we've got to have the 
infrastructure.
    And so, we got the message, Senator Conrad. I really 
appreciate you allowing me to participate in this hearing.
    The Chairman. I'm delighted that you did and I'd say this. 
When we had the debate on Stimulus, I argued strenuously for at 
least $200 billion on infrastructure. So, we got a package on 
infrastructure in this Stimulus package that falls far smaller 
than what I argued for. I really believe the infrastructure 
investment is the best one. And the reason I believe it so 
strongly is, that creates jobs in America, there's no leakage. 
You build an infrastructure in America, those are all jobs in 
America, and it improves the economic efficiency of America. 
Nobody can look around what's happening in North Dakota, look, 
you come to the Washington Metro area, everything at 4 is 
stopped dead. You go out on 395, or 95, it's stopped, dead. 
What is the economic cost of that to our country? Not being 
able to move goods and services as rapidly as we otherwise 
might? It's got to be enormous.
    So, to me, not only would it provide stimulus to our 
economy, but it would have also improved the economic 
efficiency of the country, and it would have all been jobs in 
America, not jobs going to China, not jobs going to Japan, jobs 
here.
    So, I wish--and I'll tell you, the other thing is, 
infrastructure investment plays out over a number of years. Not 
all of the money goes through the system in a year, and we've 
got continuing economic weakness. We've got almost 10 percent 
of our people unemployed, another 7 percent unemployed. That's 
one in every six workers in the country is either unemployed or 
underemployed. And if we had greater infrastructure investment 
in the Stimulus package or the Recovery Act, as it's called, 
those dollars would be hitting right now when you need another 
lift to the economy.
    So, you know, I regret that I was not able to persuade some 
of my colleagues that we should have done more on 
infrastructure, but I believe it very strongly. And I think the 
evidence in our State is about as clear as it can be, from the 
hearings we've been holding--Francis, you've been at every one 
of them, wouldn't you say the credibility of the presentations 
that have been made is very high, from the witnesses we've 
heard?
    Mr. Ziegler. Mr. Chairman, I totally agree with that 
statement.
    The Chairman. Well, any other witnesses, any final thoughts 
you want to register for the record before we close the 
hearing? Mayor, anything you want to add?
    Mr. Frye. Well, Mr. Chairman, I would just want to 
emphasize the continued growth or success of our community is 
directly tied to the infrastructure, and specifically the 
highway, as we've talked. And if something isn't done in a 
positive manner in the next 5 to 10 years, we're not going to 
be able to continue the growth and success that we've had.
    The Chairman. Thank you very much.
    Mark, anything you want to add?
    Mr. Hovland. I agree. For us to continue to grow and for 
our communities to thrive, we need to keep these highways 
working.
    The Chairman. All right. J.R.? Any final thoughts?
    Mr. Gibbens. One of the things, one comment I'd like to 
make is that our economies there in Towner County and Cando is 
kind of unique. We're not plagued with the unemployment things 
that the east and west coast are. I can look everybody in the 
eye and go on record, the unemployment rate in Cando is zero, 
if you want to work. We need to have more improved 
infrastructure so we could--we've worked real hard to grow our 
economies and everybody that can work is working, and we need 
to import more people to work. What I do is recruit, train and 
retain people and that's--but we need roads to do that.
    The Chairman. Yep. All right.
    Any final thought? All right, I want to thank all of the 
witnesses.
    [Whereupon, at 10:38 a.m., the hearing was adjourned.]


 FIELD HEARING: DEVILS LAKE FLOODING DISASTER: A DOWNSTREAM PERSPECTIVE

                              ----------                              


                          FRIDAY, JULY 9, 2010


                                       U.S. Senate,
                                    Committee on the Budget
                                                    Valley City, ND

    The committee met, pursuant to notice, at 1 p.m. in the 
Bridges Meeting Room, AmericInn of Valley City, Valley City, 
North Dakota, Hon. Kent Conrad, chairman of the committee, 
presiding.
    Present: Senator Conrad.

              OPENING STATEMENT OF SENATOR CONRAD

    The Chairman. I want to welcome everyone today to the 
hearing of the Senate Budget Committee. This is an official 
hearing of the committee, and therefore we will follow the 
rules of the U.S. Senate for hearings.
    One of the rules of any Senate hearing is that there be no 
open expression of approval or disapproval for the testimony of 
any witness. That is very important so no witness feels 
intimidated for giving what might be unpopular testimony. So, 
we will follow that rule scrupulously here.
    An official record of the hearing is being kept. And before 
we begin the hearing, I'd like to observe a moment of silence 
for Keenan Cooper, a North Dakota soldier who lost his life on 
Monday in Afghanistan. The Congressman and I were able to speak 
to his family this morning, and I think they would very much 
appreciate this sign of respect.
    [Moment of silence observed.]
    The Chairman. Thank you to all of you. We appreciate, very 
much, the attributions of Keenan Cooper and the sacrifice, the 
ultimate sacrifice that he paid for our country, and we share 
in sympathy with his family the deep feelings they have at 
this.
    Let's go now to this hearing. The title of this hearing is, 
``Devils Lake Flooding Disaster: A Downstream Perspective'' I 
want to begin by welcoming our distinguished witnesses today. 
We have two panels. Our first group includes the Acting State 
Engineer of the Water Commission, Todd Sando; the Chief of 
Environmental Health for the North Dakota Department of Health, 
Mr. Glatt, David Glatt; and Valley City Mayor Bob Werkhoven.
    Our second panel will include Lisbon Mayor, Ross Cole; 
Barnes County Commissioner, Cindy Schwehr; and Secretary for 
People to Save the Sheyenne, Richard Betting. I look forward to 
hearing from each of you on the steps that should be taken to 
address the flooding crisis in the Devils Lake Basin.
    I look forward, as well, to the participation of the 
Governor if he is able to arrive during the hearing. He was 
attempting to change his schedule yesterday so that he could be 
here today, and we're hopeful that he will be able to be in 
attendance and participate.
    I'm going to start with kind of a brief overview of what we 
are experiencing and what the challenges are that confront this 
region.
    Since 1992, all of us know, that Devils Lake has risen 
nearly 30 feet. Tens of thousands of acres of productive 
farmland have been flooded, and hundreds of homes and other 
structures have been moved. In fact, more than 600 structures 
have been moved. The transportation network, including roads 
and the rail lines has been disrupted and the local economy 
continues to be adversely affected.

[GRAPHIC] [TIFF OMITTED] T8154.390


    Last year the lake rose more than 3.5 feet. Recent heavy 
rains have pushed it to a record elevation this year. Devils 
Lake is now within 6 feet of the natural outflow overflow that 
would have an uncontrolled release of water into the Sheyenne 
and beyond. Finding solutions to prevent an uncontrolled 
outflow is in everyone's best interest. It is particularly 
important for those who live downstream.
    Experts tell us the wet cycle in the basin is likely to 
continue for years. There's no way to predict exactly when the 
normal cycle of drier conditions will return. But we have been 
told that there is a 72 percent chance that the wet cycle will 
continue for 10 years or more. Let me repeat that--a 72 percent 
chance that this wet cycle will continue for more than 10 
years; a 37 percent chance that it will continue for 30 years, 
and a 14 percent chance that it will continue for at least 60 
years. No one knows whether these projections are accurate, but 
it gives us some idea of the threat of a continuing wet cycle.

[GRAPHIC] [TIFF OMITTED] T8154.391


    Simulations show a substantial risk the lake will reach the 
spill elevation of 1458 feet. Today as we meet, the lake is 
about 1452, somewhat less than that, but at about 1452 feet. An 
uncontrolled release of water would cause significant damage 
downstream. The quality of water released would be extremely 
high in sulfates, five times worse than if the water had been 
released out of the west end. This is one of the things that's 
very hard to kind of get one's mind around, but the quality of 
the water in that lake is not consistent throughout the lake. 
The water quality out of the east end is about 10 times worse 
than the water quality out of the west end. If we had an 
uncontrolled release of water out of the east end, where the 
water quality is many times worse, drinking water supplies 
could be impacted. The cities of Valley City and Lisbon would 
face river levels exceeding those experienced during the 2009 
historic flood. Discharges from Lake Ashtabula could be twice 
what was experienced during 2009 and some properties could be 
flooded for an extended period of time, we're talking weeks of 
very high water, making recovery extremely difficult. Some 
properties would likely not recover.

[GRAPHIC] [TIFF OMITTED] T8154.398


    When the flooding disaster began, we worked cooperatively 
on a three-pronged strategy--Upper Basin storage--increasing 
Upper Basin storage, protecting infrastructure--by raising the 
dikes, raising roads, and moving water off the lake. We had 
approved, in the 2000 timeframe, provisions for a Federal 
outlet that would carry 300 cfs of water out of the lake. That 
was approved, the initial funding secured, but at the end of 
the day, State and local units of government decided they could 
not afford their share, there was a Federal-State cost-share, 
State and local units would have to provide 35 percent of the 
money. Thirty-five percent of the cost of the Federal outlet 
would have been $72 million, and State and local officials told 
us they could not afford that amount.
    As a result, the State constructed an outlet with a 
capacity of 100 cfs that has now been upgraded to 250 cfs, and 
that outlet is actually working today.
    We have pursued all of the elements of this strategy 
aggressively--Upper Basin storage, protecting infrastructure 
and an outlet feature. This chart shows the significant 
investment the Federal Government has made in mitigation 
measures in the Devils Lake Basin. In total, we have secured--
ah, the Governor is here, welcome. Come join us.
    Governor Hoeven. Senator.
    The Chairman. Good to have you here, thanks for coming.
    Let me just repeat. In total, we have secured $700 million 
just in Federal resources to protect the region. To keep the 
road network intact, over $400 million has been spent since 
1995, to raise roads and address the roads acting as dams. As 
we know, we have roads in the Devils Lake Basin that were never 
designed as dams but are, in effect, serving as dams today. 
That is extremely risky, because they were never designed to 
act as dams, and under hydrologic pressure they could burst. 
And because there are people living behind those roads, you 
could have a loss of life. As a result, we have secured nearly 
$100 million to deal with those roads acting as dams, to 
upgrade them to prevent the danger of them breaking.

[GRAPHIC] [TIFF OMITTED] T8154.399


    FEMA has spent $84 million since 1993 in repairing damage 
to public infrastructure caused by the rising lake, relocating 
threatened structures, and buying out Church's Ferry. As I 
indicated earlier, 600 structures have been moved.
    The Corps of Engineers has spent $200 million since 1993 on 
the levy and other protective measures. As you know, we're in 
the third raise to the levy protecting Devils Lake. If that 
levy were not in place, and had not been raised, Devils Lake 
would be under water today.
    HUD has provided more than $11 million since 1997 to 
mitigate damages caused by the disaster. But the lake continues 
to rise, as I indicated, 3.5 feet last year. It is clear we are 
now in uncharted territory.
    We have always understood that only comprehensive solutions 
will succeed in the long run. The problems at Devils Lake can 
not be solved by simply flooding everything downstream. People 
downstream have a very significant interest in the decisions 
that are made upstream. In effect, we're all in this together. 
There is much to be lost in the Devils Lake Basin by a failure 
to deal with these issues, there is much to be lost downstream 
by a failure to deal with these issues.

[GRAPHIC] [TIFF OMITTED] T8154.388


    However, this cannot be seen as only a Devils Lake regional 
problem. It is now far beyond the Devils Lake Basin. This 
really involves the entire eastern third of the State of North 
Dakota.
    Since the May Flood Summit in Devils Lake, the 
Administration has convened a working group to evaluate both 
short-term and long-term options. The working group has 
representation from all of the relevant Federal agencies 
including the Army Corps of Engineers, FEMA, the Department of 
Transportation, USDA, the Bureau of Indian Affairs, the 
Environmental Protection Agency, the U.S. Geological Survey, 
and the State Department. The group's recommendations are 
expected by September 9th. September 9th their full range of 
options is expected to be provided to us. And they are meeting 
regularly with people in the affected communities. There's a 
group coming, as I understand, next week, to do soundings with 
relevant officials on the whole range of options being 
considered.

[GRAPHIC] [TIFF OMITTED] T8154.386


    But, the hard reality is, the Federal Government cannot 
control Mother Nature. The State of North Dakota can't control 
Mother Nature. So, the critical question is, if the current wet 
cycle continues, what should be done to prevent the disastrous 
consequences of an uncontrolled overflow on the east end of 
Devils Lake? That is, from the perspective of those downstream, 
what options should the Federal Government be considering to 
deal with this potential flooding disaster?

[GRAPHIC] [TIFF OMITTED] T8154.400


    I'm particularly interested in hearing from our witnesses 
on where they think the working group should focus its 
attention and I intend to share with the working group the 
results of the hearing here today. And I am delighted that the 
working group has asked Colonel Price, the new commander of the 
St. Paul District of the Corps to be here today.
    Colonel Price, if you'd stand so everybody could see you? 
Colonel Price is in the back, put up your hand. Colonel Price 
is the new man in charge of the St. Paul District. He has been 
designated by the working group to be here today to carry back 
the lessons learned as a result of the testimony that we will 
hear this afternoon. I am delighted that he is here.
    I should also indicate that the working group has been 
headed by now the Corps of Engineers. They have been put in 
place as the head of the working group to coordinate all of the 
other Federal agencies.
    I also want to indicate how much we appreciate the close 
cooperation we have had from the State of North Dakota and all 
of the local units of government--Mayors, County Commissioners, 
up and down the affected area have all participated in dozens 
and dozens of meetings.
    With that, I want to turn to Congressman Pomeroy who, of 
course, is a Valley City homeboy, raised and grew up here, and 
I know has a very deep feeling for Valley City and the people 
who reside here and in the area.

  STATEMENT OF HON. EARL POMEROY, U.S. CONGRESSMAN FROM NORTH 
                             DAKOTA

    Mr. Pomeroy. Thank you, Senator and thank you for bringing 
this hearing to Valley City. And I am pleased to be a part of 
it.
    Valley City, my hometown. And it's good to be home. Growing 
up on the Sheyenne River, like I did, had so many events 
indelibly etched in my mind. Certainly among them, flood 
fights. And we'd build these dikes and we'd fight like crazy, 
and after awhile the water would go down and you'd take the 
dike down, and by the time you finally got everything cleaned 
up, a few more weeks go by, life back to normal. That's 
happened just once, my growing up, it happened several times, 
in fact, the home ultimately the ownership of my sister, the 
family home, is a FEMA buyout and burned down. It just, under 
the circumstances, dealing with more water than we ever dealt 
with for decades in the life of this house, it didn't make 
sense to have a house there anymore.
    Now, in performance of my present responsibilities as the 
Congressman from North Dakota I've gotten to work very closely 
with the people of Devils Lake. The fundamental difference 
between their flooding experience and the ones that I had 
experienced growing up in Valley City--that flood comes, and it 
stays. And then it gets a little worse, and it stays. It gets 
worse beyond what you could ever imagine, and it stays. So, 
foot by foot of a 28-foot vertical rise in Devils Lake has 
created the kind of flooding trauma for the people living there 
that I'd never seen the like of. I certainly had a--I can 
empathize because of the flooding experiences I had growing up 
along the Sheyenne, but I've never seen anything like this.
    We have, growing up as a North Dakota community, we view 
ourselves as a North Dakota community. So, I know because my 
mom's here, my sister's here, I'm in Valley City all of the 
time, there's been a lot of concern in Valley City about what's 
going on in Devils Lake and a lot of empathy for the 
extraordinary property damages taken, the homes moved, the 
lives disrupted, the economy impacted. But we are now moving to 
a very different component, a very different place in time in 
terms of evaluating what's going on in the Devils Lake region. 
Events have materially changed the risk that the Devils Lake 
regional flood becomes an eastern North Dakota regional flood 
with Valley City first down.
    In--growing up in this town, growing up across Valley City, 
anyway, but across North Dakota anywhere, you're raised with 
the value, you face your problems. You don't wish them away, 
you don't just pretend you don't have to deal with things, you 
face your problems.
    So, Senator, I think the tremendous public response you've 
had in the hearings you've held on this topic show this is a 
North Dakota community facing its problems. We intend to 
evaluate what are the strategies to best mitigate what would be 
the catastrophic losses of uncontrolled spillover? There's no 
getting around it; it's time to face that question, and face it 
head-on.
    The risk has changed. Ten years ago we were talking about 
the uncontrolled spillover, looks like it's happened a half 
dozen times over 6,000 years is what geologists tell us. But I 
will tell you, at that point, it seemed like, certainly within 
the realm of possibility, but it seemed somewhat remote. That 
was many feet of lake rise ago.
    We've come up 30, we've got 6 more to go before spillover. 
Now, that means, again, a material change in the risk of 
uncontrolled flooding, and that risk has to be addressed.
    I've got a brother-in-law that farms one mile south of 
Ashtabula Dam. And his take on this is, better to proactively 
deal with the increased water flows than run an unacceptable 
level of risk that you could end up with uncontrolled water 
flows. I believe that view is deeply rooted in North Dakota 
common sense is largely found up and down the Valley as we look 
at this thing, and our task is now to try and find the 
strategies that effectively mitigate the risk.
    In this regard, I'm very pleased, Senator with the progress 
on the task force. We had a task force in the nineties and part 
of it was dealing with the realm of issues we had to deal with, 
creative ways to use flood insurance to proactively move homes, 
we moved 500 homes using that strategy. A levy build around the 
city, we got a levy build really in no time flat when you 
consider a 9-mile levy, working the way--it would normally be a 
much longer proposition for the protection we were able to put 
in place there. Additionally, Rose's Dams--many other facets of 
this issue were worked through, really, in record time.
    But given the present lake levels and the present new 
dimension of risk to all of eastern North Dakota it was time to 
reconstitute the task force, even at a higher level. The 
conference calls that I've been on with the Senators, with Vice 
President Biden, with the Office of Management and Budget 
Director Pete Rorsog, and the meeting we had with the senior 
representatives of the agencies have left me assured that we're 
not on the track to another study, some kind of progress to 
some other study. We're trying to get an action plan, we want 
an action plan by the end of the summer, in terms of a risk 
mitigation strategy for this problem.
    I believe that the record to be established today will be 
extremely helpful to this committee. I know there will be 
professional staff, high-level technical professional staff 
pouring over all of the testimony coming in today.
    You said it, Senator, when you--I think it kind of sums it 
all up, very literally, in light of the increased risk of 
uncontrolled flooding--this no longer is an upstream issue, 
it's no longer a downstream issue--we're all in this together, 
at this point. I absolutely believe, as a son of the Sheyenne, 
that we can find strategies to work through that will 
represent, in my opinion, acceptable up and down the river, up 
into the Devils Lake region--acceptable strategies to deal with 
this natural phenomenon that has presented numerous challenges, 
but challenges we can work through.
    Thank you.
    The Chairman. Thank you very much Congressman Pomeroy and 
thank you for all of the time and effort you have dedicated to 
trying to find solutions to the challenge.
    Let me ask, is there any way to get additional chairs on 
the side? We have about 20 people, here, who I think are still 
standing. We have one chair that is available up front if one 
of the women who are standing back there, we invite one of the 
women to come up and take a chair. And if we could--there are 
about 20 people still standing, it would be nice if we could 
get chairs for them. I think they're going into the next room 
to do that.
    Right down the middle, here, if people could just scoot 
their chairs this way, and people who are on this side could 
scoot their chairs that way, we could get a line of chairs 
right down the middle.
    We'll stand in recess for 5 minutes while that's being 
done.
    [Recess.]
    The Chairman. We are also joined today by our Governor, 
Governor Hoeven. We very much appreciate him rearranging his 
schedule to be here today and we ask the Governor for any 
opening observations he might have. And I welcome him to stay 
during the meeting today if he'll have any final conclusion at 
the end of the hearing, I'd be glad to recognize him again at 
that time.
    Governor Hoeven?

 STATEMENT OF HON. JOHN HOEVEN, GOVERNOR, STATE OF NORTH DAKOTA

    Governor Hoeven. Thanks, Senator. Good to be with you, and 
also Congressman Pomeroy, good to be with you.
    Homebody, huh? Was that the term?
    Mr. Pomeroy. Yes, sir. Yes, sir.
    [Laughter.]
    Governor Hoeven. That's pretty good.
    Good to see all of you here. I'm struck by the fact that we 
have people here both from Valley City and from the Devils Lake 
area and all parts in between. I think that's a really good 
thing. I think that's great. Because we're all going to have to 
work together on this issue and so I hope that promotes some 
dialog between people from both the Lake Region and down here 
in the Lower Basin area. And we continue this effort to work 
together, because that's how we're going to get on top of this 
challenge.
    I contacted Senator Conrad when I heard that he was going 
to have these hearings both up in Devils Lake and down here in 
Valley City and asked if I could maybe be part of them, and he 
was most gracious and said absolutely. And I appreciate that 
very much. Because this is a partnership. We need to work 
together at the State level, with Mayor Werkhoven and all of 
the local officials, with the County Commissioners, they're 
here, I know Commissioner Schwehr is going to testify, as well, 
but we need to be working together in partnership, all of the 
local officials, the local people, both in the Devils Lake 
region and here in the Sheyenne Valley, as well, it needs to be 
local, State, and Federal partnership. This has to be a 
partnership to deal with a challenge like this.
    And so that's the approach we're taking. And I'm going to 
start with this point, and end with this point--we need all of 
you working together. I mean, we really need you to work 
together, and that's the way we're going to solve this 
challenge, and that's how we're going to do the best job for 
everybody, whether you're in the Lake Region, or whether you're 
downstream along the Sheyenne.
    And so that's what we're working toward, and I think that 
if we come out of here with more dialog and people talking to 
each other, communicating and working together on these 
challenges, then that's certainly a great result.
    The approach that we're taking from the State perspective 
in meeting this challenge is a three-part approach. And I know 
you've heard me talk about this before, but it's a three-part 
approach, so we've doing it in partnership, local officials 
with the Federal officials. But the three-part approach is 
storing water in the Upper Basin, mitigation--meaning building 
up roads and dikes in the Lake Region area around Devils Lake, 
and working to move water out of the lake. All three. All 
three. And again, I go back to that's why it takes all of us 
working together, OK?
    Now, the lake has gone up as both Senator Conrad and 
Congressman Pomeroy just mentioned, and you'll hear from Todd 
Sando, our State Engineer and also Dave Glatt who's our Chief 
of our Environmental Section for the Health Department. These 
guys know what they're talking about, they're very common sense 
oriented, they know the science behind this stuff, and they'll 
give you more detail.
    But, from 1993 to the present, Devils Lake has gone up 
about 30 feet--30 feet, OK? We're about 6 feet from an 
uncontrolled flow off the east side, OK? So, that's the 
situation. Now, let's talk first about the first part of that 
three-part plan, storing water in the Upper Basin. In 1993, the 
lack was about 49 million acre feet of storage--is that the 
right stat, guys? Forty-nine, excuse me, 49 million acres? 
Thousand. Excuse me, 49,000 acres, not acre feet. Let's go back 
to acres, 49,000 acres, OK? And the guys will go through the 
numbers, here, but 49,000 acres of water stored in Devils Lake. 
It's now 180,000 acres of water stored, OK? So, right there, in 
terms of storage, you're talking over 100,000 acres of water 
that's stored in the lake, all right? So, from 49,000 acres 
covered by the lake to 180,000 acres. That's more than 100,000 
acres inundated, and that's water being stored, OK?
    Now, in addition to that, if you go up to the Upper Basin, 
you go north of the lake, you go west of the lake, you'll see a 
tremendous number of sloughs, potholes, wetland areas, OK? Now, 
don't just take my word for it, and these guys will go through 
some of the statistics; go up and take a look. Go up and take a 
look at the size of the lake, and realize how much water is 
stored in the lake now, from 49,000 acres to 180,000 acres, OK? 
And then go up north and west of lake, drive around up toward 
Akandu area and so forth and look at how many wetlands there 
are. And you'll realize how many hundreds of thousands of acres 
of water is being stored in the Upper Basin, OK? That's Upper 
Basin storage, it's an incredible amount of water.
    You know, I fly from Bismarck to Grand Forks and so I see 
it, and you look down and I think both the Senator and 
Congressman will tell you the same thing, it's just endless 
numbers of wetlands, in addition to this incredible expansion 
of the lake. So, there's a tremendous amount of water being 
stored in the Upper Basin. So, that's the first part, storing 
water in the Upper Basin.
    Next thing let's talk about for a minute, is mitigation, 
OK? Building up roads and dikes around Devils Lake area. Now, 
here again, the numbers will vary, our numbers are about $650 
million has been put into building up dikes and levies, and 
building up roads. Now, I don't think that counts some of the 
BIA dollars and some others, so the numbers may be even bigger, 
depending on what's included and what isn't.
    But, so far, we have numbers that show $650 million that 
have been put into building up roads and building up dikes to 
protect the city of Devils Lake to protect homes, to make sure 
that we can continue to travel on roads up there. And highways 
like 281 have been completely rebuilt and moved, because Old 
Highway 281 is underwater, it's now under the lake, and there 
are many, many other roads in that same situation. Right now, 
the main highways up there are Highway 19, Highway 20, and 
Highway 57 and we are working on all of them, trying to protect 
them from the higher levels of water, and we're even working on 
Highway 2, right now, as well as raising levies to elevation 
about 1460 to 1465, OK? So, that's $650 million-plus going into 
the second part, mitigation, building up roads and dikes. So, 
storing water, building up roads and dikes, and now we come to 
the third part, moving water out of the lake.
    Now, as I said, we're up 30 feet since 1993. Thirty feet 
since 1993. We've inundated hundreds of thousands of acres of 
farmland and we're 6 feet from an uncontrolled spill on the 
east side. So we need to move water out in an orderly and a 
managed way, instead of having an uncontrolled flood. And 
that's exactly what we're doing.
    We're now running 250 cfs out of the lake, and we are going 
to continue to need to move water out of the lake to prevent an 
uncontrolled overflow. And again, these guys will go through 
some of those statistics. And so that's what we're trying to do 
in an orderly, in a managed way, where we make sure we're 
protecting downstream interests here in Valley City and other 
places, as well as working to mitigate the flooding up in the 
Lake Region. And that's the approach we're taking, and that's 
where we really need people to come together, and to work 
together to make sure that they understand that we're doing 
this in a way that benefits everybody, rather than, you know, 
one group, the upstream group versus the downstream. Or the 
downstream group versus the upstream group.
    So, our objective is to make this work for everybody as 
well as we possibly can. And when it comes to moving water out 
of the lake--which is part of this, which needs to be part of 
this solution--it's doing it in a managed, orderly, and 
controlled way.
    That's why, for example, when it comes to sulfates, we've 
already worked with the community, here, in Valley City to 
provide between State and Federal, $14 million of the $16 
million cost to help upgrade the water treatment facility, 
including reverse osmosis, which will ensure that the drinking 
water is actually--not only will it provide more drinking water 
for your community to grow, but also even improve the quality. 
And again, to make sure that we manage sulfates or any other 
aspect of the water, both in terms of water quality and water 
quantity, again, so that it works for everybody and addresses 
the problem.
    That's the approach we're taking, we welcome the task 
force, the cooperation of the Corps, the EPA and the other 
Federal agencies in this process but ultimately, again, it 
comes back to all of you, the good citizens of North Dakota and 
finding ways to work together on this common challenge.
    And I look forward to the testimony today and I look 
forward to visiting with you, and I very much look forward to, 
again, a good, meaningful dialog between people both in the 
Upper Basin and in the Lower Basin.
    Thank you, Senator.
    The Chairman. Thank you, Governor. Thank you, again, for 
being here.
    And I'm going to ask Congressman Pomeroy to introduce the 
State legislators who are here, the local State legislators who 
are with us today.
    Congressman Pomeroy?
    Mr. Pomeroy. This is Senator Mary Robinson and 
Representative Phil Mueller. Is Ralph here? Oh, yeah, Ralph 
Metcalf also, he was lucky to get a chair.
    Would you introduce yourselves, please, you guys?
    Mr. Pomeroy. Thanks for joining us.
    The Chairman. Very good.
    Now, let's go to the first panel, and we'll start with Todd 
Sando, the Acting State Engineer. And again, I'd like to remind 
everybody, if you have a cell phone, please turn it off so the 
hearing is not interrupted.
    Welcome, Todd. Please proceed.

  STATEMENT OF TODD SANDO, ACTING STATE ENGINEER, STATE WATER 
                           COMMISSION

    Mr. Sando. Thank you, Senator. Yesterday I was able to 
testify in Devils Lake, too and I submitted six pages of 
testimony, so I'll be submitting the same testimony today and 
what I'll do is just summarize.
    The Chairman. Could you just speak directly into that.
    Mr. Sando. OK, can you hear me better now?
    I'll just try holding it here.
    Yesterday, I was able to speak about the wet cycle and the 
risk and some of the issues, and I'd like to kind of cover that 
to begin with today when we talk about the outlet and how it's 
operating and some of the things that we think the Federal 
Government can do to help the situation.
    So, first off, regarding the wet cycle, there has been a 
lot of work done by the National Weather Service and the USGS 
and they've been tracking the water patterns and the lake has 
been continuing to rise ever since the 1930's drought, so its 
been marching upward.
    The big issue is, things really changed in 1993. From 1950 
through 1992, the inflows into Devils Lake averaged 33,800-acre 
feet. So, 33,800. And we got this big summer rain event that 
took place in the summer of 1993 and it filled up all of the 
Basin, the watershed and the wetlands in the Basin and we had a 
lot of inflow into Devils Lake and from that point forward, 
Devils Lake has been--the Basin has been generating a lot more 
runoff and it's been due to the increased precipitation and 
the, you know, the storage being occupied by water across the 
watershed. In fact, I want to put this map up.
    This is a map of the land setting from May 15th of this 
year, and just to point this out, this is Devils Lake here, 
here's the chain of lakes to the north and this is--all of the 
blue is just water within the watershed, so you can see that a 
big portion of the watershed is under water and the lake, as 
the Governor mentioned, is up to 180,000 acres.
    Since 1993, the inflows into the lake have really changed, 
and the amount of runoff coming into the lake now has been 
averaging these last 16 years 243,700-acre feet. That's more 
than 200,000-acre feet more than the average for four decades 
from the 50's, 60's, 70's and 80's. So, the inflow is seven 
times greater now during this wet cycle than the last 16 years. 
So, I really want to point that out, that the conditions have 
really changed, and the climate hasn't been stationary, that's 
changed, and the inflows have gone up dramatically.
    As you heard, the lake's gone up 30 feet since the spring 
of 1993, and there's only 6 feet to overflow. The storage in 
the lake, what's remaining is only 1.3 million acre feet of 
storage is remaining in the lake before we overflow, so there's 
1.3 million acre feet. I just want to point out the event that 
took place in 2009. The inflow event, it was the No. 1 runoff 
event for the Devils Lake area, and it was 590,000-acre feet of 
inflow. And that added 3 feet to the lake last year.
    To put it in perspective, if we would have back-to-back 
2009s, we would be at--basically be at the overflow elevation. 
So, what I'm trying to point out, the risk is really high. The 
USGS has being doing some spill castic modeling for us, and 
they've been trying to figure out--if this wet cycle continues, 
and there's a lot of scientists out there thinks that this wet 
cycle could continue for another 10 years before it's to its 
peak, and then on--as it's on its way down, it's still really 
wet. And based on spill castic modeling and looking at the 
period of record, the USGS has estimated that there's a 13 
percent chance risk of Devils Lake overflowing over the Tolna 
coulee to the Sheyenne River. And this could take place within 
the next 20 years.
    There's so many different ways this could play out, it 
depends on what type of winters we have and the fall rains, but 
based on these traces, there's a 13 percent chance that the 
lake could overflow within the next 20 years.
    One of the things we've been doing to combat that is trying 
to get water out of Devils Lake, and we feel it's very 
important to get as much water out of Devils Lake as we can. 
And the last 5 years, we've had an outlet in place, the first 
several years the outlet was designed--it was a temporary 
emergency outlet that was designed for 100 cfs. And for the 
first number of years, the releases were rather low because of 
constraints due to the water quality. In fact, in the summer of 
2006 came, that was one of our really hot summers, June was 
over 100 degrees 11 days, the Sheyenne River basically became 
really low, and there wasn't much flow in the river, so the 
outlet didn't even run in 2006.
    In 2007 we got some water out, 2008. And then things took 
place that we tried to get an emergency rule to change the 
sulfate standard in the Upper Sheyenne River, so we put in an 
application with the Health Department to try to change that so 
we could try to get some more water out, because the lake was 
continuing to rise, and we just weren't getting much water out.
    And so last summer, we were able to get an emergency rule 
to change the standard in the Upper Sheyenne, so it's the Upper 
Sheyenne, one mile downstream to Baldhill Lamb, and the 
standard was changed from seven--450 parts per million to 750 
parts per million, and it's basically equivalent to mg/liter, 
too. And at that point, last year in July we were able to start 
operating the outlet nonstop at 100 cfs, so we were starting to 
get 200-acre feet a day off, and we started moving a fair 
amount of water at that point.
    At the same time we decided, the Water Commission approved 
additional design of an outlet, to increase it to 100 cfs 
outlet to 250 cfs outlet. So, we're looking at trying to 
increase the capacity of the outlet by two and a half times. 
So, we got the design done last fall and we actually, we were 
in construction the entire winter. We had several contractors 
working all winter long, and you know it's very difficult 
working in 20-degrees below weather, but the contractors worked 
all winter long and all spring. They were able to put in new 
pumps, so we upsized our pumping stations at Round Lake and 
Josephine and made some modifications.
    And we're--as of about 10 days ago, we've completed the 
construction of the upsizing of the outlet. So, the outlet's 
starting--not this past Monday, but the Monday before--we 
increased the discharge from 100 cfs to 250 cfs. So, for the 
last 11 days or so, we've been running at 250 cfs.
    So, as the summer goes along, here, we'll continue to 
operate. We do have some of the issues are still related to the 
standards in the Sheyenne River. One of the issues as the 
water--the water moves down to Lake Ashtabula, I did discuss 
yesterday the travel time, it takes a couple of weeks for the 
water to get from the Devils Lake outlet to the head waters of 
Lake Ashtabula. I also put in the testimony, it takes another 
60 days for that water to move through Lake Ashtabula to make 
it to Valley City, here.
    So as the summer goes along, we see more Devils Lake water 
added to Lake Ashtabula, and we've been--we have monitoring 
points up and down the Sheyenne River and in Lake Ashtabula, so 
we're keeping a very close eye on the water quality and how 
that reacts. And as the water quality does change, if it starts 
approaching--the way we have it set up right now, as Lake 
Ashtabula approaches 400 mg/liters sulfate, we'll start cutting 
back the discharges on Devils Lake to make sure that we stay 
within the water quality criteria for the Lower Sheyenne River.
    So, that's where the outlet's at right now, so we're 
probably--it's probably going to be running at 250 most of the 
rest of this summer and fall, and this all depends upon 
tributary inflow. It, you know, you could operate anywhere from 
60 days all the way up to freezeup at 250 cfs, but it's all 
going to depend on how the tributary inflow that comes in to 
blend with Devils Lake water.
    Some of the other issues--we're very close to keeping up, 
now, with the average--average inflow of, say if we get 240 to 
3,000 acre feet next year, and all the outlets we can pump at a 
rate of 250 cfs, we could get at least 100,000 a year out. And 
that is a significant amount of water. As I explained to you, 
from 1950 to 1992, we only averaged 33,000-acre feet of inflow. 
We will be able to discharge three times the amount of the 
inflow that occurred during those four decades. So, it is a 
significant amount of water.
    But, during this wet cycle, now that the average is up to 
243,000, we're still, you know, we can't quite keep up with the 
amount of water coming in, so it's--evaporation can take, on 
average, 8.5 inches off the lake. The outlet, under operation 
now at 250, can probably take anywhere from 6 to 8 inches off 
the lake.
    So, we can probably take a foot, 14 inches off the lake. 
And looking at this average inflow of 243,000, that's--with an 
180,000-acre lake, that's, like 16-inch rise, on average, every 
year. So, we're getting close to keeping up. So, if we had the 
weather patterns the same from 1993 to 2010, with a 250 cfs 
outlet, if we could run it all of the time, we'd be really 
close to keeping up with the lake. We might need another 150 to 
100 cfs to keep up.
    So, some of the things that we'd like to try to do and have 
the Federal Government help out is trying to increase the 
number of days we can operate, and possibly winter operations. 
Trying to upsize the outlet even larger, so we can get more 
water out the west end.
    The other thing we would like help with is an east end 
control structure, outlet, maybe we can come up with some game 
plan that we can blend west end water with east end water and 
move some more water out that way. So, if we could get some 
assistance there from the Federal Government to try and help it 
get through the NIPA and some of the permitting issues, then 
that would be really beneficial, and funding.
    So, you look at, you know, what you're talking about for 
other things to help--the other big area would be trying to 
reduce the, you know, relax the standards on the Lower Sheyenne 
River and the Red River, too, that would be the other thing. 
So, there's, you know, three key areas, trying to get, you 
know, additional funds, help with permitting and have the 
Federal Government take a look at ways to modify the standards 
downstream from the lower--in the Lower Sheyenne and take a 
look at the Red River, too.
    So, that's the basically the three main areas that, you 
know, the State Water Commission based on the situation that's 
in Devils Lake. Those would also be the areas of assistance 
that we'd be looking for.
    Let's go next to the Chief Environmental Health for the 
North Dakota Department of Health, Dave Glatt.

   STATEMENT OF L. DAVID GLATT, CHIEF, ENVIRONMENTAL HEALTH 
           SECTION, NORTH DAKOTA DEPARTMENT OF HEALTH

    Mr. Glatt. Good afternoon, Senator and Congressman, first 
of all thank you for giving me the opportunity to testify 
today.
    As you had indicated, my name is Dave Glatt and I am Chief 
of the Environmental Health Section for the North Dakota 
Department of Health. Our Department is responsible for 
implementation of many State and Federal environmental 
programs. Through primacy agreements with the U.S. 
Environmental Protection Agency, we implement major elements of 
the Clean Water, Clean Air, Safe Drinking Water and Hazardous 
Waste Acts. I'm here today to address your questions regarding 
what steps the Federal Government can take to assist in 
providing additional flood protection for the Devils Lake 
region.
    I'll address your inquiry from a water quality perspective, 
but please note that my comments are not meant to be inclusive 
of all of the issues associated with the Devils Lake flooding.
    From a water quality perspective the Department of Health 
is well-versed in the issues and in cooperation with other 
local, State and Federal agencies has developed an extensive 
water quality data base of the Sheyenne and Red Rivers, as well 
as Devils Lake. This ongoing data collection effort has enabled 
the Department to, one, anticipate potential downstream water 
quality changes in cooperation with the Devils Lake outlet, and 
two, estimate downstream impacts from various other proposed 
flood control options.
    The State's water quality data has proven extremely 
valuable in the Department's decision to pursue modification of 
the sulfate water quality standard for the Sheyenne River from 
the head waters to just below Baldhill Dam. This modification 
protects the downstream designated uses of the river.
    To address the issues relating to areas of Federal 
participation and cooperation, I propose the following: One, 
the Health Department has recently completed a triennial review 
of the water quality standards for the State of North Dakota. 
This effort seeks to make a permanent change in the sulfate 
stream standard for a portion of the Sheyenne river, as 
previously noted. In proposing the change, an extensive record 
was developed which includes an examination of the Sheyenne 
River, and Devils Lake water quality trends, evaluation of 
other State EPA-approved and Canadian water-quality standards 
and review of technical documents including the Centers for 
Disease Control report regarding sulfate in drinking water.
    In addition to the Department's solicited public input from 
three public hearings and review from the water--North Dakota 
Water Pollution Control Board, the North Dakota State Health 
Council, the North Dakota Attorney General's Office and the 
Administrative Rules Committee. Our record shows a transparent 
public process following applicable science and the law. The 
State has completed its review process and has submitted the 
rule-change package to the U.S. EPA for their review and 
potential approval. We ask your assistance in ensuring that EPA 
expedites it through due process under the timelines 
established in law.
    I say this, Senator, because under the law it says the EPA 
has 60 to 90 days to approve or disapprove the standards. After 
talking to EPA, their comment was, ``Well, we never get that 
time limit.'' I think, because of the issues associated with 
this, they should get that time limit. And we would be more 
than willing to provide any assistance in that area.
    Two, if additional changes warrant all of these standard, 
they should be considered to assist with Devils Lake flood 
relief, they should continue to be based on the best science. 
Because the Red River is a shared water source, any 
modifications to the existing standards will require consensus 
with the State of Minnesota, two EPA regions, Region 8 and 
Region 5, and EPA headquarters. Additional consideration may 
also be required in relation to the Bond Waters Treaty, a 
potential State Department issue involving Canada. I believe 
that the water quality issues associated with a temporary, 
moderate change in the Red River sulfate standard can be 
addressed while still protecting existing, designated uses.
    Finally, as a final request, we would ask for expedited 
review and approval of the most cost-effective flood relief 
option that acknowledges downstream impacts. This may include 
finding ways to move better water quality out of the western 
lake, or other areas in the lake located in the upper portion 
of the basin, expedited Federal review of these alternatives, 
as needed.
    As you said earlier, there is a very marked change in the 
water quality as you go from the west portion of the lake to 
the east, and while we're trying to balance all of the concerns 
and the needs, I think it's prudent that we take a look at how 
do we get water out of the west end so that minimizes 
downstream concerns and impacts. I know that's a concern for 
people in the Devils Lake Basin, because they're concerned that 
you're taking the better water quality out of that lake. But if 
it's truly about flood control, and about getting some relief 
in the Basin, I think we need to take a look at and try to 
balance all of the concerns and, from my perspective, getting 
water out of the west end is the best way to do it.
    As noted earlier, the State has generated significant data 
and gained considerable knowledge of the water quality 
associated with Devils Lake flooding. From our perspective, 
there may be further flood relief opportunities that could be 
explored to balance Devils Lake flooding and downstream 
concerns. Local, State, and Federal entities should pursue all 
options in the true spirit of cooperation to ensure the 
selection of the most balanced remedy.
    I will say that the State does have an Outlet Advisory 
Committee that is staffed by people in--from the Lake Region 
area, and also from people that live downstream. I think that 
is a good opportunity to get those people to the table, and 
really talk about what we can do to find solutions, and what's 
the best way to operate the outlet.
    This concludes my testimony, Senator, and I'd be happy to 
answer any questions you may have.
    [The prepared statement of Mr. Glatt follows:]

    [GRAPHIC] [TIFF OMITTED] T8154.216
    

    [GRAPHIC] [TIFF OMITTED] T8154.217
    

    The Chairman. All right, thank you very much for being 
here.
    Next we'll go to Valley City Mayor, Bob Werkhoven and then 
we'll have a chance for questioning of the entire panel.
    Welcome, Mayor, it's good to have you here.

  STATEMENT OF HON. BOB WERKHOVEN, MAYOR, CITY OF VALLEY CITY

    Mr. Werkhoven. Good afternoon, Senator Conrad and 
Congressman Pomeroy and Governor Hoeven. I'm Bob Werkhoven and 
I'm the Valley City President of the Valley City Commission.
    I'm honored to speak today on behalf of the citizens of 
Valley City and the entire city Commission regarding the Devils 
Lake, its impact on the city of Valley City and what can be 
done to protect Valley City and the entire lower Sheyenne River 
Valley.
    In an ideal scenario, those of us in the Sheyenne River 
Valley would prefer not to have Devils Lake water in the 
Sheyenne River or have to deal with, as has often been referred 
to as the Devils Lake's problem. We've heard arguments and 
theories from many sources on what caused us to be where we are 
today, and while many--if not all--of the arguments and 
theories have some merit, we are beyond the point where we can 
look backward and talk about what-ifs, and we now must look at 
the present and to the future.
    One cannot go to the Devils Lake area and not be 
overwhelmed by the enormity of the situation. Unfortunately, 
the massive increases to the Devils Lake region over the past 
17 years prevent us from considering many options and we must 
now acknowledge that this is no longer a ``Devils Lake 
problem'' but is now an eastern North Dakota problem. The only 
way to solve this problem is for everyone in North Dakota, 
especially those of us in eastern North Dakota, to work 
together.
    With information from the National Weather Service that our 
current wet cycle will not end for several more years, it is 
imperative that a comprehensive solution be devised that no 
only mitigates the effects of the flooding in the Devils Lake 
Basin itself, but also protects those downstream on the 
Sheyenne River from the effects of the increased sulfate levels 
from Devils Lake and provides mechanisms to protect the 
downstream citizens from flooding.
    The Sheyenne River Valley experienced record flood levels 
in 2009 as a result of snow melt, none of which was due to 
Devils Lake issues. So, while we not have additional spring 
runoff, flood-related problems from Devils Lake water retention 
should be planned for the Devils Lake Basin.
    Valley City is the only city on the Sheyenne River that 
uses water from Devils Lake from the Sheyenne River as a 
primary source of drinking water. Through utilization of the 
river as a surface water source and groundwater from Valley 
City Aquifer, which is under direct influence of the river. Due 
to concerns about the impact of additional sulfates in the 
water, the city of Valley City is in the design phase--and I 
want to emphasize design phase--of a project to convert our 38-
year-old water treatment plant from a lime-softening treatment 
plant to a reverse osmosis or membrane treatment facility. We 
are very pleased for the assistance that has been provided 
through the efforts of Senator Dorgan and the U.S. Congress and 
also Governor Hoeven to assist with the funding of this plan.
    Through the U.S. Congress, we received two State and Tribal 
assistance grants of $400,000 each for a total of $800,000; 
$4.6 million of American Recovery and Reinvestment Act funds 
were received in the form of a $2.6 million forgivable loan, 
and a $2 million loan repayable over 20 years with a 1-percent 
interest rate.
    Though these efforts of Governor Hoeven and the North 
Dakota Water Commission has provided a grant of $8.2 million to 
the project. We are currently working with the North Dakota 
Department of Health resolving issues relative to the discharge 
of the wastewater from the treatment process. Construction on 
the project should begin in late 2010 with a projected 
completion date of the end of 2011, which is quite a timeframe.
    The recent proposed rule change allowing sulfate levels to 
reach 750 mg/liter in Lake Ashtabula and up to 1/10th of a mile 
below Baldhill Dam is of concern to us in Valley City. Even 
though the rule states the sulfate levels will not exceed 150 
mg/liter in Valley City, we are concerned that the level could 
increase. If this were to occur prior to the completion of our 
membrane treatment plan, we are concerned about the potential 
health risk to our elderly population, first, students in 
Valley City State University who are transitory throughout the 
year and would have a difficult time adjusting to the increased 
sulfate levels.
    We are encouraged by the commitment of State officials that 
they will reduce the flow from the emergency outlet on the west 
end of Devils Lake when the sulfate levels exceed 400 mg/liter 
in Lake Ashtabula and we're hopeful that commitment will 
continue.
    For catastrophic failure in Stump Lake or a natural 
overflow through the Tolna coulee, we think a dike-type 
structure in this area to alleviate flooding downstream in the 
Basin is critical. Our efforts to make this a reality are of 
paramount importance. A catastrophic failure through the Tolna 
coulee would result in water exceeding 1200--12,000 cubic feet 
per second, which we are advised would bring the water levels 
in Valley City to 10 feet higher than our historic levels in 
2009.
    A recent letter to Lieutenant General Robert Van Akron from 
Governor Hoeven outlines these concerns and we encourage 
immediate action on this request. Any effort the Senate Budget 
Committee can bring forth to fund the next protected measure is 
critical to the protection of the Lower Sheyenne River Valley.
    We, in Valley City are appreciative of the combined efforts 
of the U.S. Congress, State officials and local efforts to help 
Valley City to respond to the water treatment issues in a 
manner that will resulting a treatment plant that will meet all 
present and all future water treatment requirements, while at 
the same time, minimizing the long-term cost to the local 
taxpayer.
    Providing a comprehensive solution to the flooding concerns 
more than the Devils Lake Basin and the Sheyenne River Valley 
must begin immediately with representatives from the Federal 
and State agencies and local communities working hand-in-hand.
    And, Senator Conrad, Congressman Pomeroy, and Governor 
Hoeven, on behalf of the citizens of Valley City, I thank you 
again for the opportunity to present testimony.
    [The prepared statement of Mr. Werkhoven follows:]

    [GRAPHIC] [TIFF OMITTED] T8154.214
    

    3[GRAPHIC] [TIFF OMITTED] T8154.215
    

    The Chairman. Thank you very much, Mayor. We appreciate, 
very much, your being here and your testimony.
    And let's go to questions of the panel. I'd like to start 
with Mr. Sando, and to help us understand better, the situation 
that exists now on the east side of the lake in the Tolna 
coulee area, the lake is roughly at 1452, just below that 
level, the uncontrolled release would occur beginning at 1458, 
is that correct?
    Mr. Sando. In regards to the outlet of the--to the 
elevation at Tolna coulee, it is 1458. Last year there was a 
project done, it was at 1459, they did some maintenance work 
and took the silt out, so the actual overflow elevation, 
officially, is 1458.
    The Chairman. 1458. One of the concerns that has been 
raised repeatedly to me by people in the Valley City area and 
everybody downstream from Devils Lake has been, is there a 
possibility, is there a danger that because of the hydraulic 
pressure there might be a blowout of that area in the Tolna 
coulee below 1458?
    Mr. Sando. To answer that question, the Tolna coulee, the 
material in the coulee has varied, the soil conditions are--
they're weak soils, they're blowing in either by blowing in 
sediment or water-borne sediment, so the materials are not very 
strong. So, there--there could be a potential that the water 
could come out of the lake before it reaches an elevation of 
1458. So, it could blow out at a lower elevation.
    We do have observation wells in place, so we've got wells 
all along the divide in Tolna coulee and we've been monitoring 
that real closely to see if there's a gradiance setting up, 
making it looks like water is starting to move from east Devils 
Lake into Tolna coulee. And right now, the observation wells 
are showing that it's just the ground water level, so there 
isn't a gradient right now, so it's just following the level of 
that.
    The Chairman. So that's the good news.
    Mr. Sando. So that is good news right now.
    The Chairman. And, do we have any sense of, at what level 
that we could face a blowout at the Tolna coulee? For example, 
have your scientists done any analysis of where we reach a 
level of height and risk? Is it 1456? Is it 1457? Do we have 
any idea based on scientific analysis?
    Mr. Sando. Yeah, we have no scientific analysis that has 
determined where it could possible start exiting at an early 
elevation.
    Some of the things we've looked at, the outlet for Tolna 
coulee comes out the southwest corner of east Devils Lake. So, 
on this map, here, it comes--it works its way out--out of west 
Devils Lake, I'm sorry, it comes out around this way and it's 
tucked in this corner over here, so all of the water in Devils 
Lake is driven from Mauvais coulee and coming in from the west, 
northwest, and moves this way. So, when the water moves through 
east bay and east Devils Lake through Jerusalem all the way 
into the west and east Stump Lake, the water would have to take 
a big curve and come out this way.
    So, in a way, it's tucked in a corner, and it's protected. 
Because if you get a northwest wind it's right--some of the big 
problems in Devils Lake is related to wave action and----
    The Chairman. Yeah. That's one of the grave concerns that's 
been raised to me by people in Devils Lake that--and in Valley 
City that, what if you have wave action against that area and 
that erodes the plug that is there now, and could we have 
catastrophic failure at 1456, or--but what you're telling us 
is, the way it's located in a corner, it's less exposed to that 
kind of wave action?
    Mr. Sando. Yes, it's--that's correct. It's less exposed. 
You have to have more of a east wind or a northeast wind for 
the setup and the waves to go out toward Tolna coulee, so----
    The Chairman. OK.
    Let me go to the next question which is the question of 
inflows to the lake, because there is, you know, I've received 
many letters from people in Valley City, suggesting that the 
answer to this is to have more Upper Basin storage. And I must 
say, flying over the Upper Basin, it's hard to see how there's 
much more storage that could be had there. Wetlands that had 
been previously drained have been pretty well filled by Mother 
Nature. I mean, you fly over that, which I did, at the time of 
the summit in May, we flew north for quite some distance, and 
it is extraordinary what has happened in that area over the 
last 6 years. That area is chock-a-block filled with water. 
That's what your review shows, as well.
    Mr. Sando. Yes, that's correct. We've been monitoring the 
situation in the Basin, in fact, we put up a different map, 
here. This is the Devils Lake Basin, that's 3800 square miles. 
And we have this land-sat image--I had it up before--you know, 
this is just, I just have a layer of showing water. And this is 
the purplish color, here, that is Devils Lake, the different 
color purple is Stump Lake and the green is the Chain Lake, so 
it's Lake Ervin, Mike's Lake, Dry Lake and over here, 
Sweetwater-Morrison lake, and all of the other blue is just 
water within the watershed.
    Like I was pointing out, most of the water comes in Mauvais 
coulee, works its way this way. A lot of water mixes from the 
eastern part through Edmoor coulee and comes in through 
Sweetwater-Morrison and works its way through Dry Lake and over 
through Mike's Lake, Chain Lake, through Lake Alice, Lake 
Ervin.
    So, what we're depicting, what we're seeing, and especially 
dealing with the issues north and east of Devils Lake and over 
into Nelson County, if you look over here, we've got huge 
issues with Lake Loretta, issues over in Michigan and 
Petersburg, just acres after acres under water, it's like mini 
Devils Lakes up in this portion of the watershed.
    So, as you can see here, we do have water covering a big 
part of the watershed. In fact, I have a land-sat map, too, 
that depicts what the--I can show you a comparison. OK, this 
little figure, here is this bigger map right here. The map over 
here is before the wet cycle started, so this is a land-sat 
image from 1991. So, it shows--all of this yellow is just land, 
and there's--none of it's under water. So, now, in comparison, 
the amount of water in the basin, just in the Upper Basin, if 
you exclude Devils Lake and the chain of lakes, there's 10 
times the amount of water in the watershed now compared to 
1991.
    The Chairman. Ten?
    Mr. Sando. Yeah. Ten times. Yep.
    The Chairman. It is very hard to get your mind around--I 
mean, unless you go up and go in a helicopter and see for 
yourself, it is staggering, the amount of increased water being 
stored in that Upper Basin now.
    Now, with that said, if we go back to the most recent study 
by the Corps, full study, 2001, and you look at what they said 
was wetlands that had been possibly drained up until that 
point, they came up with 92,000 acres, with a capacity for 
storage of water of 132,000-acre feet.
    Would they, then, recognize, once you fill up that amount 
of storage, you know, there's no more to be had. I suspect, if 
we go back to this study, we'd find much of this has already 
been filled by Mother Nature. But let's just base--based on 
this study.
    They, then, did an analysis based on a 50 percent 
restoration, and they came up with reduction of inflow into the 
lake by restoring wetlands of 15,643-acre feet. 15,643-acre 
feet. That would be the reduction in inflow with the 
restoration of half of the wetlands that have been previously 
taken out.
    Let me ask you this. Fifteen--if they reduce the inflow by 
15,643 feet, your testimony, as I read it, is that the inflows 
have been averaging 240,000-acre feet, is that correct?
    Mr. Sando. That is correct.
    The Chairman. So, 15,000--a reduction of 15,000 would 
certainly help, but it doesn't come anywhere close to solving 
the problem, is that correct?
    Mr. Sando. Right. For every foot of rise it would be, like 
180,000-acre feet, so you divide that by 12, that's not much of 
a reduction off the lake.
    The Chairman. It's not much of a reduction off. That is the 
hard reality, as I see it.
    Let's say the Corps was wrong in their assessment, because 
some people have said they've underestimated the wetlands that 
have been drained previously, so they did an update to their 
study and they doubled the number. That would still leave you 
with only reducing the inflows by 31,000-acre feet--31,000, and 
the inflows have been averaging 240,000. So, that would only 
solve 13 percent of the problem if my math is right, and I 
think my math is right, is that correct?
    Mr. Sando. That's correct. One of the things you point out, 
too, that's a first-time filling. The next go-around the next 
year, some of that storage is used up, it doesn't all evaporate 
down, so you don't have that available storage the next year.
    The Chairman. So, now, if it was possible to have 
additional Upper Basin storage, all of the studies that have 
been done so far by the relevant Federal Government agencies 
and by your agency, because you have looked at this previously, 
is that while it would help us, it doesn't come anywhere close 
to solving the problem, is that correct?
    Mr. Sando. That's correct, yeah.
    The Chairman. All right.
    Congressman Pomeroy?
    Mr. Pomeroy. Mr. Chairman, I just have one question of the 
panel, and I would start with the--just affirming their 
suggestion that folks go up to that Upper Basin and drive 
around--there is water, water, everywhere. I, for one, would 
absolutely wish that there were vast amounts of potential water 
storage capacity and landowners interested in participating 
with the programs we might develop that would elicit a paid 
response for the purposes of storing more water, I don't see 
it. I absolutely don't see it.
    And I'm not a technician, but I think the information just 
put into the record affirms the water storage dimension of this 
is unfortunately limited. The wet cycle has been punishing the 
region, throughout the Upper Basin. A million acres of prevent 
plant along the northern tier of North Dakota this summer show 
you that not just the sloughs are full, the fields are full. 
So, they had to pay off a lot of crop insurance to folks that 
couldn't get their crop in.
    The question I have, Mr. Dave Glatt, the water quality 
issue that the Mayor speaks to, building the water treatment 
plant's going to have an additional capacity and can handle 
sulfates and other issues in the water, and right now that's in 
the design phase, 2 years out from coming online, your 
testimony talked about the ability to use the dam, use the lake 
in ways that addressed water quality issues south of Ashtabula 
Dam, I'd like you to speak to that a little bit.
    Mr. Werkhoven. Thank you, Congressman. What I meant by that 
is, by knowing how the river reacts and the influence from 
Devils Lake and also the natural conditions from the recent 
weather we had, we feel that there is a way we can operate the 
outlet and the dam to minimize downstream impacts.
    I'm not going to say that the water quality isn't going to 
shift, but I think you can minimize that shift to where the 
designated uses such as municipal supply and agricultural uses 
can be protected and still maintained. So, it's just getting 
the people who operate the dam, people who operate the outlet 
knowledgeable of how the system reacts so they can operate it 
in a manner that minimizes the downstream impacts.
    Mr. Pomeroy. And as the--as Mr. Sando testified, the permit 
was granted for emergency change to the level of solids in the 
river system. And so, at that time you made that decision, the 
summer of 2009, this was substantially evaluated by the Health 
Department?
    Mr. Glatt. Congressman, yes, we did have an emergency rule 
change as it related to the sulfate concentration in the upper 
portion of the Sheyenne. We felt comfortable with that from the 
amount of water quality and the testing and the studies that 
have been done on the river. So, we felt that portion--the 
upper portion from the headwaters down to basically Baldhill 
Dam, we were still able to protect all of the beneficial uses 
and designated uses at that point.
    Where we ran into a little bit of a roadblock is that 
because the designated use downstream of Baldhill Dam that, 
right now, is Valley City is for municipal use, we were not 
able to make any changes further down, and that's where EPA has 
to get involved and make a determination whether or not they 
would allow that to happen.
    Mr. Pomeroy. OK.
    Thank you, Senator.
    The Chairman. I would like to go back to this water quality 
issue, because this has significant implications for everybody. 
It's got significant implications for people in the Devils Lake 
area, it's got significant implications for everyone 
downstream--not just Valley City, but right on down, Lisbon 
over to West Fargo, Fargo, right up to Grand Forks. So, all of 
us have a lot at stake with respect to this water quality 
issue.
    The water quality as I understand it in Devils Lake goes 
roughly from, on the west side, about 500 parts per million to, 
on the east side, up to 2500--is that about correct? About 550 
to 2500 from west to east. This is a lake that, in a way is 
like a river in that it has a flow to it. Most lakes, you know, 
when you say to a person, ``This lake has different water 
quality in one part than another part,'' it seems odd to 
people, because most people don't think of a lake having a flow 
to it. This lake does have a flow to it, from west to east, is 
that correct, Todd?
    Mr. Sando. Yes, that's correct. In fact, the west end had a 
water quality last year, 2009, for sulfate levels, averaged 
between 550 and 600 parts per million or milligrams per liter. 
As you move across from west to east, main bay, to east bay to 
east Devils Lake, the salinity levels of TDS and sulfate levels 
go up. In fact, east Devils Lake the sulfate levels are 1,000 
parts per million, and as you said, Stump Lake is 2600.
    The Chairman. And I'm told that at some point in the past, 
before Stump Lake got freshened by the overflow from Devils 
Lake that it had as high a levels as 5,000, is that correct?
    Mr. Sando. To my knowledge, I think it was in the tends of 
thousands, actually. Yes.
    The Chairman. And no fish could live----
    Mr. Sando. Right.
    The Chairman. Do we know at what point we'd face a fish 
kill? What levels of dissolved solids we'd face a fish kill?
    Mr. Glatt. Senator, I don't know the exact number. I mean, 
there were some fish, you know, fish are surviving now in Stump 
Lake and you know, but I think significantly, the higher you go 
with the sulfate concentration, the more stress it puts on the 
fish, it makes them more susceptible to other type of diseases.
    One thing I'd like to point out to you is that as you from 
the west to the east, it's more than just sulfate. And then 
you're going to have issues with things such as arsenic, trace 
metals in the west, but as you go to the east, those 
concentrations also go up and those remain, and in addition to 
sulfate they may be of concern, as well.
    The Chairman. OK, so, there are other issues than sulfates 
as you go west to east. Not a problem in the west, but a 
growing problem as you move east in the lake.
    Here's another thing I got thinking about after yesterday's 
hearing. If we're taking waters out of the west in order to 
reduce affects downstream, what is the potential that the 
sulfates levels in Devils Lake will rise to levels that are 
unacceptable? In other words, if we're taking the better water 
out the west side, what is the possibility, over time, that the 
sulfate levels in Devils Lake will rise to levels that are 
unacceptable?
    Mr. Sando. I'm trying to figure out what order to talk 
about that issue.
    Right now, during this wet cycle, actually Devils Lake has 
been freshening every, you know, because of the inflows and 
we're averaging this 243,000-acre feet of inflow, it keeps 
getting better, and better, and better. So, as the lake rises, 
it has been improving but if the lake starts to become stable 
or starts to decrease in elevation, then the sulfate 
concentrations and TDS levels will start to rise.
    The Chairman. And do we have anything that would tell us at 
what levels those sulfate concentrations would become a 
problem?
    Mr. Sando. Senator, I don't think we have anything such as 
that. I think it's good to keep in mind that we are looking at 
taking enough water out to avoid an east end outlet. And so 
it's not like we're--so, we're not going to be, like, pumping 
all of the water out of lake. So, that tells me--and I think we 
can find the science to back this up, is that the amount of 
water that we would be taking off to avoid the east end outlet 
wouldn't create a major shift in the water quality in Devils 
Lake. Not--especially from what they've seen historically in 
Devils Lake. I don't think we'd be beyond any of those things. 
So, I think we'd still be within an area where we'd see--we'd 
see a good fishery and a good recreational system, but getting 
that flood relief and that concern, take that concern off the 
east end outlet.
    The Chairman. OK, final question, and that is, when we talk 
about sulfates, dissolved solids representing a threat to human 
health, precisely what is that threat?
    Mr. Glatt. Well, Senator, we take a look at what other 
States do allow, and what Canada and also the Centers for 
Disease Control--they did a study looking at what is the 
concerns regarding sulfates? And their conclusion, basically, 
was, there was no relationship between health effects and 
sulfate concentrations.
    That being said, States such as Minnesota said they'd put 
400 milligrams per liter of sulfate concentrations for baby 
formula. Manitoba has a 500 milligrams per liter concentration 
for drinking water. South Dakota has, I think it's 500--not in, 
for a 1-day event, not to exceed 850. So, it's kind of--because 
there isn't a bright line or there doesn't seem to be any 
relationship between sulfate and health effects, the numbers 
are higher, and can be seen higher in the river, without 
adverse health effects.
    The Chairman. You know, when I asked a gentleman for the 
Corps of Engineers a number of years ago, I asked him this 
question because he kept saying to me, we're concerned about 
health effects downstream. And I asked him, ``What health 
effects?'' And at some point he said to me, ``Well, Kent, the 
thing is, at some level, people get diarrhea because of 
elevated sulfate levels.'' Is that correct?
    Mr. Glatt. Senator, from the CDC report, they weren't able 
to do that. And kind of in an odd way, they had people drink 
high-sulfate water and they'd sit around and watch them and see 
how long it took before they ran to the can.
    [Laughter.]
    Mr. Glatt. A real scientific study, but they got the point 
across.
    I will tell you that in the State of North Dakota we have 
several--I think we're in the 30 to 40 public water systems 
that drink significantly higher sulfate concentrations with no 
health effects. And we have some systems that are above 1,000.
    The Chairman. Can I just tell you that I had recommended 
Senator Dorgan for that test?
    [Laughter.]
    Mr. Glatt. I'll take note of that, Senator.
    The Chairman. All right.
    Any other questions?
    All right, let's go to the next panel, if we can.
    Thank you very much to this panel. Appreciate very much 
your hard work. And if I could ask you, Mr. Glatt, if you could 
bring together any of the information that you have that would 
bear on this question of mine with respect--yeah, at what point 
does the reduction in the freshest water coming in pose a 
challenge or a problem, I think that's going to be a very 
important question for us to get answered. That affects 
everybody--that affects people in Devils Lake, it affects 
people downstream.
    All right, let's go to the next panel, if we can, again, 
thank you very much.
    Let me invite the next panel up, Lisbon Mayor Ross Cole; 
Barnes County Commissioner Cindy Schwehr; and Secretary for 
People to Save the Sheyenne, Mr. Richard Betting.
    Welcome, all, good to have you here.
    As they're coming, let me just provide this other piece of 
information because one of the questions that's been raised is, 
what is our evidence that this lake has ever had an 
uncontrolled released? And the USGS did a 4,000-year study of 
the Devils Lake Basin. And they concluded that, as I read their 
information, and it appears to me, at least three times in that 
4,000-year history, we've had an overflow to the Sheyenne. I 
know that others have read this data and concluded that it's 
only twice that there's been an overflow to the Sheyenne, but 
as I look at this chart, it appears to me that three times in 
4,000 years, Devils Lake has gone through this cycle and had an 
uncontrolled release to the Sheyenne.
    It appears to me that seven times in that 4,000 years, 
there has been an overflow into Stump Lake. At least seven 
times, there's been an overflow into Stump Lake, which of 
course has occurred this time. And if you look at the 
trajectory that we're on, only four times in that 4,000- year 
history have we been as high at the lake as we are today. Only 
four times in 4,000 years have we been as high as we are today, 
and it appears to me that three of those four times, it has 
gone over into Sheyenne.
    So, I'd just say, to those who have been hoping against 
hope that this is not going to keep going up, the odds don't 
look to me like that's a very good bed.
    Let's go, next, to Lisbon Mayor Ross Cole, welcome. 
Obviously, Lisbon has a lot at stake, here, as well. They faced 
very serious flooding in 2009 and they would face very serious 
flooding--threat of flooding--if there were an uncontrolled 
release in the future.
    Welcome, Mayor, please proceed.

       STATEMENT OF HON. ROSS COLE, MAYOR, CITY OF LISBON

    Mr. Cole. Thank you for asking me to testify today, this is 
an honor for me to be here and I feel that you guys are behind 
us on this, coming down the stretch. It's definitely a 
disaster.
    As everybody does know in this room that in 2009 we had the 
worst flooding we've every had in the history of the Sheyenne 
or the history that they could keep records. And that was a 
tough one and that was 30 day's worth. Well, they tell me now 
that if this water comes uncontrolled from Devils Lake, we're 
looking at an additional, you know, a cfs coming down the 
river, and how do we prepare for that without the people 
sitting up here?
    We are very much, as a city, we are in favor of a 
controlled outlet of Devils Lake. We're lucky enough, we get 
our drinking water out of wells, so the river water itself 
isn't a real--the quality of the water doesn't bother us quite 
as much as it does Valley City and some of these other places, 
West Fargo, that has to use the water out of the river.
    But, we are--have to get along well with our neighbors, 
too, so whatever it needs to do to get to the point, getting a 
controlled outlet, and then we also are going to need some help 
with flood protection. As these guys know up here, Lisbon--the 
river goes right through the center of our city, and I don't 
know how we can build dikes high enough to save the city, but 
hopefully we can. And with the help of the Corps of Engineers 
and other people, we've done it in the past, and I think we can 
do it in the future.
    I--right now we are in the process of doing a dike, or a 
levy study with the help of the Water Commission and Governor 
Hoeven, he got us some dollars to do some core sampling, and we 
appreciate that very much. It's a start. We need some help with 
some mitigation, as everybody knows in this room, also, that 
FEMA isn't real nice to deal with when it comes time to build 
permanent levies. I don't see the reasoning in that, but nobody 
can seem to tell me what the reasoning in that is, but we're 
going to need help.
    So, that's all I have, I want to thank you for having me 
come today, and I appreciate it. If there's any questions, I'm 
happy to try to answer them.
    [The prepared statement of Mr. Cole follows:]

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    The Chairman. Great.
    Next we'll go to the Barnes County Commissioner, Cindy 
Schwehr, welcome.

 STATEMENT OF HON. CYNTHIA SCHWEHR, COMMISSIONER, BARNES COUNTY

    Ms. Schwehr. Thank you, Senator Conrad, Congressman 
Pomeroy, Governor Hoeven. and all of the visitors to Valley 
City and Barnes County, welcome and thank you for being here.
    On behalf of the Barnes County Commission we want to thank 
you for asking us for the County's perspective on the Devils 
Lake issue. As we've discussed it, as a group, we feel, in our 
opinion that Devils Lake needs to be stabilized as much as 
possible through maximizing the west end pumping station or 
some other type of a structural solution to control the 
discharge year-round, if need be. Best case scenario, of 
course, would be if the water were to be filtered before 
pumping it into the Sheyenne. We feel water from the east end, 
if at all possible, shouldn't be considered as an option to be 
pumped into the Sheyenne. Even though millions of dollars have 
been pledged and committed to a reverse osmosis water treatment 
plant Valley City, we yet don't know the possible negative 
affects that the higher sulfates may have on the life in the 
river, Lake Ashtabula and all of the livestock that drink from 
these bodies of water, and the reverse osmosis system--from 
what we understand--are expensive to operate and we feel the 
citizens of Valley City will be bearing the expense of that 
system, possible until the end of time, even if Devils Lake 
does--is brought under control.
    As a group, we feel that finding and knowing the elevations 
where things must be done is a critical piece of what has to go 
on here. We have a lot of numbers and a lot of elevations but 
would ask that the Federal Government pinpoint exactly where 
are things going to start to happen.
    And as this is all happening, there's no doubt in our minds 
that planning, concurrent planning needs to take place in the 
armoring of the Tolna coulee to prevent any natural release, 
needs to be done as soon as possible.
    From some of the information I've heard and obtained, it 
appears that through the releases into the river and the 
natural evaporation, it seems as if that won't even quite 
stabilize or equalize the situation, and that's not taking into 
consideration the natural moisture we may get through summer 
rains or winter snow.
    A serious concern for the County is, with the increased 
flows into the Sheyenne no matter what level they are, right 
now we are seeing very serious bank erosion, and those 
additional flows, possibly year-round, could be a serious, 
serious issue for the County. We have many rural homes in 
Barnes County and farms that have been here for generations 
that are in danger now, and the additional water moving will 
expedite the erosion, and we do fear that it would cause near-
disaster situations in the county. As a County, we have moved 
one road in the last couple of years in the Valley, because the 
river was taking the bank and was going to take the road right 
with it.
    Upper Basin retention, as I've listened today, it doesn't 
sound like there's a lot of room, but I think it has to 
continue to be studied. And as a Federal or local government, 
we can't reasonably expect any landowner to bear the expense of 
retaining water that they legally drain without being 
compensated to do so. And we all know taking of private 
property for public use is an uncomfortable process, and 
hopefully one that we don't have to look at.
    At the beginning of this year, the Barnes County Commission 
asked the State Health--the North Dakota State Health 
Department for a comprehensive study as to what's--the effects 
of the sulfates and everything that comes down the river with 
that water. And I don't know yet if that's been completed, the 
actual request for it was for an out-of-State, non-partial 
firm.
    I guess we ask that as you--as we--work to solve the 
problems of the Devils Lake Basin that we continually keep in 
mind the potential problems this is going to create for the 
downstream communities, and I believe that you are. You're here 
today, that means you're--you are concerned about what's 
happening downstream.
    A common thread between everyone, we all know, would be a 
Godsend and right now I don't think it's happened, but I think 
together we can find a common thread and word as a region to 
solve the Devils Lake issue, because as you said, it is an 
eastern North Dakota issue, it's not just a Devils Lake issue 
any further.
    Again, thank you for allowing us to be here, and welcome.
    [The prepared statement of Ms. Schwehr follows:]

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    The Chairman. Thank you very much for your testimony.
    And now we'll hear from Mr. Richard Betting, Secretary for 
People to Save the Sheyenne.
    Welcome, and please proceed with your testimony.

  STATEMENT OF RICHARD BETTING, SECRETARY, PEOPLE TO SAVE THE 
                            SHEYENNE

    Mr. Betting. Thank you. Thank you for the opportunity to 
speak on behalf of the downstream Sheyenne River landowners, 
water users and of all those who are concerned with--and 
affected by--the methods that will be chosen to deal with high 
water on Devils Lake.
    There are a number of aspects of this issue that I'd like 
to talk about, and I have handed in some data and so I'm going 
to skip around and try to cover as many as I can in a short 
period of time.
    The three-legged stool has been mentioned, and water 
retention is what we would like to advocate, primarily. We 
define water storage as a restoration of wetlands, not water 
already in the lake, and so we think that the drained acres in 
the Upper Basin, which are extensive, in some cases would be--
could be used for water storage so that the water would be 
prevented from ever getting to the lake in the first place. 
Now, I'll come back to that one in a second.
    One, I want to start with, here's the subject how to deal 
with water and do it in the best possible way and hurt the 
fewest number of people. It seems to me that one has to wonder 
why Federal agencies were asked to come up with an answer to 
the water problem on Devils Lake when the best engineers in 
North Dakota, as well as the U.S Army Corps of Engineers and 
others, could not provide one. Could it be because some people 
are looking for a political solution to an environmental 
problem?
    The ``solution'' water managers and politicians seem to be 
seeking is divine intervention, or at least an ``executive 
exemption'' from EPA, Corps, State and Federal rules. With some 
kind of administrative approval, someone could put as much 
water as they wanted into the Sheyenne River through both east 
end and west end Outlets.
    The irony is that they want to destroy the Sheyenne River 
in order to save it, and they want us to agree to its 
destruction. And afterwards no one would be responsible for the 
destructive downstream ecological impacts that resulted.
    Can outlets solve the problem? We don't think so. Last year 
587,000-acre feet came into the lake. If the outlet pumps at 
250 cfs. It will take 7 years to remove that. Evaporation will 
take off thirty inches a year, that helps. A little over 
thirty. I believe Mr. Sando used the No. 8, that's another 
difference in definition. He was talking about net evaporation. 
Evaporation always takes off thirty or so inches. Net means 
subtract precipitation, and then you get eight inches net, 
because precipitation from 1993 to 1999 in the Upper Basin of 
Devils Lake averaged about 21 inches, about four more than it 
had prior to 1989. But evaporation takes water off every year, 
year after year.
    We think, before I get into restoring drain, wetlands--
another issue is that, is there a crisis? If you look at the 
last chart of the Devils Lake Heights--I don't have enough to 
hand all of these out to everybody, but I handed out some, you 
will see that in 2004 the lake rose to 1449, for the first 
time, 1449 feet, 2004. This year it's 1452. In effect, it went 
up three feet in 6 years. It was at 1448 in 2001. In other 
words, it went up four feet in 9 years. It was at 1447.5 in 
1999. In other words, it went up 4.5 feet in 11 years.
    So, be careful with numbers. If you make the jump from 
where it used to be in 1993 all at once, it sounds like a lot 
more than looking at it just in the last few years.
    Where do we think that came from? We think that as many as 
358,000 acres have been drained in the past 50 years. That 
means that many of those drained acres, when they got 
precipitation on them, the water flows and collects in the 
coulees, as someone had the map up earlier, the coulees all 
across the Upper Basin of Devils Lake from Edmore Coulees, over 
the Starkweather Coulee, the Mauvais Coulee to the west, in the 
spring flow higher than the Sheyenne. Last year, inflows from 
the Upper Basin totaled 587,000 acre feet, and the coulees 
flowed at two to three thousand acres--acre feet--or cubic feet 
per second, while the Sheyenne, at the same time, was flowing 
less than that. So, they flow like rivers.
    Once they get to the basin, there's nothing that you can do 
with them. People talk about managing water in the basin, once 
it's in the basin, it can't be managed. All you can hope for is 
evaporation.
    So, it seems to us that the only practical, long-term 
method of dealing with the rise Devils Lake is to prevent water 
from drained wetlands from reaching the lake in the first 
place. Once in the lake, water management is no longer 
possible. People in the Devils Lake Basin say that their water 
is everybody's problem, now. If that's the case, we insist on 
using restoration of drained wetlands as the next approach.
    One of the reasons we object to West Bay water is, as has 
been mentioned, the water quality is very poor. That's one of 
the reasons the outlets have not been able to operate, and 
did--they only began operating a year ago, in fact, in July, 
when they raised the standard from 450 milligrams per liter to 
750 milligrams per liter of sulfate. Along with the other 
contaminants in West Bay are also bad, including total 
dissolved solids, calcium, magnesium, sodium, arsenic, 
phosphorous fluoride, and so on, which add to. One of the 
panelists was talking about, well, what will that do to the 
ecology of the river? We don't think that all of the 53 species 
of fish in the river will be able to reproduce. Live? Maybe. 
But reproduce hasn't been demonstrated. We don't think that the 
eight or nine species of mussels in the river will be able to 
reproduce, because the fluoride is so high. Are there mussels 
in Devils Lake? So, the damage to the Sheyenne is, and could 
be, extensive.
    The U.S. Fish Hatchery is just north of town--I'll find the 
right page. Concerning the U.S. Fish Hatchery north of Valley 
City, the U.S. Fish and Wildlife Service went on to say, ``The 
hatchery's water source from the Sheyenne River will likely be 
unusable, therefore the hatchery would need to obtain a source 
of fresh water in order to operate.'' Furthermore, it's 
unlikely that the hatchery will be able to maintain its ability 
to provide fish to the State of North Dakota.
    Mr. Glatt said the beneficial uses of the Sheyenne River 
will be maintained. In 1999, when Devils Lake was going to 
breach Tolna coulee and put it in the Sheyenne River, they 
asked the Health Department to tell them what the effects would 
be. At that time, Francis Schwindt was the water quality and he 
said the project of digging the ditch through the Tolna coulee 
would be extremely complex from a water quality perspective, 
the water quality parameters that are of concern would be total 
dissolved solids, sulfates, chlorides, copper, lead, arsenic, 
selenium, boron, ammonia and nutrients, and that he ended up 
saying, ``The designated beneficial uses of the Sheyenne River 
would not be maintained; these include municipal water 
supplies, aquatic life, irrigation, industrial water supplies 
and recreational.''
    And so we would think that in order to decide what to do 
next, a thorough and scientific study of the number of, acres 
of, drained wetlands in the Upper Basin ought to be determined, 
first of all, probably using lieder. No one has done this yet, 
we don't have those numbers. How much water comes into the 
lake, how much could be retained by restoration of Upper Basin 
drained wetlands and how much that would effect the lake's 
total height. And so, until those things have been done, we'd 
prefer not to see water coming out of Tolna coulee and the east 
end outlet, and no more out of West Bay.
    Thank you.
    [The prepared statement of Mr. Betting follows:]

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    The Chairman. All right, thank you.
    Mr. Betting, if I could just go to you, you pointed out, 
correctly, that the lake has had very little increase from 
roughly 2002 to 2008. But, isn't it true that during that 
period that the reason there was no rise in Devils Lake is that 
it was going over into Stump Lake, and Stump Lake went up 43 
feet?
    Mr. Betting. Yes, that's partly true.
    [Laughter.]
    Mr. Betting. But, if you look at Stump Lake, you also see, 
in quantity, in terms of quantity, it can't quite compete with 
the number of acre feet stored to West Bay.
    The Chairman. No, that's certainly true. But, I think, you 
know, as we look at this, the reality that we confront, here, 
is while the lake didn't go up for an extended period of time, 
in fact for 8 years, from 2000 to 2008 we didn't see an 
increase, but a central reason was it was going over into Stump 
Lake and filling up Stump Lake.
    Here's the question that is most on my mind that I'd like 
to direct to you, Mr. Betting. When we look at the USGS data 
and they've looked at 4,000 years, they have found that there 
was a release in the Sheyenne during that period of, it appears 
to me, three times. The first time, about 4,000 years ago, and 
the next time about 2200 years ago, and the next time about 
1,000 years ago. And if you look at the trajectory we're on, 
there was one other time that looks to be about five or 600 
years ago that the lake was on the trajectory, went over into 
Stump Lake, but didn't go into the Sheyenne. And the trajectory 
we're on is the same as each of those times where it's gone 
into Sheyenne, or at least filled up Stump Lake. That is, we 
are now higher than any of the times, other than the three 
times that it went into the Sheyenne, uncontrolled.
    And that tells me that we're in a historic pattern, and 
that the odds are sufficiently high that it represents an 
unacceptable risk for everyone--not just the people in Devils 
Lake, but for the people here, the people in Lisbon, the people 
in West Fargo, the people in Fargo. Is it your belief that the 
lake won't continue to rise?
    Mr. Betting. The lake is influenced, now, by the results of 
drained--the water from drained wetlands which never had 
occurred in the past. And so when you get a half million acre 
feet of water coming into the lake in the spring of the year, 
you would have to ask, how much did the drained wetlands add 
that would not have been there in a normal year, or normal 
cycle and I believe that the addition of those drained wetlands 
is considerable, and that the lake would not have risen, as it 
has, in the last 25 or 30 years, without it. The hundreds of 
thousands of drained acres that allowed that water to go 
immediately--if water falls in the Upper Basin today, there are 
no 300,000 acres of wetlands. They're--they have a ditch out of 
them. No water stays there. Drained wetlands do not hold water. 
So, all of that water goes--collects in the coulees, goes in 
the coulees into the lake, very rapidly. And so that's why, 
when you're talking about flying the Upper Basin--please allow 
me to hand out four pictures that I'm going to submit to--I'd 
like them back at the end because I want to submit them as 
testimony--but if you look at those pictures, no, go ahead and 
look at them as you pass them down, I don't have any more. If 
you look at those pictures, and you can see, for miles, that 
the drained wetlands are now farm. Thousands and thousands of 
acres of drained wetlands are now farms.
    If you look at Google Earth, and I just found out how to do 
that, if you look at Google Earth and you go up in the Upper 
Basin, and you enlarge the sites so that you can see every 
section of land--every one--you can see the drains. If you go 
up along, from Highway 1 on the east over to Rowell on the 
left, the Mauvais coulee, you can go up there and see section 
after section, drained.
    And I'm not saying they're illegal or anything. All I'm 
saying is, if the situation in the lower basin of Devils Lake 
is serious enough so that you ask--we ask, together, those 
people whose lands have been drained if they will retain water 
on that land with gated--with gates, to open and close them 
when the water is need it, let the water out, it's kind of like 
a version of the waffle plan. When the situation in Devils Lake 
gets that serious, we should consider it. And I think we've 
reached that point.
    And so what I'm saying is, will it rise? The result of the 
drainage is almost inevitably going to mean that more water 
comes in, and it will rise faster, and sooner.
    The Chairman. All right, here's the question I was trying 
to get at. Before there was any drainage of wetlands, 1,000 
years ago, 2200 years ago, 4,000 years ago, this lake went 
through a cycle, the scientists tell us, where there was an 
uncontrolled release of water out of the east end. That was 
before any drained wetlands. And when I look at the pattern 
from USGS of this current cycle, it is just closely matching 
what has happened in those three times, before there was any 
drained wetlands, that led to an uncontrolled release.
    So, isn't it possible, I would say to you, that even though 
a drained wetlands--no question they contribute to the speed at 
which it may occur--but isn't it possible that we are in a 
weather cycle--whether drained wetlands or no drained 
wetlands--we would have an uncontrolled release of water out of 
the east end?
    Mr. Betting. I guess I'd have to agree, of course, it's 
possible.
    The Chairman. The second point I'd make to you, in the most 
complete study that I've seen that has been done, it was done 
in 2001 by the Corps, on the question of how much of a 
contribution do the wetlands, the drained wetlands make to the 
inflows to the lake? What they concluded is that 92,000 acres 
were possibly drained with a capacity of 132,000-acre feet. 
That's on page 6 of the study that was done in 2001.
    Mr. Betting. By the West Consultants, yes.
    The Chairman. By--that's the so-called ``West Study.''
    Mr. Betting. Yep.
    The Chairman. Daniel Rhineharts made that study and when 
they went--so, page 6, they talk about possibly drain 92,000 
acres. They then convert that on page 15 into how much that 
leads to an inflow--additional inflow--into the lake. And they 
say, if you restored 50 percent of those wetlands, you would 
save 15,643-acre feet going into the lake. That's up against an 
inflow that we've averaged, since 1993, of 240,000 acres.
    So, let's say the West study is wrong. Let's say they 
underestimated the acres. Let me just conclude this point and 
then I'll give you all the time you want to respond. Let's say 
they were off by 100 percent. Let's say, there were double the 
amount of acres that they estimated. That would still leave you 
with only 30,000-acre feet that you're averting coming into the 
lake when we've got a problem of 240,000-acre feet, on average. 
And as you, correctly, pointed out, nearly 600,000 that came in 
last year.
    The point I'm making is, certainly restoration would help, 
and it's something we've got to explore, that's why we have 
asked the working group to go back and explore additional Upper 
Basin storage, but it just seems so striking to me that doesn't 
come close to addressing the problem that we confront today.
    Mr. Betting. Well, you're right.
    The Chairman. Let me just ask you to wait for 1 minute, 
because they need to change the tape for the transcriber, and 
then----
    [Recess.]
    The Chairman. So, they've told us--this is the first I've 
heard of this, but they have asked us to be out of this room in 
15 minutes, so please.
    Mr. Betting. Yes, everybody's planning to hop on the 
elevator.
    Yes, you're exactly right. West Consultants even said, 
about their own study, the results of this study indicate that 
restoration can reduce the volume of runoff entering Devils 
Lake. Further studies should be conducted to more accurately 
quantify runoff reduction. They did not do an on-the-ground 
study, they did not use current data, and they did not have 
anything like lieder available to them. So, the best that they 
could do was with what they had.
    They did summarize and say that the West Report estimates 
total wetlands at 115,668, with 52,210 possible drained; 
115,000 possible wetlands, not acres, wetlands. And 52,000 
possibly drained. Well, if there's an average of five acres 
each, even, that's a considerable number.
    So, yes, we could argue a long time about--and my point is 
that we don't have the kinds of numbers that we would need in 
order to make those decisions.
    The Chairman. Yeah, and that's why we've asked them, 
because technology has improved, and we've asked them to go 
back because it's in all of our interests to find the best set 
of solutions. And, you know, frankly I hope against hope that 
what you think would be the case. I just don't see it in the 
evidence.
    When the West Study was updated in 2008, here's what they 
concluded. Upper Basin storage does have the potential to 
change the timing and probabilities of increased lake levels. 
However, with the potential for acceleration in the lake level 
rise, as observed between 1993 and 1999, Upper Basin storage 
would not preclude the need to implement flood risk management 
actions at the city of Devils Lake should the lake level 
continue to rise. And, of course, we know since 2008, indeed it 
has risen, another 3.5 feet in the next year, it's going to 
rise again this year. And here's their conclusion. ``Overall 
effectiveness of this alternative is considered low.''
    I just have to say to you, looking at the historic record 
as given to us by USGS. Three times in 4,000 years this lake 
has had an uncontrolled release out of the east end before 
there was any drainage of wetlands. And the studies that have 
been done by the Corps that say they believe the effectiveness 
of Upper Basin storage, on its own, the effectiveness of that 
approach is low, tells me that we've got to think about more 
than just that.
    Mr. Betting. Could I ask one question?
    The Chairman. Sure.
    Mr. Betting. When you're talking about east and it's our--
it's everyone's question. When you're talking about east end or 
Tolna coulee outlet--what does that mean? Are you digging it 
down? Yes or no.
    The Chairman. You know, I think it--they're----
    Mr. Betting. We're for armoring it where it is. But, dig it 
down? Yes or no. Don't answer. If you do--dig it down two feet, 
four feet, six feet, what you get is a lake that will overflow 
at two feet lower, and four feet and six feet lower. If the 
lake ever reaches that level, it will run through completely, 
automatically without control. But to lower it, to me, means 
you're wanting it to happen sooner, which is what Devils Lake 
did. And that's not quite acceptable.
    The Chairman. You know, I think when you ask the question, 
what is in the mind's eye of people with respect to an east-end 
outlet, you get a lot of different answers. There are some 
people who see it as a way of having a controlled release, so 
that we don't suffer an uncontrolled release with the 
consequences that have been discussed here.
    A second view is, by some, that you lower it, so you take 
off water earlier to try to have less of an effect. So, you 
have different views of what constitutes a west-end structure.
    But, I would say in Devils Lake, you have many people who 
believe they would like to have it lower so that the lake can 
be fresher. And that's a view of many in the Devils Lake basin, 
I think we heard that loud and clear when we were in Devils 
Lake.
    I think what we've heard here, today, is that from Mr. 
Glatt, representing the Health Department, that we would be 
better off taking water from the west end, where it's of much 
higher quality. And, of course, that's where the State's outlet 
is today, as you well know.
    Mr. Betting. What's a control structure? In order--if the 
lake ever reaches the level that it's going to go over the 
coulee, at whatever level that is, if there's a control 
structure--which one do you want first--if there's a control 
structure, the control structure has to be bigger than Baldhill 
Dam. Because if any water comes from the Upper Basin in the 
quantities like it did last year and a few years ago, you can't 
hold 500,000-acre feet back with a small burm, there ain't no 
way. The dam would have to be as--half as tall as this room and 
all the way across or it couldn't hold the water back.
    And so what I'm saying is, whatever level you choose to 
make the over--the spill level, it'll either come straight over 
Harden coulee or if you're putting a control structure in, it 
would have to be bigger than the overflow level in order to 
hold water back from the 14-foot. It wouldn't even have to wash 
out to be, then, high-level overflow.
    The Chairman. OK, that's a fair point.
    Let me just say to you, that what we have underway is an 
analysis by all of the relevant Federal agencies in 
consultation with the State, in consultation with local 
officials--many of those consultations will be occurring in the 
weeks ahead to try to determine what set of options is the 
best, for everyone--upstream, downstream, Devils Lake, Lisbon, 
West Fargo, Fargo, and I don't think anybody should reach a 
conclusion yet before we have the best analysis.
    One of the things we've asked them, and the delegation send 
a letter asking them, go back and look at Upper Basin storage. 
Is there an opportunity--I'll tell you, this from my 
observation looks to me like Mother Nature has done a big job 
of filling in the wetlands and restoring wetlands. Does that 
mean there aren't some that are still there that could be 
useful? That's why the study is requested.
    Let me just say--how much time do we have before we have to 
be out?
    Male Speaker. Five minutes.
    The Chairman. Five minutes. Well, I'll give two and a half 
minutes to the Congressman and two and a half minutes to the 
Governor.
    Mr. Pomeroy. Thank you, Senator Conrad. In sensitivities to 
this birthday celebration, I won't engage in questions of the 
panel, I appreciate the panel and appreciate, obviously, they 
offer views that are different from other views that have been 
expressed, and so to commend you for doing that, you're 
encouraged to speak your beliefs.
    I disagree with you. I disagree with you completely and 
believe that the testimony just does not reflect the 
recognition of what's happened, even over the last 17 years. I 
mean, if this might have been a view plausibly held 17 years 
ago, we've had 30 feet of lake rise during the period of time 
where there has not been extensive additional drainage 
occurring throughout that region. Additionally, we have 
historical data that shows pre-civilization this thing 
overflowed.
    It's certainly a natural tendency to want to find quick and 
simple answers and yet in really complicated problems, that 
rarely is available.
    Certainly, I've spoken some in the early days upstream 
that, they had this, ``Gosh dang, we drained this bathtub,'' 
but no, that wasn't going to be possible, under the complicated 
nature of these circumstances. And to my hometown I would say, 
it isn't possible to say, ``This is Devils Lake's deal and they 
can just find places to put that water and deal with it,'' that 
is no more possible than to drain the bathtub. We have to find 
our way with this mix. The Governor's outlined the strategy the 
State has initiated and supported with the Federal funding and 
the Federal efforts, retention where possible, mitigation as 
required, and now taking some of the water off the lake to 
mitigate the risk of uncontrolled spillover--there really isn't 
any other way around it.
    And, yeah, as we try to define these strategies, we're 
going to have the best help available to senior agencies and 
jurisdictions, but I believe that constructive thinking from 
the folks on the ground, the real experts, are going to move 
that project along, or that process along in a very, very 
helpful way.
    So, thank you, Senator, for holding this hearing.
    With that, I want to thank all of my hometown friends for 
participating.
    The Chairman. Governor?
    Governor Hoeven. Senator, good to be here with you. 
Congressman, Earl, good to be with you, as well.
    I want to thank all of the other elected officials that are 
here, as well as all of the citizens that are here, for being 
here.
    And I'm going to go back to where I started, and that is, 
we've got to work together on this one and as I listen to the 
testimony here today, I mean it, again, it convinces me we've 
got to work together on this challenge.
    I see a number of legislators, here, I see Senator 
Robinson, I see Representative Kurt Onstad back there, I saw 
Representative Dennis Shatson, I thought I saw, earlier, 
Representative Metcalf, I may be missing some, but Mayor 
Werkhoven, Mayor Coles, former mayor, Mary Lee Nielson, 
Commission Schwehr, other Commissioners. We've got to work 
together as elected officials, but we've got to work together 
as citizens of this State.
    And I, you know, since we're talking about funding, it's 
kind of like having a boat. And if we're in the boat, and we're 
wrong, we've got Upper Basin, we've got the people in Devils 
Lake, we've got Lower Basin. If one's rowing, I guess you can 
make some progress. If two are rowing you can make a little 
more, and if all three are rowing you do a lot better, don't 
you? And particularly if they're rowing in a coordinated way, 
working together.
    So, go back to, do we need to store water in the Upper 
Basin? Sure we do, and we area. Hundreds of thousands of acres 
of feet. There are farmers in this room that don't have a farm 
anymore because they're under water. That's pretty tough. So, 
we're storing--we're storing a lot of water.
    And I mean it, don't just take somebody's word for it, go 
take a look, honestly. Go up and take a look at the size of a 
lake that's grown from 49,000 acres to 180,000- plus acres, 
look at all of the water around it--we're storing a lot of 
water.
    We're building a lot of roads, I mean, it's going to take 
you a long time, by the way, to get around up there, because 
every single highway is under construction with rip-rap and 
raising them and resurfacing them. And some of these county and 
township roads are under water, you can't drive on them. And 
we're building up dikes, so you're going to say a lot of 
construction--road construction, building up dikes--we're doing 
a lot of that. And we've got to let some--we've got to bring 
some water out, too.
    And the thing is, to do it the right way, to help prevent 
more flooding up there, and to protect you downstream, we've 
got to bring it out in an orderly way. We can't do it in 1 day 
and 1 month or 1 year, we've got to bring it out over time, 
guys--that's how we manage it the best way.
    It used to be everybody was talking biota--but we've 
studied and studied and studied, we can't find any biota 
difference between Devils Lake and the Sheyenne and the red, 
OK? So, now we're talking about sulfates. But, remember, the 
Canadian drinking water standard, if you're going to go drink 
the water, untreated, the Canadian drinking water standard is 
500 milligrams per liter, 500 parts per million. So under--take 
some time to understand this sulfate issue and, you know, how 
big of an issue it is or it isn't, take some time with that and 
remember that Devils Lake is one of the greatest walleye 
fisheries, when you talk about fish and aquatic life, 
remember--go up and fish Devils Lake, it's a great place to 
fish walleye.
    So, when we're talking about Devils Lake versus the 
Sheyenne versus the Red or all of these, go up there, spend 
some time fishing, and, you know, while you're doing that, talk 
to your friends and neighbors up in Devils Lake, and for our 
friends and neighbors up in Devils Lake, spend some time 
talking to our folks in the downstream.
    I have great belief in North Dakotans. I think around the 
country, people are taking notice of the great work North 
Dakotans are doing, and so I have great belief that you'll come 
together on this--continue to come together on this, and it's 
communicating it, and then it's working on it together, and 
that's what we need to do.
    Thanks for being here today, have a great weekend.
    Senator Congressman, thank you so much for being here with 
us, we appreciate it.
    The Chairman. Thank you, Governor for being, thanks to the 
entire panel. Let me just say, I even caught a fish in Devils 
Lake.
    [Laughter.]
    The Chairman. I held it up to have a picture taken, 
Governor, so that we could have a record that I caught this 
fish. It was a very large fish.
    [Laughter.]
    Governor Hoeven. Oh, there we go, say is this on the 
record, by the way?
    The Chairman. When that fish saw the water, it was right 
back into the lake. And I immediately said that I was part of 
the Governor's catch and release program.
    [Laughter.]
    The Chairman. Let me just say this--to people who came here 
hoping to make an additional statement or ask a question, in a 
hearing format, we can't take questions. An official hearing 
doesn't work that way. We could have taken--and I looked 
forward to, I thought we were going to have the opportunity to 
take additional statements on the record. Because of this 
birthday situation that I was unaware of until 15 minutes ago, 
we can't stay in this room.
    We can do this. I will hold the hearing record open for 10 
days. So, anybody that wants to contribute a statement for the 
record, we will hold the record open for 10 days to accept your 
statement. If anyone has questions, they can submit them back 
to my office, and we will be happy to answer them. Third, we 
will be back, this is not the last meeting, not the last 
opportunity to ask questions or to be heard, because we know 
this is something that's way too complicated to deal with in 
just one meeting. We've already had many, many meetings over 
the years in Devil's Lake, we're going to have to have 
additional sessions in this community and other communities.
    Mayor, we need to come to Lisbon. We also need to have 
additional sessions in West Fargo and Fargo, because they are 
affected by these decisions, as well. Senator Dorgan has 
already had a water quality meeting in Fargo, but we're going 
to need to do additional sessions there. So there are going to 
be additional opportunities to be heard for everyone.
    Again, I apologize. We--I did not know that they had 
reserved this room for a 90th birthday but, Richard, as you 
said, when you get to 90, you really can't wait.
    Mr. Betting. You didn't have to exaggerate.
    [Laughter.]
    Mr. Betting. And did you know, Fargo was using the Sheyenne 
River water yesterday?
    The Chairman. Oh, they were?
    Mr. Betting. Yep.
    The Chairman. I know that is their backup source.
    All right, the hearing is concluded.
    [Whereupon, at 3:46 p.m., the hearing was adjourned.]

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    FIELD HEARING DEVILS LAKE FLOODING DISASTER: A RED RIVER VALLEY 
                              PERSPECTIVE

                              ----------                              


                        Monday, August 16, 2010


                                        U.S. Senate
                                    Committee on the Budget
                                           West Fargo, North Dakota
    The Committee met, pursuant to notice, at 9:05 a.m., at the 
Vector Conference Room, Cass County Highway Department 
Building, 1201 Main Avenue West, West Fargo, North Dakota, Hon. 
Kent Conrad, Chairman of the Committee, presiding.
    Present: Senator Conrad [presiding].

              OPENING STATEMENT OF SENATOR CONRAD

    The Chairman. The hearing will come to order.
    I want to welcome everyone this morning to this hearing of 
the Senate Budget Committee.
    And I want to welcome Governor Hoeven, who is joining us 
today. Welcome.
    Governor Hoeven: Senator.
    The Chairman. Good to have you here.
    Governor Hoeven: Thank you.
    The Chairman. I want to emphasize that this is an official 
hearing of the Senate Budget Committee, so we will be operating 
under the rules of the United States Senate. An official 
transcript is being kept of this hearing.
    The title of this hearing is the ``Devils Lake Flooding 
Disaster: A Red River Valley Perspective.'' I want to begin by 
introducing our distinguished witnesses today. We will have two 
panels. We'll first hear from the Governor, and then we'll have 
a chance to hear from the other witnesses that are part of the 
first panel: Dave Glatt, the chief of environmental health 
section of the North Dakota Department of Health; West Fargo 
Mayor Rich Mattern; and Fargo Mayor Dennis Walaker. Our second 
panel will include Darrell Vanyo, chairman of the Cass County 
Commission--good to have you here, Darrell; and Steve Burian, 
chief executive officer of Advanced Engineering and 
Environmental Services, Incorporated.
    I look forward to hearing from each of you on what steps 
should be taken to address the flooding disaster in Devils Lake 
and the effects of that flooding downstream.
    Since 1992, Devils Lake has risen nearly 30 feet. It's hard 
to fully appreciate how a lake of that size could rise 30 feet, 
but that's what has happened. Tens of thousands of acres of 
productive farmland have been consumed, and hundreds of homes 
have been moved. The transportation network, including the 
roads and rail line, has been disrupted, and the local economy 
continues to take a hit.

[GRAPHIC] [TIFF OMITTED] T8154.390


    Last year alone, the lake rose 3 and a half feet, and this 
year it reached a record elevation. Devils Lake is now within 6 
feet of the natural overflow. Let me just say, an uncontained 
release, an uncontrolled release, of water would have 
devastating consequences, not only for the Devils Lake Basin, 
but for every city and town downstream. Finding solutions to 
prevent an uncontrolled overflow is in everyone's best 
interest.
    Experts tell us that the wet cycle in the Basin will likely 
continue for years. There is no way to predict exactly when a 
normal cycle of drier conditions might return. There is, 
according to the projections, a 72-percent chance that the wet 
cycle will continue for 10 years or more, a 37-percent chance 
it will continue for 30 years, and a 14-percent chance that it 
will continue for at least 60 years. Simulations show a 
substantial risk the lake will reach the spill elevation of 
1458 feet. An uncontrolled release of water would cause 
significant damage downstream. The quality of water released 
would be extremely high in sulfates, five times worse than if 
the release of water were to occur from the west end of the 
lake. This is one thing that's hard to get your mind around, 
but the quality of the water in this lake is not even 
throughout the lake. The water quality out of the west end is 
much higher than the water quality out of the east end. And if 
there is an uncontrolled release of water, it will come out of 
the east end.

[GRAPHIC] [TIFF OMITTED] T8154.391


    The reason there is different levels of water quality in 
this lake is because there is a natural flow to the lake. The 
fresh water comes in on the northwest, and then there is a flow 
to the lake, moving to the east. That is why there is such a 
dramatic difference in the water quality out of the east end 
compared to the west end.
    Drinking water systems drawing from the Sheyenne River 
could be impacted if there was an uncontrolled release of 
water. Discharges from Lake Ashtabula could be nearly twice 
what was experienced during the flooding of 2009. Twice what 
was experienced during the flooding of 2009. And some 
properties would be flooded for an extended period of time, 
making it almost impossible for recovery.

[GRAPHIC] [TIFF OMITTED] T8154.398


    There are a number of unresolved issues for the Red River 
Valley. For example, how would the region be impacted by 
floodwaters from an uncontrolled release of water? How would 
the drinking water supplies be impacted in an uncontrolled 
release? Could existing water systems handle a temporary 
increase in sulfates in the lower Sheyenne? What are the 
operational costs to address increased sulfates? What new 
treatment plants would be needed? And what would be the impacts 
on the fishery? I'd like to use this hearing to address all of 
these issues.

[GRAPHIC] [TIFF OMITTED] T8154.411


    When the flooding disaster began, we worked cooperatively 
on a three-pronged strategy: upper basin storage, protecting 
infrastructure, and construction of an outlet. It's a strategy 
that we have pursued aggressively.
    We have secured more than $700 million of Federal resources 
that have been allocated, so far, to protect the region. Keep 
the road network intact, over $400 million has been spent since 
1995. FEMA has spent $84 million, since 1993, on repairing 
damage to public infrastructure caused by the rising lake, 
relocating threatened structures, and buying out Churchs Ferry. 
The Corps of Engineers has spent $200 million since 1993 on the 
levee protecting Devils Lake; and, without that Levee, and 
without the rises in that levee, Devils Lake would be under 
water today.

[GRAPHIC] [TIFF OMITTED] T8154.384


    HUD has also provided more than $11 million since 1997 to 
mitigate the damages caused by the disaster, but the lake 
continues to rise, and it's clear we're in uncharted territory.
    We've always understood that only comprehensive solutions 
will succeed in the long run. The problems of Devils Lake 
cannot be solved by simply flooding everything downstream. 
However, we can no longer write this off as just a Devils Lake 
problem; this is all of our problem. This is a problem for not 
only the Devils Lake Basin, but for every city and town 
downstream: Valley City, Lisbon, West Fargo, and right up the 
Red.
    Since the May Flood Summit in Devils Lake, the 
administration has convened a working group to evaluate both 
short- and long-term options. The working group has 
representation from all of the relevant Federal agencies, 
including the Corps of Engineers, FEMA, the Department of 
Transportation, the United States Department of Agriculture, 
the Bureau of Indian Affairs, Environmental Protection Agency, 
the U.S. Geological Survey and others. The group's 
recommendations are expected in September. In fact, we are 
anticipating their recommendations on September 9th. We are now 
talking about a meeting in Washington on September 3rd with 
local leaders, State leaders, and the Federal task force. They 
have told us, if that meeting is held on September 3rd, it 
could delay the report by a week, or even two. So, we are 
making a judgment now on that issue. But, I think most of us 
believe it is absolutely in our interest to deal with the 
Federal working group face to face rather than in a phone call 
or in some other venue. I think most of us believe it would be 
more effective for us to talk to them face to face before they 
come out with their recommendations. They have already had 
working groups on location in Devils Lake, in Valley City, in 
Lisbon; and they are working toward conclusion. They say they 
are on track for that September 9th date.

[GRAPHIC] [TIFF OMITTED] T8154.386


    So, from the perspective of those downstream, what options 
should the Federal Government be considering to deal with this 
flooding disaster? And what, specifically, should be done to 
mitigate downstream impacts? I am particularly interested in 
hearing from our witnesses on where they think the working 
group should focus its attention as it relates to downstream 
impact.
    With that, we'll turn to our witnesses. And, Governor, 
thank you so much for being here. I appreciate very much your 
participation in the Summit in Devils Lake and your 
participation in Devils Lake on other occasions, and in Valley 
City, when we had a hearing there. And I appreciate very much 
your taking the time to be here this morning.

    STATEMENT OF HON. JOHN HOEVEN, GOVERNOR OF NORTH DAKOTA

    Governor Hoeven: Thank you, Senator. Good to be with you. 
Appreciate the invitation to join you.
    As you mentioned, this is, I think, the third hearing where 
we've come together to not only get input, but to make sure 
that we're all working together to do everything we can to help 
with the flooding in the Devils Lake Basin, but also make sure 
that we're protecting interests downstream. And so, I want to 
thank you for your efforts.
    And clearly, this has to be a local, State, and Federal 
team effort to make this work. And so, I want to also thank 
both Mayor Walaker, Mayor Mattern for joining us, as well as 
Dave Glatt, who's the chief of the environmental section at our 
State Health Department, and, as well, the commissioners--
Commissioner Vanyo and Commissioner Pollock, the other 
commissioners that are here, Joe Belford, the crew from Devils 
Lake.
    As I say, it's just imperative that we all work together to 
make sure that this works for everybody. But, clearly we need 
to move forward.
    And so that--we're hopeful that the Federal task force, 
which I believe now is set to come out with its recommendations 
on September 7th. I talked to Colonel Price, with the Corps of 
Engineers, last week--Thursday or Friday--and I had the 9th, 
but now they're saying September 7th, and, as you say, unless 
that date slips some. But, very, very important that we get 
help from the Corps and--cooperation from the Corps and the EPA 
so that we can continue to move forward.
    Our--and our approach, which Senator Conrad touched on here 
just a minute ago, is a three-part plan, and it includes 
storing water in the upper basin, mitigating around the Devils 
Lake area, which is roads and dikes, and moving water out of 
the lake. And we need to do all three. We absolutely need to do 
all three; again, to protect both upstream interests and 
downstream interests. So, again, it comes down to all of us 
working together, both upstream and downstream, to get this 
done.
    First off, in terms of storing water in the upper basin. 
The size of the lake--Devils Lake--has increased from--1993, it 
was about--covered about 49,000 acres. So, in 1993, it covered 
about 49,000 acres. Today, it covers about 180,000 acres. So, 
it--the lake has inundated more than 100,000 acres. Well, 
that's a tremendous amount of storage of water. Now, that's for 
storage, because the lake's growing and it's flooding, but 
that's a huge amount of water, over--almost 130,000 acres of 
water, right there, that's being stored in the upper basin. And 
that doesn't even count all of the wetlands that have grown 
throughout the north and the western part of the basin, as 
well.
    And so, what I recommend to anybody that has a question 
about whether or not water is being stored in the Devils Lake 
Basin is, ``Go take a look.'' You know? And I know Joe Belford 
and Mayor Dick Johnson up there, and others, would be happy to 
take you out and take you around. But, don't just take, you 
know, my word for it, or the Senator's word for it, or the 
numbers. Go take a look, and see how much water is being stored 
in the upper basin. It's a huge amount of water. So, clearly, 
that--you know, that water is being stored in the upper basin. 
And again, I encourage people to go up and just take a look.
    The second part of the plan is mitigation in and around the 
Devils Lake area, which means raising roads and raising dikes.
    Now, on the conservative end, between local, State, and 
Federal, we spent $650 million. And I think Senator Conrad has 
numbers that go up--upwards to, like, a billion dollars that we 
have spent, or are spending, on raising roads and dikes. Right 
now, for example, this year, we're riprapping and raising and 
resurfacing, and so forth, on highways--State Highways 19, 20, 
57--and we're also doing emergency work on Highway 2, which, of 
course, is the four-lane highway that goes across the north 
side. Now, on that, I'm not even sure we have Federal approval 
yet to do it, but we're doing it, because when water starts 
crossing the road, you know, our State DOT has to step in and 
raise the road. And that's exactly what we're doing, and have 
done in parts, to make sure that it continues to be passable 
for traffic. And obviously we're going through the Federal 
process to make additional improvements to Highway 2, as well. 
And then, you've got all the diking, as well as the work on the 
reservation through BIA. And I think that may be some of the 
numbers difference, Senator. But, again, conservatively, we've 
spent, on raising roads and dikes, $650 million, and we're 
spending more.
    So, clearly, water storage in the upper basin, mitigating 
in and around Devils Lake, and this has had a tremendous impact 
on the people in the upper basin and in Devils Lake.
    And so, the third part has to be there for us to deal with 
this issue, as well, and that's moving water out of the way.
    Now, we had constructed a State outlet at 100 cfs, which 
we'd run to some extent, but we'd run into the sulfate 
standard. And so, that's going to be an important part of 
addressing, you know, moving water out of the lake, is how we 
deal with that sulfate standard. And Dave Glatt's here; he can 
talk about that some more.
    But, we've increased the size of that State outlet to 250 
cubic feet a second. And we've got our Department of 
Transportation; they actually, I think, have worked to get some 
video of that outlet. But, 250 cubic feet of--a second--is a 
lot of water. And so, if you go up and take a look--now, that's 
running, and it is bringing a lot of water out. And so, between 
what we can bring out of the west end outlet and evaporation, 
we have significantly increased what we can take off the lake; 
like I say, both in terms of moving water out and evaporation. 
But, the reality is, we need to do more there, and that means 
either--or probably a combination of both running that outlet 
longer or increasing the capacity, as well as developing a 
control structure on the east side of the lake to prevent an 
uncontrolled overflow--right?--but then also looking at options 
for gravity flow in a controlled way out of the lake, as well.
    Now, again, that has to be done in a way that we manage 
water quality downstream and make sure all downstream interests 
are protected, as well as mitigating the flooding in the lake 
region. And that's where it takes both communication, 
cooperation amongst all of us in North Dakota, and then help 
with the Corps and EPA so that we can continue to advance that 
ball and move forward.
    And so, that's exactly what we're working to do. We need to 
continue to move the water out, which is what we are doing. And 
I'm hopeful that the task force, the Federal task force, will 
help us in that endeavor so that we can continue to bring some 
water out, get that lake level down some; because, remember, we 
go through the next winter period, and, you know, we're going 
to see substantial runoff again. So, we've got to stay after 
this now. It's very, very important that we continue with this 
third piece, the third leg of the stool, if you will, to move 
water out in an orderly way.
    The last comment I'd make in that regard is the water 
treatment aspect. Valley City does draw water, essentially, 
from the river. Dave can explain that better than I can. But, 
we have already worked with our Federal partners to provide 
funding for Valley City to add reverse osmosis to their water 
treatment plant so that they can actually take sulfates out of 
the water.
    Now, the reality is, if you look at the CDC report, they 
have not indicated any deleterious effects from sulfate at the 
levels we're talking about, so I don't know that they need to 
remove them. But, nevertheless, we've provided that funding 
assistance. And I have talked to the good mayors, both Walaker 
and Mattern--and you will hear from them shortly--about 
providing that assistance, as well, for a possible new joint 
facility, that may be developed in this region, for water 
treatment or for their backup source. I know that Fargo uses 
the Sheyenne as a backup source on, you know, some number of 
days of the year.
    But, it's good to see Fargo and West Fargo working together 
on a joint facility. That's great. I congratulate you for that. 
And, on behalf of the State, we're certainly going to work with 
you in that process, to make sure that, again, any treatment 
aspects that you feel need to be there are properly addressed.
    So, with that--and we'd had a--Senator Dorgan had a 
hearing, and so we'd covered some of this before, but I think 
it's very good to go through it again. Part of the effort, 
keeping--or, getting and keeping everybody working together is 
this communication effort.
    And so, Senator Conrad, again, good to be here with you and 
to be working, not only with our local partners, but the 
Federal partners, on addressing this flooding issue in a way 
that works for everyone.
    The Chairman. Thank you. Thanks again for being here.
    And again, just to clarify, the difference between the 
numbers that I'm citing, the $700 million Federal expenditures 
so far, and the number the Governor's using--we've sorted it 
out--it's between our people, and it--we're including 
expenditures by BIA, that are not included in the Governor's 
numbers, to try to give a full reading of what's been spent so 
far, and for what is being committed.
    When we go higher--that's looking ahead; the 700 million is 
sunk costs, that's what's already been spent or committed--to 
go higher, one has to look at additional expenditures that are 
going to be required, in terms of transportation, in terms of 
moving threatened structures and the rest.
    With that, we'll turn to--
    Governor Hoeven: Senator, if I--just to follow up that--
    The Chairman. Yeah.
    Governor Hoeven: --point, which is a very good one.
    For example, when Senator Conrad talks about increased 
expenditures--if you take that, say, $700 million, right now 
we're at an elevation where--for example, the Empire Builder, 
that northern line--if we don't get that lake level down some, 
that--the bridge up there becomes at risk, which means--just 
raising that bridge, alone, is $65 million. The town of 
Minnewaukan, we're, right now, at a point where--What do we do 
with the town of Minnewaukan?--because the water is right 
there, really, at the edge of the school, you know, in 
Minnewaukan. So, do you build dikes? Do you move the town?
    So, we're at that point where, now, to raise--to do more 
mitigation, you've got significant--you know, you're talking 
hundreds of millions of dollars. And so, you know, we're at a 
very important point, in terms of trying to get this lake level 
down. If we don't, the investment that has to be made to 
protect these other--this other infrastructure is, you know, 
very significant.
    The Chairman. Yeah, I'm--
    Governor Hoeven: Just to follow up--
    The Chairman. --I'm glad you--
    Governor Hoeven: --with your--
    The Chairman. --mentioned it. We've been talking to 
Burlington Northern, for example--the delegation, the 
Governor--
    Governor Hoeven: Right.
    The Chairman. --and the costs, as he outlined, just on the 
bridge, $65 million, one structure. Moving Minnewaukan--and by 
the way, I'll be there at 2 o'clock today--if we have to move 
the town of Minnewaukan, that'll be tens of millions of 
dollars. So, those are realities.
    We'll turn now to Dave Glatt, the chief of environmental 
health section of the North Dakota Department of Health.
    Welcome. Good to have you here.
    Mr. Glatt. Great to be here, Senator.
    The Chairman. Please proceed. And why don't you put the 
microphone right in front of you; that'll help our transcriber.

STATEMENT OF L. DAVID GLATT, ENVIRONMENTAL HEALTH CHIEF, NORTH 
                  DAKOTA DEPARTMENT OF HEALTH

    Mr. Glatt. Well, good morning, Senator. It's good to see 
you again.
    The Chairman. Good to see you, sir.
    Mr. Glatt. For the record, my name's Dave Glatt, chief of 
the environmental health section for the North Dakota 
Department of Health.
    Our Department is responsible for the implementation of 
many State and Federal environmental protection programs. 
Through primacy agreements with the U.S. Environmental 
Protection Agency, we implement major elements of the Clean 
Water, Clean Air, Safe Drinking Water, and Hazardous Waste 
Acts.
    From a water quality perspective, the Department of Health 
is aware of the issues associated with Devils Lake flooding, 
and, in cooperation with other local, State, and Federal 
agencies, has developed an extensive water quality database for 
the Sheyenne and Red Rivers, as well as Devils Lake.
    This ongoing data collection effort has enabled the 
Department to anticipate potential downstream water quality 
changes due to the operation of the Devils Lake outlet, and, 
two, to estimate downstream impacts from various flood 
mitigation options. This data has proven extremely valuable in 
the Department's decision to pursue an alteration to the 
sulfate water quality standard for a portion of the Sheyenne 
River. It is important to note that the alteration to the 
standard continues to protect the applicable designated uses in 
the Sheyenne River.
    As State and Federal agencies continue to evaluate 
additional flood mitigation options, it is clear that any 
option will change water quality downstream of Devils Lake.
    National Weather Service reports of a continued wet cycle 
for the foreseeable future raise concerns that a do- nothing 
scenario significantly increases the potential for a natural 
overflow to occur along Tolna Coulee. Based upon existing water 
quality in Stump Lake, a natural overflow through Tolna Coulee 
would result in significant water quality changes downstream in 
the Sheyenne and Red Rivers. A natural discharge through Tolna 
Coulee would have a major impact on all downstream designated 
uses, which include municipal, aquatic life, agricultural, 
industrial, and recreational uses.
    Therefore, the challenge is to identify an effective flood 
mitigation alternative that will lower the lake level, reduce 
the potential for a natural outlet, and minimize impacts on 
downstream water quality. In evaluating the potential flood 
mitigation alternatives, the Department has partnered with the 
U.S. Geological Survey to model water quality changes resulting 
from the following options: do nothing, increasing the window 
of operation for the west-end outlet, doubling the flow from 
the west end, combining a west end and east Devils Lake outlet, 
developing only a Stump Lake outlet, and combining a west end 
and Stump Lake outlet. Preliminary modeling results for the 
above options indicate--depending on how they are operated, 
length of time, that type of--and time of year--the protection 
of designated beneficial uses for aquatic life, agriculture, 
industry, and recreation in the Sheyenne and Red Rivers--the 
river waters could still be used for municipal supplies and 
comply with the Safe Drinking Water Act standards. But sulfate 
concentrations could be anticipated to exceed 450 milligrams 
per liter in the lower reaches of the Sheyenne River and a 
portion of the Red River. The commingling of Sheyenne River and 
Red River water results in sulfate concentrations which only 
slightly exceed, or is below, the 450-milligrams-per-liter 
limit. In some cases, the concentration is below the 250-
milligram-per-liter sulfate standard for the Red River. A 
report clearly defining the model results should be available 
by the end of September.
    It is important to note that, due to the level of the lake, 
currently around 1451.75 feet mean sea level, and the projected 
continued wet cycle, an emergency exists, where additional 
efforts to lower the lake level should be implemented as soon 
as possible. We believe this action is needed to avoid a 
natural overflow through Stump Lake.
    This concludes my testimony. I'm happy to answer any 
questions you may have.
    [The prepared statement of Mr. Glatt follows:]

    [GRAPHIC] [TIFF OMITTED] T8154.232
    

    [GRAPHIC] [TIFF OMITTED] T8154.233
    

    The Chairman. All right.
    Why don't we finish with this panel, and then we'll open it 
to questions.
    Mayor Mattern, thank you so much for being here. And please 
proceed.

   STATEMENT OF HON. RICH MATTERN, MAYOR, CITY OF WEST FARGO

    Mr. Mattern. Thank you, Senator Conrad, for inviting me. 
And it's a pleasure to see you again.
    At a State hearing on an outlet for Devils Lake back in the 
year--August of 2000--I was quoted in a forum news article 
saying, ``At what point do you say enough is enough? When will 
State and Federal officials decide they've studied the basin's 
flooding sufficiently and are ready to do something to solve 
it?''
    Senator that was a question I asked almost 10 years ago. 
Today, I would have to ask that same question, ``At what point 
do we say enough is enough?'' Much has been done, don't get me 
wrong. But, we need to move forward now. The Devils Lake Basin 
has been studied and studied, and it's time to move forward.
    A few weeks ago, I was shown some aerial photographs of 
Devils Lake. The devastation caused by the rising lake is hard 
for us to sometimes understand, as the Governor and you have 
pointed out, from the ground level. When you see it from the 
air, it--it's hard to imagine the helplessness that farmers and 
city residents must feel at watching something happen, and 
there's nothing, really, that they can do right now.
    Through the years, when asked, the West Fargo City 
Commission always has supported doing something to alleviate 
the problem of rising water. I'm confident that the City 
Commission will continue to do so in the future.
    Today, as a city, we do have some concerns about an outlet. 
These concerns are not insurmountable, by any means, and by 
working together we certainly can solve these problems, as you 
and the Governor have pointed out.
    Again, we need to move forward to help our neighbors, and 
this is certainly not any kind of fingerpointing testimony, by 
any means.
    First of all, West Fargo is protected from high flows in 
the Sheyenne River by two Army Corps of Engineers diversion 
projects. Those are, of course, the Horace and Sheyenne 
diversions. The intent is to divert excess Sheyenne River water 
around the city during flood events. There is some concern by 
city staff that the two diversion projects could run 
continuously, depending upon the amount of water that is 
released from Devils Lake. The two diversion projects were not 
really built to run continuously, so the Army Corps of 
Engineers may have to consider changes, such as lining the 
diversion with cement or something to kind of alleviate any 
problems. Again, this depends upon the flow.
    Of larger concern, West Fargo gets all of its water, 
currently, from groundwater sources. That may have to change 
soon, because of our rapid growth. In the year 2000, we were at 
14,500, today we are predicting that we are at about 26,000. 
So, West Fargo is analyzing the need for a water treatment 
plant, along with the city of Fargo and, hopefully, some other 
entities. The treatment plant would utilize water from the 
Sheyenne River.
    A study by Advanced Engineering that was completed by the 
city of West Fargo states that increased sulfate levels in the 
Sheyenne River, due to releases from Devils Lake, potentially--
again, potentially--could cost the city an additional $15 
million to build a water treatment plant. Annual operating and 
maintenance costs also could be increased by up to a million 
dollars per year due to the added equipment and treatment 
requirements.
    So, again, those are two of our major concerns, Senator. 
And again, thank you for inviting the city of West Fargo to 
testify. And it was a pleasure to be here. And I'll--again, 
I'll answer questions when you're ready.
    The Chairman. Thank you very much.
    And now we'll go to the mayor of Fargo, Mayor Walaker.
    Welcome, good to have you here. Please go ahead.

       STATEMENT OF DENNIS WALAKER, MAYOR, CITY OF FARGO

    Mr. Walaker. It's good to be here. I can make some comment 
about being last, but that's all right.
    [Laughter.]
    Voice: Saved the best for last.
    Mr. Walaker. Yeah, right.
    Well, I will make a couple of personal comments, and then I 
have a letter, here, that--there's copies in the back.
    We usually go fishing up in Devils Lake once a year. We 
didn't make it this year. And I have met nobody that could have 
forecast where the river or the lake is today. Absolutely 
nobody. The size of that is amazing. And it's big water right 
now. It's huge. And you think of all the farms and so forth 
along that area; it's just very traumatic. And we're going 
through some of those situations here. My concerns, of course, 
are with Valley City and Lisbon, and then, of course, 
ourselves, to a certain extent. And we can talk about water 
quality and so forth, and we'll talk about that shortly.
    But, our biggest concern is life and property. And I'm sure 
if everybody would have known what was going to happen, things 
would have been different--different solutions and so forth. 
But, in 1992-93, everybody was complaining about the lack of 
water, and today you've got to pick a date to fish up there, 
because of the winds. It's that big. It's huge. Absolutely 
huge.
    And I'm pleased, Senator Conrad, that you guys are taking 
this and trying to resolve the process. There's a lot of people 
out there--is--``Why isn't something being done?'' Well, a lot 
of things have been done. You can't spend 600 to 700 million 
dollars and not accomplish something, so forth. And when you--
when the forecasters talk about the future, I mean, you know, 
50 years? I mean, I know the National Weather Service pretty 
well. Anything beyond 24 hours is a pure guess. But--
    [Laughter.]
    Mr. Walaker. So, the solution really gets down to--you 
know, it's--we need to move this forward. Is a drought--I mean, 
I have never, ever seen the corn in this part of the State and 
Minnesota as lush as it is this year. And what makes that? 
Usually, the tops in Minnesota--corn gets a lot shorter because 
of the lack of moisture. This year, it's phenomenal. And then 
our wet cycle continues. I think, the last I checked, that 
we're about 4 and a half inches above normal right now. And 
what is normal? My goodness, it just continues to be exceeding 
any expectations.
    So, I'll start with my letter, here, and I'll try and make 
this as brief as I possibly can. It's about two pages.
    Thank you for providing the city of Fargo with the 
opportunity to provide testimony with regard to the ``Devils 
Lake Flooding Disaster: A Red River Valley Perspective.'' A
    field hearing of the U.S. Senate Budget Committee to 
address this important topic is greatly appreciated.
    As you know, the city has previously expressed concerns 
about the changing water quality conditions in the city's water 
source, the Sheyenne River, due to the operation of the Devils 
Lake emergency outlet. The primary water quality concern has 
been elevated sulfate concentrations being transported 
downstream to the city of Fargo intake on the Sheyenne River, 
near West Fargo.
    The city of Fargo understands the necessity of moving water 
out of Devils Lake, and it should be noted that the problems in 
Devils Lake have expanded beyond the immediate Devils Lake 
Basin to become a regional issue that warrants regional 
solutions for all stakeholders.
    The city of Fargo relies upon the Sheyenne River as a vital 
component of its current and future water supply. In fact, the 
city of Fargo has utilized the Sheyenne River for our water 
supply on over 40 percent of the days since 2007, 559 of 1,308 
days from January 1, 2007, through July 31 of 2010. Impacts to 
our source water quality, especially with elevated sulfate 
concentrations in the Sheyenne River, are concerning because 
the water--Fargo water treatment plant was never designed with 
process capable of moving--removing sulfates.
    Historical concentrations below the EPA's secondary maximum 
contaminant level of 250 milligrams per liter did not warrant 
sulfate treatment at that time of the design. During the design 
of our water treatment plant, we did make significant 
commitment to provide our consumers with high quality, 
aesthetically acceptable water. Elevated sulfate concentrations 
in our source water will impact taste and odor, quality of our 
drinking water, and may have potential health impacts, 
including diarrhea and dehydration, which are most severe with 
infants, the elderly--that's myself--
    [Laughter.]
    Mr. Walaker. --and transient consumers. As a major economic 
center for the region that hosts a significant transient 
population for healthcare and employment, shopping, 
conventions, entertainment, and higher education, we have a 
very large group of potentially impacted consumers.
    As the stakeholders work to develop a satisfactory solution 
to Devils Lake flooding, the city of Fargo strongly encourages 
efforts to prevent an uncontrolled release from Devils Lake. 
Some time ago, I went up, with the Corps of Engineers, and we 
tried to find Tolna Crossing. My goodness, we searched for 
almost an hour and a half before we finally got it, and you 
could barely see Stump Lake from Tolna Crossing. And then, Joe 
Belford, at--informed me that when they drilled down, took soil 
samples, there was sod at 20 feet. So, if you think that's 
going to prevent an overflow, what's there right now will erode 
very quickly. An uncontrolled discharge from a natural outlet 
on the east side of Devils Lake has many uncertainties that 
could impact downstream communities, including the strong 
possibility of flooding and significant water quality 
degradation.
    The city would also like to encourage the investigation of 
a year-round operation of the emergency outlet. A year-round 
operation could remove additional water from the lake and could 
alleviate large fluctuations in sulfate concentration in the 
Sheyenne River. Given historical Sheyenne River usage patterns 
by the city of Fargo, it is likely that the city will be 
drawing water from the Sheyenne--it is less likely that the 
city of Fargo will be drawing water from the Sheyenne during 
the winter months.
    The city of Fargo currently supplies drinking water to its 
residents and to the customers of Cass rural water users 
district. City of Fargo also provides regional waste water 
treatments serving several neighboring communities and sanitary 
districts. With the city's increasing service boundaries, the 
impact of our drinking water quality extends beyond the 
boundaries of our city limits and into the metropolitan area 
and county, which is--combined statistical population of over 
200,000.
    Recently, the cities of Fargo and West Fargo have begun 
negotiations and discussions related to a regional water supply 
system that would provide both communities in the Cass County 
water users district with a reliable water system. Additional 
planning and coordination are necessary before moving forward 
with this regional water supply, but it's clear that the 
Sheyenne River will be an integral part of the water supply and 
drought mitigation for this system.
    We expected that one solution to the elevated sulfate 
concentrations in the Sheyenne River could be provided to 
satisfy the city of Fargo, the city of West Fargo, and Cass 
rural water users district.
    In order to minimize the drinking water impacts associated 
with the elevated source water sulfate concentrations, the city 
has estimated that the capital improvements, approximately 50 
to 70 million dollars, will be needed for our water treatment 
plant. The cost is based on concentration of sulfate in the 
Sheyenne River ranging from 450 milligrams per liter to 750 
milligrams per liter.
    The city is prepared to address the capacity expansion of 
its water treatment plant to accommodate our growth, but we are 
not prepared to fund these necessary capital improvements for 
sulfate treatment without financial burden to our consumers. As 
such, the funding in Devils Lake flooding disaster should 
include funds necessary to mitigate the downstream impacts of 
the Devils Lake outlet, including State and Federal funding for 
the city's--for Fargo's drinking water system.
    Your efforts to achieve a comprehensive solution to the 
Devils Lake flooding situation are greatly appreciated. These 
challenges now associated with Devils Lake are very significant 
and could have potentially long-term devastating impacts to the 
region.
    As you continue your work to develop these solutions to 
regional Devils Lake issue, solutions must address the 
prevention of additional local flooding, prevention of an 
uncontrolled discharge to the Sheyenne River, increased flows 
from the lake, including consideration of year-round 
discharges, sulfate treatment for downstream water treatment 
plants on the Sheyenne River.
    With State and Federal funding to provide sulfate treatment 
processes at our water treatment plant to meet the treatment 
standard of 250 milligrams per liter, the city has prepared a 
stream standard variance for sulfate in the Sheyenne River up 
to 750 milligrams per liter. We understand this variance would 
allow a much more aggressive discharge of water from Devils 
Lake to prevent further flooding impacts. Without this funding 
as part of the regional solution, however, the city desires to 
continue use of the Sheyenne River supply with sulfate 
concentrations that do not exceed the national historic levels.
    Note as a supplement to this testimony I have attached the 
testimony that I provided Senator Byron Dorgan at the
    U.S. Senate and Energy Water Appropriations Subcommittee 
hearing on February 19th, 2010. Along with the attachment, 
please accept this letter as Fargo's formal submittal to the 
Budget Committee hearing, ``Devils Lake Flooding Disaster: A 
Red River Valley Perspective.''
    [The prepared statement of Mr. Walaker follows:]

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    The Chairman. Thank you, Mayor. Thank you very much.
    Let me start with the first question that I haveten, which 
is, Why is the Budget Committee holding a hearing on this 
question? Well, simply put, the reason is money. In order to 
fund all of this, it has to go through the Budget Committee and 
then be appropriated by the appropriators. And so, you've got 
two committees that have jurisdiction here. You have the Budget 
Committee and then you have the appropriations committees.
    With what is contemplated, in terms of additional cost, if 
nothing is done, we could be looking at billions of dollars. If 
there was an uncontrolled release of water, we know the costs 
would be staggering.
    Let me give you a reason why that would be. In a worst-case 
scenario, we could have Valley City getting water, if there was 
an uncontrolled release out of the east end, 10 feet above 
flood stage, 5 feet above where flooding was in Valley City in 
2009. Similarly, Lisbon would be devastated. Both of those 
communities, in this worst-case scenario, would have to be 
evacuated, and they would have to be evacuated for a 
considerable period of time. You think about the extraordinary 
cost of an incident like that. That is the potential risk that 
we have to balance all of our other decisions against. What is 
the worst-case scenario? And, frankly, it's not very 
farfetched. It assumes that the Tolna Coulee goes down to 1450, 
and that's--goes to the observation the Mayor was making with 
respect to what is there that is stopping the release of water 
now. And I think it's just very important that we understand--
all of us understand--the consequences, yes, for the Devils 
Lake Basin, but for the downstream cities and town, as well.
    Let's go the question of sulfate levels, very quickly, 
because that really becomes the crux of the issue, I believe, 
for the downstream cities and towns. And I think the first 
thing I want to do is go to Mr. Glatt. The current standard, 
without a waiver, is at what level, Dave, of sulfates--
    Mr. Glatt. The--
    The Chairman. --in the river?
    Mr. Glatt. Well, Senator, the current river standard is--
for the Sheyenne--will be from Baldhill down to the Red River--
is 450 milligrams per liter, and that's the river standard. And 
the river standard for the Red River is 250. For a drinking 
water supply, it's called a secondary standard, which is a non-
enforceable standard, and that's 250.
    The Chairman. Okay. So, we've got two standards at work, 
here. That contributes to confusion that we've seen in some of 
the stories. You've got a river standard, which is at 450, in 
the Sheyenne, and you've got, for the Red, 250. Is that 
correct?
    Mr. Glatt. That's correct.
    The Chairman. And what is the--you mentioned an analysis 
that's been done with respect to that standard and the 
acceptability of a higher level than 250. And as I heard you 
describe it--well, why don't you describe it for me and make 
sure we have it right for the record.
    Mr. Glatt. Senator, as it relates to the drinking water 
standard, is that what--
    The Chairman. Correct.
    Mr. Glatt. Currently, under the Safe Drinking Water Act, 
there's primary standards and secondary standards.
    Primary standards relate to health issues, concentrations 
of various chemicals--parameters--that can be in your drinking 
water that, if exposed to them over a period of time, can 
result in health impacts to a percentage of the population. So, 
those are more health- related standards.
    Secondary standards deal more with aesthetics--taste, odor, 
color--you know, like iron can impart a color to it. It's not a 
health issue, but it's an aesthetic standard that people may 
find unpleasing, not desirable, in their drinking water supply.
    The Chairman. So--
    Mr. Glatt. And so, those are the two. The primary is 
enforceable, that they have to comply with; secondary is not 
enforceable.
    The Chairman. And what would the primary standard be for 
sulfates?
    Mr. Glatt. There is no primary for sulfates, because it's 
not considered to be a health issue, as it relates to the 
concentration.
    The Chairman. So, there's no standard for sulfates for the 
purposes of health.
    Mr. Glatt. Senator, that's correct. There's no 
enforceable--
    The Chairman. Standard.
    Mr. Glatt. --primary standard for sulfates.
    The Chairman. It's the secondary standard that becomes the 
concern, and that involves aesthetics.
    Mr. Glatt. That's correct.
    The Chairman. And again, that standard would be, in Red 
River, 250?
    Mr. Glatt. Now we're--Senator, we're talking in--for--we 
have two different things. We have standards for water quality 
for surface waters in the State, and that is for your rivers, 
the lakes, that type of thing. Then we also have standards for 
drinking water, under the Safe Drinking Water Act, which is 
separate than that. The--for the Red River, the standard for 
the Red River surface water is 250 milligrams per liter for 
sulfate.
    The Chairman. Okay. Is there anything more we should know 
about these sulfate levels?
    Mr. Glatt. Senator, that--well, that--the CDC has studied 
the sulfate levels, and determined what--that there isn't 
really a bright line between any health issues related for 
that. And that's why--one of the reasons they did not make it a 
primary standard. I will tell you that, statewide, we have 
several communities that drink very high concentrations of 
sulfate without any health issues.
    The Chairman. What--
    Mr. Glatt. But--
    The Chairman. What concentrations would they be drinking?
    Mr. Glatt. We have up to 1,000 milligrams per liter. But 
that becomes a local decision and issue on what is acceptable 
for their community.
    The Chairman. So, you are--there are communities in North 
Dakota right now who have a sulfate level of 1,000 parts, and 
they're not experiencing health issues that can be seen.
    Mr. Glatt. That's correct, Senator. And--but, I will tell 
you, in all honesty, there are some communities that are 
looking to hook up to rural water because--you know, it's--not 
it's only--not only sulfates, but other minerals in the supply 
that they're looking for something, aesthetically, a little 
more pleasing.
    The Chairman. Currently, what is permitted above Ashtabula? 
Is there a difference in standard, at the current time, for 
above Ashtabula, and below?
    Mr. Glatt. Senator, right now we are operating an emergency 
standard that will allow the stream standard to be up to 750 
milligrams per liter. We have also gone through what is called 
a triennial review of our statewide water quality standards, 
and we've asked for a permanent change of that standard to be 
from the headwaters of the Sheyenne to a tenth of a mile below 
the Baldhill Dam. And that would permanently change it to 750.
    The Chairman. 750. And what is the water quality coming out 
of the State outlet?
    Mr. Glatt. Right now, the most recent testing, we're about 
550 milligrams per liter.
    The Chairman. So, well below the 750.
    Mr. Glatt. That's correct.
    The Chairman. If the water were to come out in an 
uncontrolled way out of the east end, what would be the sulfate 
level there?
    Mr. Glatt. East end, meaning Stump Lake through Tolna 
Coulee?
    The Chairman. Correct.
    Mr. Glatt. Right now, we're at about 2500 milligrams per 
liter for sulfate, plus other elements that may be of concern.
    The Chairman. So, when I referenced, earlier, the water 
quality being five times worse out of the east end than out of 
the west end, that is supported by the sulfate levels that we 
see between the two--500, roughly, out of the west end, 2500 
out of the east end.
    Mr. Glatt. That's correct, Senator.
    The Chairman. If we were to have a continuation of up to 
750 out of the west end, which is permitted above the dam, what 
would the effect be on levels of West Fargo and Fargo?
    Mr. Glatt. Senator, first of all, we--I--we don't see that 
we would get to 750. We'll be in that 550 to 600 range. And so, 
that's the highest it would ever get. What we have seen from 
our monitoring--we've done extensive monitoring from the point 
of discharge, down to through the Sheyenne, into the Red River, 
all the way up to Canadian border--that there is some dilution 
that occurs, so that level would be less than that. If we were 
to operate the west-end outlet for 9 months out of the year 
with no stoppage, you would see concentrations probably in that 
450 to 500 range in the Sheyenne, the lower Sheyenne.
    The Chairman. In the lower Sheyenne. And what would that 
effect be, then, on the Red? Because there would be other 
sources for the Red.
    Mr. Glatt. Yeah. And we--and that's one of the--Senator, 
that's one of the things we're looking at modeling with USGS, 
is that--Under different scenarios and different flows, what 
can we anticipate in the Red River? Clearly, the amount of flow 
that we've seen in the Red in the last few years is 
significantly greater than what the Sheyenne would add to it. 
So, you would see a considerable amount of dilution occurring. 
And--to the point where our preliminary results say that we may 
even meet the 250 milligrams per liter for sulfate at certain 
times of the year.
    And so, those are the things that--
    The Chairman. So, without any additional treatment being 
done, your initial studies indicate that, in the Red, you might 
still achieve the 250 parts, even without any additional 
treatment being made, for certain times of the year.
    Mr. Glatt. Yeah. Senator, that's true. And it's all 
dependent upon what type of flows we can anticipate in the Red 
and what type of dilution flows we get in the Sheyenne. But, 
clearly, there are times when we can see the 250, and be in 
compliance with that. Clearly, there will be times we'll be 
above that. But, we're trying to get that modeling refined 
enough to give us a good indication of what the--
    The Chairman. Of--
    Mr. Glatt. --downstream impacts--
    The Chairman. Of how much above it we might be.
    Mr. Glatt. That's correct.
    The Chairman. Okay. All right.
    Mayor Mattern, in terms of West Fargo, I heard you loud and 
clear, you want to be part of a solution.
    Mr. Mattern. Absolutely, Senator.
    The Chairman. And we appreciate that. Frankly, I think it's 
in all of our interests to be part of a solution, because I 
think--
    Mr. Mattern. Absolutely.
    The Chairman. --we can see, from this testimony, if we have 
an uncontrolled release of water out of the east end, at 2500--
level of sulfates, 2500--that becomes an issue for everybody 
downstream.
    Mr. Mattern. Absolutely, Senator.
    The Chairman. The--what assurance would West Fargo need to 
support an increase in sulfate levels from what's already been 
approved? That is, the 750--Dave, correct me if I'm wrong--
that's just for above the dam.
    Mr. Glatt. That's correct.
    The Chairman. If we had to raise sulfate levels--what are 
the sulfate levels permitted below the dam?
    Mr. Walaker. As it relates to--Senator, as it relates to 
the current water quality standards, it's 450 from below the 
dam to the Red River, and 250 from there on. I would point 
out--for--in the Red--250 in the Red.
    The Chairman. Yeah.
    Mr. Walaker. I would point out that, when you--we--through 
the monitoring, we've been able to show that, naturally 
occurring--the river fluctuates naturally, and it naturally 
goes above 250, up to 350 at times. So, that--does it without 
any influence from Devils Lake. But, as the standards are set, 
today, the emergency standards--750 from the headwaters to 
Baldhill, 450 from Baldhill to the Red, 250 in the Red.
    The Chairman. Have--has the city had any discussions about 
what levels that they would want to be assured of to support 
increasing the level of sulfates that are permitted?
    Mr. Glatt. Senator, I--to me, I don't know that that--
certainly, that's an issue, but--and, as we talked about, it's 
going to raise the costs of a water treatment plant that we are 
working on jointly. And I think that's the--going to be, with 
residents, somewhat of an issue, when you--I think you talk to 
any resident in West Fargo, and they'd probably, 99 percent, 
support doing something. I don't think that's an issue. I think 
when you start talking about an added $10-15 million, then, of 
course, that becomes an issue. And that's, I think, what we'll 
have to work on to mitigate that somewhat with our city 
residents.
    The Chairman. Is the consideration of a water treatment 
facility--are there other reasons, other than water quality 
effects that might come as a result of Devils Lake?
    Mr. Glatt. I guess I didn't quite understand the--
    The Chairman. Yeah. Are there other reasons for considering 
a joint water treatment facility, other than changes in quality 
caused by a release of water from Devils Lake?
    Mr. Mattern. No, I think--help me out, here, Mayor, but--I 
think we're looking at the high costs of a water treatment 
plant, and that's why we're--we want to work together with 
Fargo, and any other entity or cities around them, to make--
take a more regional approach to the whole water issue.
    The Chairman. So, you would be looking at this potential 
for a new water treatment plant, regardless.
    Mr. Mattern. Yes. Yes. I'm sorry--
    The Chairman. You'd be--
    Mr. Mattern. --I guess I misunderstood.
    The Chairman. You'd be--
    Mr. Mattern. Yes, we--
    The Chairman. I want to be clear, on the record here, that 
you're looking at a new water treatment plant because of the 
economics of water treatment, whether or not Devils Lake is in 
the picture.
    Mr. Mattern. Yes. As I mentioned, all of our water right 
now comes from aquifers, and when you have a--terrific growth 
that we have had, those will not last forever, and it's time 
for us to take a look.
    I've--you can correct me if I'm wrong--right now, we're in 
the portion of the study to take a look again at just how much 
water is left in that aquifer--or, aquifers--for us to--but, 
clearly, I think the handwriting is on the wall that a water 
treatment plant is in our future.
    The Chairman. Water treatment plant is in the--I think it's 
just very, very important that it be clear to people that 
you're not talking about a new water treatment plant between 
Fargo and West Fargo because of Devils Lake.
    Mr. Mattern. No.
    The Chairman. You're looking at it because of explosive 
growth in your population, you're looking at it because of the 
economics of water treatment, that you might be able to get 
lower costs for your constituents by going together on a water 
treatment facility.
    Mr. Mattern. Absolutely, Senator.
    The Chairman. But, the construction of that water treatment 
facility would give us an opportunity to improve the ability to 
remove sulfates as well
    Mr. Mattern. Yes.
    The Chairman. That would be an additional benefit.
    Mr. Mattern. Yes.
    The Chairman. Is that the way you see it, Mayor Walaker?
    Mr. Walaker. Anything that Rich says, I agree with.
    [Laughter.]
    Mr. Mattern. Gosh, he's agreeable today.
    Mr. Walaker. This graphic, right here, explains--and, I 
mean--people have to understand is that we paid for over one-
half the cost of the construction of Baldhill Dam. That's our 
reserve. We have about--we anticipate about 2 years of water in 
the Baldhill Dam area, Lake Ashtabula. So, we're very concerned 
with what happens to that.
    If you look at this whole thing historically, we have been 
somewhere in the vicinity--for the majority of years, somewhere 
around 250 milligrams per liter. We have a--I think there's one 
spike there that goes up to 300, but, for the majority, it's 
been at that. And that's very acceptable. We think we produce a 
good quality water for our community and the people that we 
serve.
    But, as you can see here by the blue lines, that's when we 
took water out of the Sheyenne. So, building this water plant 
is--between Fargo and West Fargo--the cost of treating sulfates 
is something that Devils Lake will add to this process. Very 
simply.
    And as far as we can tell, there's very little dilution 
from the dam to Fargo. And there probably won't be any, and so 
forth.
    Now, when you start talking about the quality of water, 
there's lots of people that won't drink the water in West 
Fargo.
    Mr. Mattern. I knew you were going to say that.
    [Laughter.]
    Mr. Walaker. And we understand that. Bottled water is not 
the answer. You know, use it for cooking or sanitary purposes 
or whatever. But, the taste of the water right now in Fargo is 
excellent, and this would be a dramatic change in that whole 
process. And all we're doing is--you know, granted, 50 to 70 
million dollars is a lot of money, but that's what we're 
talking about. We need some help with that process if you're 
going to talk about increasing the sulfates to 500 to 600. You 
know, even though you changed the rules, historically Fargo has 
not had to deal with sulfates for the last 50 years. And the 
problem very--gets down to is priorities--we need some 
priorities, number one, to attend to what Devils Lake needs 
first. That's number one. And the process of Valley City and 
Lisbon having all of that water, because it'll come at one 
shot, that's unacceptable. We've had years and years to see 
this going, and hopefully the answer has been that it's going 
to quit, that the process would quit pretty soon, and we would 
get through these wet years and so forth. But, it doesn't seem 
to be anything on the horizon, and that's what we have to deal 
with.
    I've been in Minnewaukan. I mean, I can't believe it. I 
mean, I was there when the water was beyond the parking lot at 
the high school and the grade school, and that was there before 
281 was moved, you know, a mile or so to the west and so forth. 
But, now people are fishing off of the old highway. I mean, 
they're standing there on the rocks, and fishing in an area 
that used to be farmland. So, that's the number-one priority, 
is the protection of Devils Lake.
    And Joe has taken us around on a bus tour from the Red 
River Basin Board and showed us some areas that I wasn't 
acquainted with, the area. And in the military camp, they're 
talking about their--losing their area and so forth. And 
there's a lot of options that--I mean, Devils Lake is a real, 
significant problem, and we sit here and we argue about 
sulfates and so forth. But, the reality is, the city of Fargo 
would like some assistance in the--just like what was done for 
Devils Lake. And the Governor has mentioned that, and we'd like 
the Federal Government also to participate in sulfate removals, 
because we have never had to do that in the past. We never 
have. We've had--you know, granted, the water quality, years 
ago, was because of the treatment process, but we just spent a 
significant amount of money building a brand new water plant, 
and we think it's doing a very good job and so forth. And we 
want to continue doing that.
    I mean, I live in an area--or used to live in an area--that 
had artesian water. You could even taste it in the coffee and 
the Kool-Aid. That's the only way you could actually drink it. 
And this--and the process is--is not that the people that are 
in these communities that are using higher levels of sulfates, 
the problem is acclimating themselves to getting used to it. 
And there is an acclimation process in the--and so forth. So--
    The Chairman. All right.
    Mr. Walaker. Okay?
    The Chairman. I think we've explored this pretty 
completely. I think we've--we have already dealt with Valley 
City, in terms of upgrading their water plant, a commitment to 
do so, substantial Federal help there, and would not be 
unreasonable to have Federal help to deal with that part of the 
water treatment issue that might be exacerbated by decisions 
that were made with respect to releases from Devils Lake.
    Again, I want to emphasize, and close on, this point: An 
uncontrolled release of water out of the east end would have 
sulfate levels coming at us of 2500. Out of the west end, on a 
controlled basis, the water quality, in terms of sulfates, is 
roughly 500. So, that is a tremendous difference, in terms of 
what we'd face downstream. And I think that's just got to be 
kept in mind, in terms of what is in our collective interest, 
in terms of a solution.
    Governor, any statement--final statement you want to make, 
in terms of this panel?
    Governor Hoeven: No. I'd just echo your closing comments, 
there, that we can work together and manage this, and keep the 
sulfates at a manageable level downstream, and also work with 
the communities, as we've done with Valley City, on your water 
treatment needs.
    And I want to express my appreciation to both Mayor Walaker 
and to Mayor Mattern for your willingness to work with us on 
it. We appreciate it very much.
    Thank you.
    The Chairman. Thank you.
    Thanks, to the entire panel.
    And now we'll call the second panel: Darrell Vanyo, 
chairman of the Cass County Commission, and Steve Burian, chief 
executive officer of Advanced Engineering and Environmental 
Services.
    Governor, if you're able to stay, we'd love to have you --
    Governor Hoeven: Yeah, I'm going to stay.
    The Chairman. --stay.
    Governor Hoeven: I'm going to--
    The Chairman. Why don't we proceed with Darrell Vanyo, the 
chairman of the Cass County Commission.
    Welcome. Thank you so much for taking time to provide 
testimony at this hearing. And please proceed.

     STATEMENT OF HON. DARRELL VANYO, CHAIRMAN CASS COUNTY 
                           COMMISSION

    Mr. Vanyo. Thank you, Senator, for giving me the 
opportunity to appear before this committee hearing today.
    I think I want to applaud you and the people in the Devils 
Lake area for being concerned about the downstream impacts 
relating to any solution with the Devils Lake issue.
    That type of concern has been going on for many, many 
years. I can recall--I was a city commissioner in West Fargo 
from 1986 until 1999, and during that time, I remember 
Commissioner Joe Belford coming before us a handful of times 
because of his concern in getting the support of people 
downstream. So--and that's--concern still goes on. And I 
applaud you for that.
    As indicated, I'm the chair of the Cass County Commission. 
I believe that a timely solution to the current devastation and 
downstream threat created by the continued rise of Devils Lake 
must be a priority to the Federal Government, the State 
government, and local governments across the State of North 
Dakota.
    The risk associated with an uncontrolled spill from Stump 
Lake into the Sheyenne River is substantial, and would result 
in catastrophic consequences to downstream communities, 
including those in Cass County.
    The best available evidence suggests that the Devils Lake 
has spilled from Stump Lake into the Sheyenne River more than 
once in the past 2,000 years during wet cycles. A recent USGS 
report suggests, as you indicated on your chart, Senator, a 72-
percent chance that the current wet cycle will last at least 
another 10 years, and a 37-percent chance it will last 30 
years. We simply cannot afford to gamble on the possibility of 
a quick end to the wet cycle. One exceptionally large rain 
event could escalate the current crisis to a catastrophic event 
with significant damages and associated costs.
    The 250-cubic-feet-per-second pumping station recently put 
into operation is a step in the right direction that provides 
some reduction in the probability of an uncontrolled outflow. 
However, it does not solve the problem. In a recent USGS 
simulation model exercise, one- half of the random models 
resulted in a spill within the next 20 years, even with the 
State outlet. Therefore, more is needed and time is of the 
essence. The risk to downstream interests is unacceptably high.
    Of additional concern are the large expenditures for 
raising roads and other temporary infrastructure that continue 
with no end in sight. We understand that, by the end of 2011, 
650 million will have been spent to address infrastructure 
needs in the Devils Lake area since the wet cycle started. This 
includes several hundred million on roads. The North Dakota 
Department of Transportation estimates possibly 250 to 300 
million in--more in highway expenditures necessary to raise 
essential highways to an elevation of 1465 if the lake reaches 
its natural spill elevation of 1458.
    Scarce Federal, State, and local resources would be better 
applied to a permanent solution instead of continued 
expenditures on short-term fixes. Whether they realize it or 
not, all taxpayers in the United States--and certainly within 
North Dakota--all are already paying a high price for the 
flooding in Devils Lake region.
    A controlled outlet, with appropriate downstream 
mitigation, may be the only viable solution. Ideally, the 
outlet should draw water from the West Bay, where sulfur--
sulfate levels are between 500 and 600 milligrams per liter, 
instead of the much higher east Devils Lake or Stump Lake area. 
We understand that there are technical and financial challenges 
with a West Bay outlet, but believe this option needs 
significant and thoughtful evaluation before being ruled out.
    Additional consideration must be given to the following:
    Downstream water quality standards will have to be further 
modified for any outlet option to be effective.
    NEPA compliance inevitably poses unreasonable time delays.
    Emergency legislation to speed up the permit process must 
be explored.
    Leaders in downstream communities in the United States and 
Canada must be educated to understand that the environmental 
impacts of an uncontrolled discharge would far exceed those of 
a smaller, controlled discharge.
    While we recognize and support the need for an outlet, we 
must also emphasize the need to mitigate adverse consequences 
to the fullest extent practical. These mitigation steps may 
include, but are not limited to, new or improved treatment 
facilities, flood protection measures for downstream 
communities, erosion protection measures.
    During flood periods, a high percentage of the floodwater 
in the Sheyenne River now spills out and flows overland through 
Northern, Richland, and Southeastern Cass Counties. The 
Sheyenne diversion channel picks up part of the Sheyenne River 
near Horace. If levees were constructed, containing all flows 
in the Sheyenne River channel through Southeastern Cass County, 
the existing Sheyenne diversion channel may not have adequate 
capacity to provide the necessary protection. However, if large 
flows from a Devils Lake spill were allowed to enter the 
Sheyenne River without levees, communities of Kindred, 
Davenport, and Horace, as well as many rural residences, would 
be threatened from the breakout flows. Harwood and many rural 
residents would be threatened by a Sheyenne River flooding to 
the north of Fargo and West Fargo. These downstream impacts 
must be considered and dealt with as part of any outlet plan.
    The proposed North Dakota Red River diversion would do much 
to address the concerns created by a sustained increase in 
Sheyenne River flows. The need for a Devils Lake outlet 
increases the urgency of also completing the diversion in a 
timely manner.
    Speaking on behalf of the entire Cass County Commission, I 
would like to say that we all understand the issues of too much 
water very clearly. Our years of organizing, planning, and 
funding projects for minimizing the impact of rising waters 
have not been enough. The temporary measures have been costly 
for both the Devils Lake area and Cass County for battling 
their respective water issues.
    The time for permanent solutions is now. The time for 
addressing the Devils Lake rising-water issue, the flooding in 
Cass County, and mitigating any downstream effects, is now. 
Federal, State, and local funding of permanent solutions will 
save millions of dollars in the long run.
    Cass County supports a planned and controlled process to 
solving the rising waters of Devils Lake. Likewise, I believe 
that the people of Devils Lake support the Red River diversion 
as a means, not only to protect a highly populated metro area, 
but to allow for the additional water coming to our area 
through the Sheyenne River. The two are mutually beneficial.
    Once again, thank you for allowing me to comment.
    [The prepared statement of Mr. Vanyo follows:]

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    The Chairman. Thank you for that excellent testimony.
    And now we'll hear from Steve Burian, chief executive 
officer of Advanced Engineering and Environmental Services. And 
I might add, parenthetically, that his father was my deputy 
when I was tax commissioner, so I'm always glad to see a 
Burian. Welcome.

 STATEMENT OF STEVE BURIAN, CHIEF EXECUTIVE OFFICER, ADVANCED 
      ENGINEERING AND ENVIRONMENTAL SERVICES, INC. (AE2S)

    Mr. Burian. Good morning. And thank you, Senator Conrad.
    For the record, my name is Steve Burian. I'm an engineer 
specializing in water supply and treatment, and I'm here this 
morning as a consultant to the City of Fargo.
    Like to thank you, Senator Conrad, as well as Cass County, 
for hosting this hearing focused on the Devils Lake flooding 
disaster.
    I fully understand the immediate issues surrounding Devils 
Lake, and the need for flood relief, but I'm going to actually 
shift my focus of my testimony to issues related to the 
discharge of Devils Lake into the Sheyenne River.
    Specifically, I would like to address implications related 
to the increased sulfate concentrations in drinking water, 
increased sulfate concentrations within the Sheyenne River, and 
how these sulfate concerns will affect downstream users, 
including the City of Fargo.
    Sulfate is an anion with high solubility that--it naturally 
exists in water sources primarily in the forms of sodium 
sulfate, calcium sulfate, and magnesium sulfate. United States 
Environmental Protection Agency, or the EPA, and the North 
Dakota Department of Health have adopted a secondary standard 
of 250 milligrams per liter--talked about that earlier--for 
sulfate in drinking water. Estimates indicate that only 3 
percent of drinking water supplies in the country have provided 
water in excess of this 250-milligram-per-liter recommendation, 
although sulfate is more common in North Dakota.
    Sulfate, especially sodium sulfate, is known to give a 
bitter, astringent, and an undesirable taste even at low 
concentrations. One study by Zetman indicated that sodium 
sulfate, in any concentration, affects the taste of drinking 
water. Another study, by the National Academy of Science, 
indicated that sulfate concentrations between 250 to 1,000 
milligrams per liter caused reported taste impacts and varied 
depending on all the species, with sodium sulfate being the 
worst.
    Based on water-quality sampling data from the North Dakota 
Department of Health, sodium sulfate appears to be the most 
prevalent form of sulfate in the water discharged from Devils 
Lake into the Sheyenne River, though all three forms are 
present.
    Regarding health implications, the EPA and the World Health 
Organization have identified many resources that indicate that 
sulfates in higher concentrations can cause diarrhea 
anhydration, particularly for infants, elderly, and transient 
populations that aren't acclimated to sulfate. The specific 
concentration for these health effects is variable and 
inconclusive, as Dave Glatt mentioned. The World Health 
Organization has set a health advisory level for drinking water 
containing sulfate concentrations above 500 milligrams per 
liter.
    In 1994, the EPA proposed its primary standard, which is 
the enforceable standard, of 500 milligrams per liter for 
sulfate. But it was not enacted, because the field experiment 
was inconclusive, primarily because the researchers could not 
secure a large enough statistical population of exposed 
infants, and the adult trials produced nonstatistically-
significant results. As a result, in the absence of an 
enforceable health-effect standard, the only published standard 
for sulfates is based on aesthetics, at 250 milligrams per 
liter.
    The United States Geological Survey historic water quality 
data from 1969 to 2005 indicates an average sulfate 
concentration of approximately 146 milligrams per liter on the 
Sheyenne River at West Fargo, with higher concentrations 
occurring since the mid-1990s. A closer look at the source 
water quality data indicates that prior to the Devils Lake 
emergency outlet, only 3 of 65 samples, or 4.6 percent, from 
the Sheyenne River at West Fargo exceeded the secondary 
standard of 250 milligrams per liter, with a maximum recorded 
concentration of 310 milligrams per liter.
    With the operation of Devils Lake emergency outlet, 
however, the sulfate concentration throughout the Sheyenne 
River is increasing. Water quality sampling performed by the 
City of Fargo from October 2009 until the present, at the City 
of Fargo Sheyenne River intake at West Fargo, indicates an 
average sulfate concentration of 270 milligrams per liter and a 
maximum concentration of 383 milligrams per liter. Sixty-three 
percent of the samples taken by the City of Fargo over this 
time period are above the 250-milligram- per-liter secondary 
standard.
    Unfortunately, USGS water quality sampling data from 1975 
to 2005, as well as more recent data since operation of the 
emergency outlet began, indicate that the Sheyenne River offers 
almost no dilution of sulfate concentrations between Baldhill 
Dam and West Fargo.
    It is understood recent discussions have suggested 
extending the temporary emergency sulfate stream standard of 
750 milligrams per liter in the upper reaches of the Sheyenne 
River to the lower reaches of the Sheyenne River. If this 
variance is approved, historical data suggests the sulfate 
concentration in the Sheyenne River at West Fargo will be 
similar to the sulfate concentration released from Baldhill 
Dam.
    Data from 2009 and early 2010 indicate that operation of 
the emergency outlet has a significant impact on sulfate 
concentrations in the Sheyenne River. Sulfate concentrations in 
the below-Baldhill-Dam sampling site rose from just over 114 
milligrams per liter in May of 2009 to 279 milligrams per liter 
in October of 2009, with near constant operation of the 
emergency outlet at 100 cubic feet per second.
    Sulfate concentrations at West Fargo continued to rise to 
383 milligrams per liter by the end of January 2010 as a result 
of the lag time between the dam location in West Fargo before 
falling as a result of spring runoff.
    The pumping capacity of the emergency outlet was expanded 
in June 2010 from 100 to 200 cubic feet per second, but 
sufficient data is not yet available to evaluate how the 
expanded capacity will impact the sulfate concentrations in the 
Sheyenne River.
    The City of Fargo relies upon the Red River to the north 
and the Sheyenne River as its water supplies. Throughout the 
year, the sources are used independently, as well as blended at 
different ratio. Having redundant water supply sources provides 
the city with important operational flexibility in the event of 
infrastructure failures, contamination of one source--of the 
sources, and undesirable discharges from poor-quality upstream 
reservoirs or point sources. The City of Fargo has made 
significant investment to secure the redundant source water 
supplies. It would be irresponsible for the City of Fargo to 
rely exclusively on a single source.
    The City of Fargo successfully provides consumers with safe 
and aesthetically pleasing drinking water. The current Fargo 
water treatment plant, which was constructed in 1997, with the 
related--along with related facility improvements, at a cost of 
approximately $75 million, includes five main mechanisms for 
treating its Red River and Sheyenne River sources: one, high-
rate clarification to remove solids; two lime--two-stage lime-
soda ash softening to reduce hardness; three, filtration to 
remove particulate matter; four, ozonation for organic taste 
and odor control and primary disinfection; and, five, 
chloramination for disinfection, byproduct control, and 
secondary disinfection.
    These technologies were selected based on the historic 
water quality of the Red River and Sheyenne River. Ozone was 
specifically incorporated for taste and odor treatment to 
provide an aesthetically pleasing water to the--quality--to the 
Fargo consumers. Because of its solubility, however, sulfate is 
very difficult to remove from drinking water using conventional 
technologies, and none of the treatment technologies 
incorporated at the Fargo water treatment plant is capable of 
removing sulfate.
    Based on the historic water quality of the Red River and 
Sheyenne River, sulfate removal technologies were not 
historically necessary for the City of Fargo to provide 
acceptable drinking water to its consumers.
    If increased sulfate concentrations in the Sheyenne River 
persist, and further increases stem from the necessity to move 
additional water from Devils Lake to prevent further flooding 
impacts in an uncontrolled release, sulfate treatment to the 
Sheyenne River by the city of Fargo will be warranted. Advanced 
technologies capable of sulfate removal include reverse 
osmosis, ion exchange, and electrodialysis, and reverse 
electrodialysis.
    Of these technologies, reverse osmosis is likely the only 
practical alternative for a large-scale drinking-water system. 
City of Fargo staff and consultants have begun preliminary 
analysis of the scope and estimated costs to incorporate 
reverse osmosis treatment to the Sheyenne River to maintain a 
treated-water sulfate concentration of 250 milligrams per 
liter.
    The preliminary concept developed for the City of Fargo 
includes a new 8-million-gallon-per-day reverse osmosis 
facility to treat water from the Sheyenne River prior to 
blending and polishing treatment at the existing 30-million- 
gallon-per-day Fargo water treatment plant.
    Another option that could be considered is partial reverse 
osmosis treatment of the Fargo water treatment plant effluent 
prior to pumping finished water into the city's distribution 
system. Further facility planning is necessary to identify the 
most cost-effective treatment alternative.
    Although reverse osmosis in--for drinking water has become 
more common in recent years, the estimated capital costs and 
operation and maintenance costs to incorporate reverse osmosis 
for sulfate removal within the City of Fargo water system are 
significant. The required size and associated cost for the 
reverse osmosis system are directly related to the source water 
quality.
    Based on the preliminary analysis, the new sulfate 
treatment facility is estimated to cost approximately $50 to 
$70 million in capital costs, with additional operational and 
maintenance costs ranging from 3.7 to 5.5 million dollars per 
year. These cost ranges are based on maximum sulfate 
concentrations in the Sheyenne River of 450 and 750 milligrams 
per liter, respectively. Higher sulfate water concentrations 
result in higher estimated costs.
    It is also important to note that reverse osmosis will be 
capable of removing the cations that are paired with the 
sulfates in the Sheyenne River; namely, sodium, calcium, and 
magnesium.
    In conclusion, I would like to reiterate five key points in 
my testimony:
    Research indicates that sulfate starts to impact the taste 
of drinking water at relatively low concentrations. Research 
also suggests that sulfates at higher concentrations can 
potentially impact health. The only published drinking-water 
standard for sulfate is the secondary standard of 250 
milligrams per liter, based on aesthetics.
    Two, sulfate concentration in the Sheyenne River are 
increasing due to the operation of Devils Lake emergency 
outlet, and little dilution has been observed between Baldhill 
Dam and West Fargo. Further sulfate concentration increases in 
the Sheyenne River may be required to limit further Devils Lake 
flooding impacts and prevent an uncontrolled discharge.
    Three, the Sheyenne River is a critical component of the 
redundant Fargo water supply system. Based on a significant 
water treatment investment in the mid-1990s, the City of Fargo 
has been able to routinely provide its consumers with safe and 
aesthetically pleasing drinking water. The existing Fargo water 
treatment plant, however, is not capable of removing sulfates.
    Lastly, with increasing sulfate concentrations in the 
Sheyenne River, reverse osmosis treatment by the City of Fargo 
to maintain the treated water sulfate concentration of 250 
milligrams per liter will be warranted, with very significant 
new capital and operational and maintenance costs.
    Thank you once again for the opportunity to testify 
regarding the downstream drinking water impacts of the Devils 
Lake flooding disaster. I'll be glad to answer any questions 
you have, along with the other panel member.
    [The prepared statement of Mr. Burian follows:]

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    [GRAPHIC] [TIFF OMITTED] T8154.243
    

    The Chairman. Steve, I'd like to go to the question of the 
cost of a facility. The estimated cost, as I heard you describe 
it, was 50 to 60 million?
    Mr. Burian. Fifty to seventy.
    The Chairman. Fifty to seventy million dollars. And that 
would be--is that the reverse osmosis plant, that would be on 
the front end, that would treat Sheyenne River water?
    Mr. Burian. Those are the incremental costs of treating 
specifically for sulfates using reverse osmosis. And we looked 
at two different concepts. One, we would either treat the water 
at the Sheyenne River intake at a location to see if Fargo's 
retained, and then transport that water to the water treatment 
plant for blending before it goes out. The other approach would 
be to treat all of the water at the Fargo water plant, and then 
just treat a portion of it to get the blended portion down to 
about 250 milligrams per liter.
    Right now, it appears like the independent plant on the 
Sheyenne River has a little bit more flexibility, but we were--
we've been hired by the City of Fargo to look at a facility 
plan to look at both of those options, as well as incorporate 
the City of West Fargo into that analysis.
    The Chairman. Okay. And the additional operational cost, 
you testified, was $3 and a half, $4 million a year?
    Mr. Burian. Yeah, 3.7 to 5.5 million per year.
    The Chairman. $3.7 to $5.5 million dollars a year 
additional operating costs. And in your assessment, this would 
get you down to a sulfate level of--in the 250 range.
    Mr. Burian. Yeah. We didn't try to completely remove 
sulfate; we took it down to the recommended secondary standard 
of 250.
    The Chairman. Was any analysis done at assuring a lower 
level, then, would come through the Sheyenne River, but not as 
low as 250?
    Mr. Burian. In other words, the analysis of treating 300 
milligrams per liter?
    The Chairman. Yeah.
    Mr. Burian. I guess--you saw that we have experienced 300 
milligrams per liter in the past. The--we're starting to 
approach 400 now. And I'm presuming that, with the operation of 
the--at 250 cfs, that we're going to see numbers, as Dave 
testified, approaching or even--you know, getting very close to 
450 milligrams per liter. And so, our analysis, at this point, 
focused on treating at those higher levels. It's also our 
presumption that, if they want to do something meaningful--and 
we've heard a series of testimonies today about not waiting, 
but, you know, taking as much--get as much as done you can, 
given that time is--probably be--only thing that we have--and 
if that were to increase, you know, that would either provide 
further impetus for treating the water. Not to duck your 
question. If we did have to treat something at--if we had a 
better source of water quality, the cost would likely be less. 
But, given--
    The Chairman. What I'm sort of grasping at here, and trying 
to understand, is, Is there a significant difference in cost if 
you are to achieve sulfate levels that are above 250?
    Mr. Burian. You mean--
    The Chairman. In other words, is there is there a big 
difference--
    Mr. Burian. If--
    The Chairman. --in cost--
    Mr. Burian. If we allow--
    The Chairman. --getting down to 250, versus getting down to 
350, since we've already experienced above 350?
    Mr. Burian. There--it's not linear, but the--to answer your 
question, if we decided that the acceptable threshold was 300, 
because we'd seen 300 under natural conditions, there would be 
a slight reduction from those numbers I showed you. Because 
what we're looking at doing is a blend, and only treating 
enough water to get that blend down to the--
    The Chairman. Okay.
    Mr. Burian. --my own objective.
    The Chairman. All right. And we've seen--can you give us 
some sense of the frequency that of--we've seen levels above 
300?
    Mr. Burian. Well, the--everything to the left of the first 
red line is kind of pre-1993, so that's the dry period. And you 
see there, we don't have any data that exceeds 200 milligrams 
per liter. And then, just from natural effects, as both Dave 
and I testified, from 1993 to somewhere in 2004, where they 
began the outlet operation, you can see that all of the data 
was below 300, except for the one extraneous point there that 
went up to 310. And then, more recently, you can see--and 
obviously the data gets much more compressed, but you can see 
the impact of the Devils Lake outlet, particularly because of 
sulfate limitations, they weren't able to operate it very much, 
and so it really mimicked the 1993 to 2004 data, until this 
most recent change that the Health Department implemented. But, 
at that point, you can see, all of those red dots are data 
points that are above 300 milligrams per liter, so we're 
dealing with a water that--
    The Chairman. And have we gotten--what has been consumer 
response? With all those data points above 300, were there 
complaints?
    Mr. Burian. Well, there--the--you also have to--I suppose, 
if we didn't parallel that--but, if you showed the other one, 
it has--go along with the amount of the time that they're using 
that. But, so far, because they've never used the--haven't been 
forced to use the Sheyenne River exclusively, and because they 
have--so they can blend it; and there are certain times of the 
year where they weren't using it, which would have been the 
winter tail--we haven't heard a lot of complaints at this 
point.
    The Chairman. Have there been any complaints?
    Mr. Burian. There have been complaints. I guess the 
question would be, Are they due to organics in the water or are 
they due to--because you get taste-and-odor complaints kind on 
a routine basis with surface water. Can we tie that to the 
sulfate concentration, or would that be tied to MIB or geosmin 
in the water? It would be hard to discern that.
    The Chairman. Okay. Because there are other things that 
would contribute to people complaining, is what you're saying.
    Mr. Burian. Yup.
    The Chairman. And the 310--there was a data point on the 
previous slide--that occurred before there ever was a State 
outlet.
    Mr. Burian. Right.
    The Chairman. That occurred naturally. Okay.
    Mr. Burian. We--I guess, in looking at it, we had to pick a 
defendable number in--to which to treat it,--. We picked a 
secondary standard of 250, because it was the published data 
that was out there. If, collectively, everybody decided that 
300 or 310 was acceptable, we would revise our cost estimates, 
and I would expect our cost estimates to go down slightly.
    The Chairman. But not significantly. Okay. That's important 
to know.
    I--any final statement you'd want to make, Darrell?
    Mr. Vanyo. Well, summing up my testimony, it simply is that 
we certainly support moving forward with, you know, trying to 
resolve the Devils Lake situation. We certainly encourage the 
West Bay, as--you know, for better water quality. And 
mitigation of any downstream--in terms of the cities I 
mentioned--I happen to live on the Sheyenne River, between 
Horace and I-94, which is protected, but it's a 100-year level 
of protection, although new numbers might indicate it's less 
than 100 years. And during the last couple of years, even 
though we have the diversion at Horace, the water has been 
within--there's been about 2 feet of freeboard, and there have 
been people in our area that we have--for. So, if you--a 
controlled outlet is obviously the best, but we have to be 
concerned about the spring flooding and, you know, timing of 
everything, there. So, that would be my statement, is simply 
concern about water quality, and the amount of water, when it 
comes.
    The Chairman. Yup.
    Let me just say, I'm drinking West Fargo water right now. 
It is very good. Far superior to Washington, DC, water, I'll 
tell you that.
    [Laughter.]
    The Chairman. So, you're doing something right, here, 
because this is very good water quality.
    Mr. Burian. Senator, are you sure it's not coming out of 
that--
    [Laughter.]
    Mr. Burian. I'm sorry.
    The Chairman. Did you know that the source of water is West 
Fargo?
    [Laughter.]
    Mr. Burian. But, I bet it's been spruced up a little bit.
    The Chairman. You think?
    [Laughter.]
    The Chairman. It's very good.
    Any final statement you'd want to make, Steve?
    Mr. Burian. I might have in trouble with the last one.
    [Laughter.]
    The Chairman. Let me just say that law enforcement is 
waiting for you outside.
    [Laughter.]
    Mr. Burian. I guess the only point that I made as I was 
sitting in--or thought that I had, sitting through the previous 
panel and the questions you asked, were--there were some 
comparisons made to other systems across the State that are 
drinking water that has higher levels of sulfate, and how 
that's deemed acceptable. I'd like to point out a couple of 
things.
    I have tracked down that data. And if you start to list 
some of the communities which I think would--may be unfair to 
start pointing them out in the testimony, even though I have 
them in front of me--these are communities that are, you know, 
sometimes 30 people or 40 people. Some of them have already 
been switched to rural water since the data was published, and 
a lot of them have plans to do that.
    There are a couple of systems that start to approach maybe 
1,000 people or 2,000 people. Every one of them, to a city, are 
looking at supplemental treatment to try to address the 
aesthetics of their water.
    And then, I would also guess that, when you say they're 
drinking it, and everything's safe, that, when you get a water 
that has that marginal quality, I'll bet every one of them is 
using that same trick that I pointed to you-- behind you, where 
they may bathe in it, and they may do other things in it, but, 
when it comes to drinking water and coffee and other things, 
they're probably either treating that with home treatment units 
or hauling water to mitigate the impacts.
    The Chairman. Okay. Very important to know.
    Governor, any final statement you'd want to make?
    Governor Hoeven: Well, again, Senator, good to be here with 
you, and also to the Mayors and to the Commissioner and the 
Commission members--I saw Ken Pollock and other Commission 
members here, as well.
    Appreciate the spirit of cooperation. The approach, again--
I mean, it's everybody working together. It's storing water in 
the upper basin, it's all the mitigation we talked about, in 
and around Devils Lake, and it's moving water out of the lake 
in a way that not only helps with the flooding upstream, which 
we need to do, but protects downstream interests.
    As was pointed out very clearly in the testimony, we need 
to move water out in a controlled way, both in terms of the 
amount of water, so that we don't have flooding, and also so 
that we manage water quality. And I think everyone that's 
testified here, both from the State level, from the community 
level, the county level, and private individuals--experts, 
engineers--in terms of talking about the approach we're 
talking--it's an approach that protects downstream interests, 
as well. And so, that funding's already in place, from a 
Federal and State level, to help Valley City with their water 
treatment, so that they have the reverse osmosis that Steve and 
others have talked about. And that's exactly what we're talking 
about with this joint effort between Fargo and West Fargo. And 
it's got the added element of Fargo and West Fargo coming 
together on a joint water supply system.
    Again, I would comment that this is actually the backup, 
the secondary system. The main system comes off the Red itself; 
the Sheyenne comes into this community north of the Red. So, 
this is a backup system.
    But, I think, from the State of North Dakota, there's a 
real commitment to work with Fargo and West Fargo and local 
communities to make sure that they have the water treatment 
facilities in place that they want, and that best serves the 
citizens.
    And so, now we turn to the Federal task force. And, like I 
say, we're looking at that September 7th date for them to come 
forward with us so that we can continue to move water out of 
the lake, and also take these other steps, as well.
    Thanks. And again, Senator, thanks, to you. And we've had 
good dialogue, I think, both at these hearings, but as well as 
just offline between us, this joint effort, and that needs to 
continue.
    So, thank you.
    The Chairman. And it will, and we appreciate very much, 
Governor, your taking your time to be here. I think that was 
important for these communities. We're listening, paying close 
attention to their concerns. And I think the witnesses have 
done an excellent job of making clear what these downstream 
communities face. And these concerns are fully legitimate and 
have to be addressed.
    I think the final point I want to make is, we are all in 
this together. Some have posited this as the Devils Lake Basin 
against the downstream. That just isn't the circumstance, as I 
see it. After hours and hours of testimony, after hundreds--
literally hundreds of meetings over the last 15 years, it is as 
clear as it can be that we are all in this together, because if 
there is an uncontrolled release out of the east end of Devils 
Lake, everybody suffers. Certainly, the Devils Lake Basin is 
the first to suffer, but it is no--by no means exclusively 
their suffering, because every community downstream would 
suffer immeasurably; first of all, by flooding, beyond anything 
we have ever seen since this area of the State was populated; 
secondly, by water quality levels that the treatment facilities 
can't handle, that our human systems can't handle if there is 
an uncontrolled release of water out of the east end.
    So, it is entirely in all of our interest to find 
alternatives. And as we examine the various options, one that 
presents itself is releases out of the west end. A State outlet 
that has now been expanded from 100 cfs to 200 cfs, but is 
limited in duration of how it can operate, under the current 
regulations, presents itself as something that has to be 
considered. And if it is, if that becomes part of the solution, 
then we're going to have to deal with additional water 
treatment downstream. I think that becomes clear, based on the 
testimony that we've heard here from the mayors, and from Mr. 
Vanyo and Mr. Burian.
    So, with that, I thank everybody for their patience. I 
thank them for the professionalism of the testimony that we 
heard here.
    And again, Governor, my personal thanks for your being here 
to hear this, as well.
    With that, the hearing stands adjourned.
    [Whereupon, at 10:46 a.m., the hearing was adjourned.]


  FIELD HEARING DEVILS LAKE FLOODING DISASTER: HOW SHOULD DOWNSTREAM 
                         IMPACTS BE ADDRESSED?

                              ----------                              


                        TUESDAY, AUGUST 17, 2010


                                       U.S. Senate,
                                    Committee on the Budget
                                               Lisbon, North Dakota
    The Committee met, pursuant to notice, at 1 p.m., at the 
Stake Out Supper Club and Lounge, 6840 Highway 32, Meeting 
Room, Lisbon, North Dakota, Hon. Kent Conrad, Chairman of the 
Committee, presiding.
    Present: Senator Conrad.
    [presiding].

              OPENING STATEMENT OF SENATOR CONRAD

    The Chairman. Is that better?
    [Laughter.]
    The Chairman. OK.
    Voice:----
    The Chairman. Yeah. Sorry for that little technical glitch. 
Want to welcome everyone to this hearing of the Senate Budget 
Committee. This is an official hearing of the committee, and so 
we will be abiding by the rules of the U.S. Senate. And an 
official record of this hearing is being kept. The title of 
this hearing is, Devils Lake Flooding: How Should Downstream 
Impacts Be Addressed?
    I want to begin by welcoming our distinguished witnesses 
today. We have two panels. I will have the Governor go first. 
I'm delighted that Governor Hoeven has joined us again today. 
He was with us yesterday in West Fargo, and he has been with 
us, previously, in Valley City and Devils Lake. I very much 
appreciate his taking his time to come and testify and be part 
of this listening session as well. We also have, as part of the 
first panel, Todd Sando, the State engineer for the State Water 
Commission--Todd, thank you very much for being here--Lisbon 
Mayor, Ross Cole; and Fort Ransom Mayor, Jim Thernes.
    Our second panel will include Neil Olerud, chairman of the 
Ransom County Commission; Teresa Rotenberger--I hope I'm 
pronouncing that right--is it Rotenberger--is that the 
correct----
    Voice: It's Rotenberger.
    The Chairman. Rotenberger? Is that correct?--the emergency 
manager for Ransom County; and former Lisbon mayor, Morrie 
Saxerud.
    I understand the Valley City mayor, Bob Werkhoven is here, 
as well. I think I saw Bob.
    Welcome. Good to have you here as well.
    I look forward to hearing from each of our witnesses here 
today on how we should address the flooding disaster in Devils 
Lake and the impacts downstream.
    Since 1992, Devils Lake has risen nearly 30 feet. Tens of 
thousands of acres of productive farmland have been subsumed, 
and hundreds of homes have been moved. The transportation 
network, including the railroads and the roads, have been 
disrupted, and the local economy continues to be affected. Last 
year alone, the lake rose 3 and a half feet, and this year it 
reached a record elevation. Devils Lake is now within 6 feet of 
the natural overflow. Finding solutions to prevent an 
uncontrolled release of water is in everyone's best interest, I 
believe.

[GRAPHIC] [TIFF OMITTED] T8154.390


    Experts tell us the wet cycle in the Basin is likely to 
continue for years. There's no way to predict exactly when the 
normal cycle will return, but we have been told, by those who 
forecast long-term weather trends, that there is a 72 percent 
chance the wet cycle will continue 10 years or more, a 37 
percent chance it will continue for 30 years, and a 14 percent 
chance that it will continue for at least 60 years. I don't 
know how much credibility, frankly, any guy that can put in a 
forecast that goes for these very long periods of time, but 
that is the forecast that we have been provided.

[GRAPHIC] [TIFF OMITTED] T8154.391


    An uncontrolled overflow would clearly cause significant 
damage downstream. The quality of the water released would be 
extremely high in sulfates, five times worse than if the water 
was released from the west end. Let me just say, 
parenthetically, that that's one of the things that--hard to 
appreciate about this lake. You know, you'd think of a lake, 
that the water quality be pretty much the same any place in the 
lake. That is not true of Devils Lake. There is a natural flow 
to the lake. The water coming in from the northwest flowing 
east, picking up sulfates and other dissolved solids as it 
moves east. And so, the water quality is about five times worse 
out of the east end, which is where the natural outlet occurs, 
versus the west end, where the State outlet has been 
constructed.

[GRAPHIC] [TIFF OMITTED] T8154.398


    Drinking water systems, drawing from the Cheyenne River, 
could be impacted if there is an uncontrolled release of water. 
Discharges from Lake Ashtabula could be nearly twice what was 
experienced during 2009--twice what was experienced during 
2009. And some properties would be flooded for an extended 
period of time, making recovery extremely difficult.
    The unprecedented flooding, experienced in Lisbon, Fort 
Ransom, and Ransom County, in 2009, gave a preview of what we 
could potentially see if Devils Lake overflows in an 
uncontrolled manner. We won the flood fight then, but it took a 
Herculean effort in every community south of Devils Lake. And 
victory came at a considerable cost. A cost of rapidly building 
protective defenses; a cost of damaged infrastructure, 
including many homes; and a cost of lost income for residents 
who left their jobs to aid in the fight.
    The Mayor has just taken me on a brief tour of parts of the 
town heavily impacted by the last flood. Many homes, that still 
have dike right up against them, and many other homes that have 
the dike running through their backyards even today.
    I think all of us understand the stress created by previous 
floods. And all of us want to avert another experience like 
that one, one that has the potential to be even more serious.
    When the flooding disaster began we worked cooperatively on 
a three-pronged strategy and there was strong agreement between 
the Federal Government, State leadership, and local leadership 
on the three elements of the strategy. No. 1, Upper Basin 
storage. No. 2, protecting vital infrastructure, including 
roads, bridges, buildings, water systems. And, the third leg, 
was the construction of an outlet.
    I want to indicate that, in 2000, we secured approval of a 
Federal outlet, and there was a determination made at the time, 
by State and local leadership, that they could not afford their 
35 percent share of the cost of that structure, which would 
have been about $200 million. State and local share would have 
been some $72 million. The State believed that they could 
construct an outlet at less cost and went forward with that 
project with our support. That project started with 100 cfs 
capacity outlet that has now been increased to 250 cfs.
    Just in terms of a Federal commitment of dollars to this 
crisis, it has now reached--more than $700 million has been 
allocated, with another $200 million to be spent in the next, 
approximately, 12 months. So, we'll be talking, by a year from 
now, of more than $900 million of Federal dollars committed 
here. 400 million for the road network; FEMA has spent 84 
million, since 1993, on repairing damage to public 
infrastructure; the Corps of Engineers has spent 200 million, 
since 1993, on the levee, evaluation of a Federal outlet, and 
other protective measures; HUD has provided more than 11 
million. In terms of going forward, in this next year, we have 
another $100 million of road work scheduled, we have another 
almost $100 million being spent on the dike protecting Devils 
Lake.

[GRAPHIC] [TIFF OMITTED] T8154.384


    And, by the way, if that dike had not been raised--had not 
been raised several times now, the entire town of Devils Lake, 
or virtually all of Devils Lake, would be under water. Some of 
Devils Lake would be under 20 feet of water today. That is the 
reality. And the lake continues to rise.
    We've always understood that only comprehensive solutions 
will succeed in the long run. The problems of Devils Lake can't 
be solved by simply flooding everything downstream. This is a 
shared responsibility, this is not just a Devils Lake Basin 
problem, this is now a problem for the entire region. And the 
region extends from Devils Lake to Valley City, here to Lisbon 
to Fort Ransom, and then goes over to West Fargo--that's why we 
had a hearing there--and right up the Red. So, we're talking 
about something that has an effect far beyond the boundaries of 
the Devils Lake Basin.
    Since the May Flood Summit in Devils Lake, the 
administration has convened a working group to evaluate both 
short- and long-term options. The working group has 
representation from all the relevant Federal agencies, 
including the Corps of Engineers, which is heading up the 
effort, FEMA, the Department of Transportation, USDA, the 
Bureau of Indian Affairs, the Environmental Protection Agency, 
the U.S. Geological Survey, and others. The group's 
recommendations are now expected in September. I have 
emphasized, to this group, that the interest of downstream 
communities must be fully considered as options to manage this 
devastating slow-motion flood are identified.

[GRAPHIC] [TIFF OMITTED] T8154.386


    I am pleased that members of the working group were in 
Valley City last month to hear directly from local leaders on 
these options. And, next month, a delegation of local and State 
officials will be invited to Washington to meet with the 
working group as its recommendations are finalized. So, from 
the perspective of those downstream, what options should the 
Federal Government consider to deal with this flooding 
disaster? And what, specifically, should be done to mitigate 
downstream impacts?
    I am particularly interested in hearing from our witnesses 
on where they think the working group should focus its 
attention, as it relates to downstream impacts. I intend to 
share that information with the working group as they finalize 
their recommendations.
    With that, we'll turn to the Governor for his opening 
observations and comments. Again, I want to thank the Governor 
for his taking his time, repeatedly, to address this issue and 
for his participation in each of the hearings that we have 
held, both in the Devils Lake Basin and outside the Devils Lake 
Basin. Again, Governor, welcome, and please proceed with your 
testimony.

    STATEMENT OF HON. JOHN HOEVEN, GOVERNOR OF NORTH DAKOTA

    Governor Hoeven: Thanks, Senator. Good to be with you. 
Appreciate you holding these hearings.
    Clearly, communication is an important part of meeting this 
challenge. And, it has to be a team effort. And it has to be a 
team effort in a number of respects. One, is it needs to have 
local, State, and Federal representatives working together. And 
so, it's great to see so many of you here from, not only 
Lisbon, but the surrounding area in Sheyenne Valley.
    Mayor Thernes, thank you for being here, from Fort Ransom.
    Of course, Mayor Cole, former Mayor Morrie Saxerud--it--you 
know, it's interesting to be here and see so many of you, as 
well as Teresa, John Cameron, and Mayor Werkhoven, and others, 
so many that, you know, we've worked on the flood battles 
through the years. And, of course, that, again, dealing with it 
this spring, dealing with it, in a big, big way, in 2009. But, 
great to see so many of you here.
    Senator Dotzenrod, thank you for coming as well.
    Former Representative Bob Hunter. Bob, thank you for being 
here. I saw--yeah, here he is.
    And, you know, like I say, there's got to be a team effort. 
It's got to be local leaders, State officials, our Federal 
delegation all working together on this. And it's got to be an 
approach where we have people, throughout the region, working 
together.
    Good to see you again, Joe Belford, thank you for being 
here and for your efforts to pull people together and to 
communicate our efforts to deal with the Devils Lake flooding 
situation.
    We really are working to go forward with a three-part plan 
that includes storage of water, in the Upper Basin; mitigation 
in and around Devils Lake, building up roads and dikes; and 
moving water out of the lake in a way that protects downstream 
interests. And it takes all three, so it takes people in the 
Upper Basin, people in and around Devils Lake, and people in 
the Sheyenne Basin and lower basin--downstream areas--as well 
as along the Red; all of us working together to meet this 
challenge.
    First, in terms of storage in the Upper Basin: the lake, in 
1993, covered about 49,000 acres; today it covers more than 
180,000 acres. I'll repeat that. So, in 1993, the lake covered 
about 49,000 acres, today it's 30 feet higher and it covers 
180,000 acres. That's almost 130,000 acres that are inundated. 
That is an incredible amount of water, right there, that's 
being stored in the Upper Basin. And that doesn't even take 
into account all the wetlands and other areas where we have 
water stored in the Upper Basin.
    In addition to listening to those numbers, I would 
encourage you to just go up and take a look. Just go up and 
drive--and it's a long drive, right Joe?
    Mr. Belford. Yeah.
    Governor Hoeven: Drive around Devils Lake. Drive around the 
west side, up along the north side and east side. The lake is 
huge. But, what you're going to see, all the way up to--and 
other areas, is huge amounts of water that is being stored in 
the Upper Basin. So, we're storing a lot of water up there, 
right now.
    Second, Senator Conrad just mentioned, about $700 million, 
between local resources, State resources, and Federal 
resources, have been put into raising roads and dikes in and 
around Devils Lake. Another 200 million is planned. OK? Now, 
that's 700-million-plus dollars going into raising roads and 
dikes.
    For example, right now, we are raising State highways 19 
and putting in a riprap and other production features, and 
resurfacing and so on and so forth. But, Highways 19, 
Highways--Highway 20, Highway 57, and even Highway 2 had water 
across it this year, after one of those heavy rains. And we had 
to go in and start doing emergency work before we even had 
Federal approval to do it. And we'll work to get that Federal 
approval, but we had to go in and raise the road, so that 
traffic could continue to pass. In addition, then you've got 
all the dike work, as well you've got all the IA work on the 
reservation. So, an incredible amount of mitigation, but 
understand we're at the point now, where we're within feet of a 
whole new round of infrastructure that's going to be impacted. 
Right? I mean we already moved Highway 281 further to the west, 
but right now we're in a situation where if it goes up a couple 
more feet----
    For example the Empire Builder Rail Line, there's a bridge 
up there that we're going to have to raise. Just to raise that 
one bridge alone is $65 million. And, again, we've worked with 
the delegation, with Burlington and that, but just that one 
bridge is $65 million. And we're within a foot or two of not 
being able to have the Empire Builder Train go across that 
northern tier, and that's a track that goes coast to coast.
    Another example, town of Minnewaukan, working with Mayor 
McCoy, your counterpart up there, who's been tremendous. And, 
again, great example of local leadership, but we're right at 
the point where we're going to have to move the community. The 
water is right there up against the school grounds, and that's 
a growing school district.
    You know, so, we're right at the point where we have 
significant infrastructure impacts, that another foot or so 
means huge expenditures. So, we've got to move water out of the 
lake as well. And we're doing that. The outlet that we've built 
is running at 250 cubic feet a second. That's a lot of water. 
The key is that we bring it out in a way that also protects 
downstream interests. But, we need to continue to move that 
water out, and we need to do it over a longer period of time, 
and we--or we need to, actually, continue to increase the 
volume.
    And so, that's really a big part of what we're working on, 
with our Federal partners, is, the task force now is going to 
come out with recommendations, on September 7th, I believe is 
the target date right now. And we'll be back working with the 
delegation--local leadership will be back; they're looking at 
some draft reports beforehand. But, about September 7th they're 
going to come out with some recommendations, and it's very 
important that the Corps and the EPA work with us to bring more 
water out, in a controlled way, so that we, you know, have some 
margin, even going into next spring, in terms of that lake 
level.
    So, we've got to continue to bring the water out, to 
address this problem, as part of a three-part strategy. We need 
help from Federal authorities and this task force to do that. 
We also need help from you. We have to be working with you. We 
have to do it in a way that is protective of downstream 
interests and we're working to do that.
    One of the issues that--obviously, that we've talked 
about--Mayor Werkhoven and others and John Cameron, in the 
Valley City area--is the sulfate levels. And, between the State 
of North Dakota and the Federal Government, we've provided 
additional resources to Valley City to add reverse osmosis to 
their water treatment plant. So, we're actually building a new 
water treatment plant that will provide significantly--will 
provide capacity for growth, but also reverse osmosis to take 
sulfates out of the water, so that--protect their water 
quality. Very important we keep moving on that and keep that 
going, because of the situation where we need to continue to 
move water out.
    At the same time, down here, you don't take your water from 
the Sheyenne, but we want to make sure that, in terms of, you 
know, flood protection, that the diking that we're looking at 
working with FEMA and the Corp to do, along the river here, the 
mitigation of housing, that it's all coordinated. And that's 
the real challenge, as Mayor Cole is probably going to testify, 
we have study going on, right now, that we funded through the 
Water Commission, with more engineering on behalf of the city, 
to really take a look at, How do we do this diking down here, 
with our Federal partners, with the Corps, with FEMA? How do we 
do this in a way that's good for this community?
    And, Senator Conrad, you mentioned about some of these 
dikes right up against houses. I mean, I can remember, as we 
were working on flooding, particularly in 1909, some of those 
dikes were incorporated right into the wall of, like, the house 
or the garage. You know, here'd come the dike, and then part of 
the dike was the wall of the garage in some of these homes. 
Just an amazing thing to see what the Corps and our National 
Guard people could do. But it's very important that we work 
with the community to get this set up--this flood protection 
set up in a way that works well.
    And so, all of this goes together, is the point I'm making. 
In terms of Devils Lake, you know, as far as bringing water out 
of there, we'll do that in a controlled way so that it wouldn't 
add to the flooding, but at the same time we need to have a 
control structure on the east end to make sure that you don't 
get an uncontrolled overflow and flooding in that regard. So, 
all of this ties together, whether it's water quality issues, 
whether it's flood mitigation or protection from flooding. And 
that's absolutely what we're working to do here. And making 
sure that we're working with local leadership to do it in a way 
where people know exactly what's going on, and that it protects 
downstream interests, as well as helps address this flooding, 
which we have to do for the Upper Basin and for Devils Lake.
    So, with that, thank you, Senator. Appreciate it very much. 
And I'll look forward to our panels.
    The Chairman. Thank you very much, Governor. And, again, we 
appreciate your taking your time to be here and participate in 
all of this set of hearings.
    We'll go to our first panel. Todd Sando, State engineer for 
the State Water Commission, to help us understand better the 
technical issues that we're confronting.
    Todd, welcome.

  STATEMENT OF TODD SANDO, STATE ENGINEER, NORTH DAKOTA STATE 
                        WATER COMMISSION

    Mr. Sando. Thank you, Senator.
    And my name is--for the record, my name is Todd Sando. I'm 
the State engineer, and chief engineer and secretary for the 
North Dakota State Water Commission.
    I do have 25 copies here, for Tracy. I do have written 
testimony; I'll just kind of paraphrase the testimony. I do 
also have attached to the testimony--on July 8th, there was a 
hearing held in Devils Lake, and I went into great detail--and 
that testimony was rather lengthy--about the history and the 
background on some of the issues with Devils Lake flooding, and 
plus the--what we've been looking at to try to alleviate the 
situation, several of the things that the Senator and the 
Governor had explained. So, that's also attached to the 
testimony.
    So, for today, the things I want to concentrate on, just a 
quick rundown on the history. We've been in this flooding 
situation for 17 years. And you've heard that the lake's risen 
30 feet, so it's--spring of 1993 it was at 1422, and now we're 
at 1452 and the lake's not dropping at all right now. Usually, 
at this time of year, we start seeing the lake fall and--but, 
we've continued to have precipitation events week after week 
after week. So, it's been above normal temperatures and above 
normal precipitation.
    So, the lake's really at a dangerous level. We're within 6 
feet of an overflow, the overflow elevation's 1458. There's 
only 1.3 million acre-feet of storage remaining between 1452 
and 1458. And, for this late in the summer, not--to see the 
lake still right around the peak elevation for the year, it 
does not bode well for next year. Usually, that's a sign that 
we'll see, you know, new record highs. So, there's a major risk 
that we'll see new record highs again next year. And the 
weather forecasts still talk for above normal precipitation, 
and there could be another winter of excessive precipitation, 
too. So, lots needs to be done in the very--coming months. And, 
hopefully, the Federal task force comes up with some good 
recommendations and we can start really pushing forward with 
some funding and implementation of the alternatives.
    What's taken place--we did build an emergency outlet and it 
was completed in 2005. So, you've heard about this three-
pronged approach. And the third part of the solution and, 
probably, the most critical part of the solution, is to get 
water out of Devils Lake. And so, we worked a few years on 
constructing a temporary emergency outlet, that was 100 cfs 
outlet, and that was completed in 2005. And we started running 
it late that year and we were able to get a little bit of water 
out. One of the big issues, we want to protect downstream 
interests, so we have constraints on the outlet; it's related 
to water quality and to flood control.
    So, 2006 came, it was an extremely hot, hot year and the 
Sheyenne River flows were really low. So, the Sheyenne River is 
needed to help lend Devils Lake water. In 2006 the outlet did 
not run, because we could not meet the water quality 
constraints. So, then in 2007, 2008, we started getting some 
water up, but we were constrained a lot by the water quality 
issues on the Sheyenne River, the set standard is 450 
milligrams per liter. And so, we weren't able to get a lot of 
water out. So, in 2009, after the big flood event we had, last 
year was the No. 1 inflow event into Devils Lake. It was 
590,000 acre-feet.
    And we when--we had the Governor and the Water Commissioner 
went to Devils Lake last summer--in fact, they were there many 
times, but on one of the tours up there we've made a decision 
that we needed to upsize the outlet. And the water commission 
acted on that, and we started designing construction of an 
outlet late last summer. And we built it all last winter, and 
we had it in operation by the, you know, the end of spring this 
year. So, the outlet now can be run at 250 cubic feet per 
second. So, we expanded the outlet from 100-cfs temporary 
emergency outlet to a 250-cfs. So, it's 2 and a half times 
larger.
    So, now, if we could operate that 7 months a year--the goal 
is to operate April 1st through November. We do get constrained 
because of flooding, a lot of times, in April and early May, 
but the goal is to try to get 100,000 acre-feet of water out a 
year, during a 7-month operation. So, our outlet is just 
designed to operate during the open water season, not during 
the wintertime. So, last year----
    The Chairman. Can I stop you on that point?
    Mr. Sando. Sure.
    The Chairman. And ask, Why is that the case? Is there the 
possibility of running the outlet in winter months? And I ask, 
because a gentleman stopped me yesterday, after our hearing in 
West Fargo, and said, ``Why don't you consider running that 
outlet more during the winter, when you'd have less problem of 
bank erosion?''
    Mr. Sando. OK. Senator, to answer that question, it's--
there's many reasons why we didn't go with winter operation. 
First of all, the sulfate levels, you talked about that, and 
the levels of sulfate. During the open water season, sulfate 
levels are a lot less--the numbers are lower. So, right now, 
when we've been operating the outlet, the west end of the 
outlet has been between 550 and 600 milligrams per liter, or 
parts per million. But, what happens when we have ice--when ice 
forms, all the freshwater form in the ice, so all the 
concentrated dissolved solids are still in the water column. 
So, the water that we would pump out, in the wintertime, would 
have--be much more concentrated. So, the Health Department's 
got samples that show--like, West Bay is 800 milligrams per 
liter, and that's even above this temporary emergency rule that 
we have right now, through the Health Department, to operate. 
So, that's our biggest problem is, in the wintertime the 
concentrations go much higher than the open water season.
    Next big issue with our outlet, we have a 14-mile long 
outlet and 10 miles of it's open canal--and it's an open 
channel. So, we'll--we have issues with icing on this open 
channel. So, we got this channel at a gradient, and if ice 
starts forming, in November, around Thanksgiving or whatever, 
we're worried about--the first couple miles of open channel 
goes to our second pumping plant, called Josephine Pump 
Station--so when ice starts forming with--the ice would move 
down the channel, because, you know, the channel's at a slope, 
so there's velocity. It's not like a lake where the lake just 
freezes. So, the ice, once it starts forming, it's going to 
move toward our pumping station. So, the best way to have 
winter operation is a closed system. Our system, right now, of 
the temporary emergency outlet that was built as an open 
system, has 10 miles of open channel. So, ice is a big problem.
    Another problem with ice is, at the very bottom end of our 
outlet, we have--when we drop the water in, from the outlet to 
the Sheyenne River, we weren't able to build the outlet all the 
way right in to the Sheyenne River. We had to stop short of an 
oxbow channel, because environmental compliance, NEPA, 404 
jurisdictional issues are--all that stop there. So, our water 
comes out this terminal structure and just flows over it, and 
flows over land into this oxbow channel and then it works its 
way down this oxbow channel into the river. So, if we'd run 
that in the wintertime we would just form a major glacier and 
iceberg right there.
    And, you know, the best way to do that is have a pipe go 
right to the Sheyenne River, right in the bottom. Now, if we 
could get permits to do that, that's what we--you know, that 
would be the best way. So, in order to operate in this winter 
we really need a closed system. We've got to enclose a lot of 
our stuff, our pumping plants, our channel. Really, probably 
the best thing to do is build a parallel outlet next it, a 
closed system to operate in the winter. But, our--still our 
biggest problem is sulfate constraints.
    The Chairman. And what would the cost be of a closed 
system?
    Mr. Sando. We got some real rough numbers. I mean I don't 
have a good cost estimate. But----
    The Chairman. And do----
    Mr. Sando. And----
    The Chairman [continuing]. You know if it's in order of 
magnitude? And are we talking----
    Mr. Sando. Yeah.
    The Chairman [continuing]. Like----
    Mr. Sando. I could do that----
    The Chairman. 10 million, 50 million----
    Mr. Sando. Yeah.
    The Chairman. --100 million?
    Mr. Sando. Yeah. We're talking 100 million for only, like, 
50 cfs. And we feel we don't--you know, there probably isn't 
much of a need to have a real big outlet in the wintertime. So, 
one of the things we've been looking at is like a 50 cfs, in 
the wintertime, closed system. And it'd probably be on the 
lines of $100 million. So, when we try and get winter 
operations it's very expensive alternative.
    The Chairman. OK.
    Mr. Sando. OK. Well, I was, you know, talking about--well, 
I can just continue on, on options of--you know, for ways to 
relieve the flooding at Devils Lake. And the--one of the things 
was this winter operation, like you're talking about, try to 
get additional days to operate, so we can get more water out.
    The other big way we can benefit, to get more water out, 
you know, at 250 cfs we can get 500 acre-feet a day. If we 
could add additional capacity, too--not just lengthen the days 
that we operate, but have more capacity than 250. So, you know, 
if we can add another 100, 200, 250 cfs, somewhere, to come out 
of the lake that would really help, because right now, at 100--
100,000 acre-feet--at a--250 cfs can remove up to 100,000 acre-
feet a year. And I testified, like in Valley City and in Devils 
Lake, evaporation would probably take another 100,000 acre-feet 
off. So, that's 200,000 acre-feet. And the hydrology, during 
this wet-cycle that we've been in, since 1993 to current, the 
average inflows to Devils Lake are--I got a number--it's 240-
some thousand acre-feet.
    The Chairman. The inflows----
    Mr. Sando. So--Yeah, the inflows. Yeah, to be exact, 
243,700 acre-feet. So, between running the outlet nonstop, if 
we wouldn't be constrained by water quality and flood 
constraints and we'd have some decent evaporation, where we 
could get 100,000 acre-feet out, between the two we could get 
200,000. So, we're getting closer to keeping up with this wet-
cycle average inflow, but the averages are made out of 
extremes. And, like I'd mentioned, 2009 was 590,000 acre-feet. 
So, if we get another big year, like we had in 2009 or 1997, 
real soon, Devils Lake----
    The Chairman. Let's repeat that so the people--that we can 
help people understand. 2009, the inflows were 590,000 acre-
feet. Typically, we've been averaging 240,000. If we ran the 
State outlet at the 250 cfs, full tilt, year round--year round, 
that would take off 100----
    Mr. Sando. That would be----
    The Chairman [continuing]. Thousand cfs?
    Mr. Sando. That would be for 7-month operation. We could 
get----
    The Chairman. 7 months.
    Mr. Sando. --100,000----
    The Chairman. If we were----
    Mr. Sando [continuing]. Acre-feet.
    The Chairman [continuing]. Running at full tilt for 7 
months that would be 100,000?
    Mr. Sando. Right.
    The Chairman. And we typically get 100,000 of evaporation. 
So, even that wouldn't quite keep the lake stable. The lake 
would still be going up, assuming the wet cycle continues.
    Mr. Sando. That's correct.
    The Chairman. But, even more--of more concern, is 590,000 
acre-feet came into the lake in 2009. If we have another event 
like that we got a really serious problem.
    Mr. Sando. Yeah. That would put at least 3 more feet on the 
lake, so we'd be at 55 within--you know, less than 3 feet from 
overflow.
    The Chairman. And, is the way of thinking about this is, we 
got 180,000 acre-foot lake, now, in terms of surface area, so 
if you have 590,000 acre-feet coming in, you're going to raise 
the lake more than 3 feet.
    Mr. Sando. Right. So, I----
    The Chairman. That's the way that calculation works.
    Mr. Sando. Right. At 100,080--180,000 acres at one foot, 
that's 180,000 acre-feet. Surface area keeps getting bigger, so 
the next foot the surface area might be 195,000 acre-----
    The Chairman. So----
    Mr. Sando. --195,000----
    The Chairman [continuing]. To take----
    Mr. Sando [continuing]. Acre-feet.
    The Chairman [continuing]. The lake down a foot, we would 
have to take off 180,000 acre-feet net. And if we've got 
240,000 coming in, you got 100,000 evaporation, you got 100,000 
if you're running the outlet full tilt, you got to have another 
180,000--or actually 220 in order to take the lake down a foot.
    Mr. Sando. Yeah.
    The Chairman. So, that kind of puts it in perspective, what 
we're dealing with here, as this lake continues to rise.
    Mr. Sando. OK. So, I've mentioned what we could do for our 
west end, that'd be either, you know, trying to operate more 
days out of the year or adding additional capacity.
    The next thing would be looking at, you know, with this 
risk, the probability, right now, of overflow in the next 20 
years shows a 13 percent chance of the lake overflowing. This 
is a stochastic model that the USGS has put together. So, you 
know, there's a high risk of it overflowing. And, with the 
outlet rate now, we could cut that risk in half to about 7 
percent with a 250 cfs outlet. So, a 7 percent risk is still--I 
mean, when you develop a 100-year floodplain, that's a 1 
percent risk, so the risk is still unacceptable--it's 
unacceptable risk for that region of the State.
    So, really, the next thing to do--to look at would be try 
to get water out further toward the east end of the lake. So, 
one of the things we're looking at is--as you know, the water 
quality, as you mentioned, gets much worse as you go from west 
to east. And you kind of summarized it saying, it's like five 
times worse. And so, basically, the sulfate levels in these--in 
East Stump Lake and West Stump Lake are like 2600 milligrams 
per liter, or parts per million. And we've----
    The Chairman. Let's go over that again, so that people hear 
this as simply as we can state it. Basically, the sulfate 
concentrations are about 500 in the western part of the lake 
and 2500 in Stump Lake, is that roughly----
    Mr. Sando. Yeah, that's roughly a fair scenario. Yeah. We 
were operating last year the outlet, and the sulfate levels 
were between 550 and 600 out of Round Lake which is the west 
end of the lake.
    The Chairman. OK.
    Mr. Sando. So, what this 2600--that's, you know, parts per 
million sulfate levels in Stump Lake, I mean, that's way over 
the standards. The standard's 450, we have emergency rule for 
750, we wouldn't be able to get any drop of water out with--
unless, you know, there's a variance or something drastically 
done differently. So, Stump Lake--it's going to be very 
difficult to get any type of water out of there. So, if we 
try--add, you know, more capacity--one of--alternatives of the 
Water Commission, and we've been looking at is take water out 
of East Devils Lake, which is one lake further to the west, 
that's before it flows through Jerusalem Coulee into the Stump 
Lakes.
    The Chairman. And what's the water quality level at 
Jerusalem?
    Mr. Sando. Sulfate levels there are like 2 and a half times 
better than Stump Lake. They're like 1000 milligrams per liter, 
or 1000 parts per million, for sulfate levels. So----
    The Chairman. Still that is well above even what we have on 
the variance, because right now you've got 750--right?
    Mr. Sando. That's correct.
    The Chairman [continuing]. That is permitted to--although 
we're not--we don't see that high a level. What's coming out of 
the west is more like 550?
    Mr. Sando. Yeah.
    The Chairman. 550 parts per million. What's permitted is up 
to 750, but at Jerusalem that would be 1000.
    Mr. Sando. That's correct.
    The Chairman. So, that's well above what is permitted, even 
with the variance that we have.
    Mr. Sando. Right. So--you're exactly right, Senator. So, in 
order to get water out of East Devils Lake, there, you'd have 
to even modify the standards even more on the Sheyenne River. 
And, what we'd look at to do, if that we're the case, we would 
like to try to blend west end water with east end water. So, 
say if there's 1000 milligrams per liter, east end water coming 
out, and, say, 600 west end, that averages to 800, so we're 
getting close to that 750 number. So, if we have a class 1-A 
stream at a 750 standard, blending west and east end equally, 
we could be around 750 to 800. We would--maybe we could just 
run a, you know, a smaller outlet out of East Devils Lake, so 
it would--you know, so when we'd blend it, we'd blend it up to 
750. So----
    The Chairman. And have there been any estimates of what the 
cost of that would be?
    Mr. Sando. We don't have a cost estimate, but it would be a 
much simpler way to get water out of Devils Lake, because 
that's another--not only does the water quality change, from 
one end to the other, the divide elevation for water to flow 
out of Devils Lake's a lot different. Our west end, we have to 
pump it up over a 100-foot hill. The water's only got 6 feet to 
get out of Stump Lake, and probably only has 12 feet to get out 
of East Devils Lake. So----
    The Chairman. So, the cost of an outlet structure there 
would be considerably less than an additional structure out at 
the west end.
    Mr. Sando. That's correct, Senator. It'd be much less money 
to spend on an East Devils Lake outlet. We could build a 
gravity channel out of there. And it would really--where it 
would really save us money, right now, it'd cost us $5 million 
a biennium to operate the west end outlet. And, say, if we 
wanted to double the capacity--say, if we wanted to--out the 
west end--we'd be spending $10 million just to operate, to pump 
water up a 100-foot hill. So, if we could have a gravity 
channel, our own annum costs would be a lot lower. So, it'd be, 
from, you know, an economic standpoint, make a lot of sense to, 
you know, not pump it up over a 100-foot hill, and just take it 
out over a 10-foot hill, and the best way to do that is 
actually cut a channel--a gravity channel out to allow the 
water to flow out East Devils Lake. And that would flow into 
the Tolna Coulee into the Sheyenne River. So, that's another 
thing I would like the Federal Government to, you know, be part 
of and look at, too, is possibly a blended outlet--west end, 
east end.
    So, those are the main things that we would like to look at 
is, you know, operate additional days, upsize west end outlet, 
look at East Devils Lake. I mean, anything's on the table. 
We're looking at going to any river or any direction too, but 
that's kind of what's coming to the surface, for us, in our 
analysis. And then, relaxing the standards, on the Sheyenne 
River, so we can get more water out.
    The Chairman. We've, actually, also asked the Corps of 
Engineers to look at running a pipeline from Devils Lake to the 
oilfields, for providing water for fracking in the oilfields. 
And, you know, we've tried to take every idea that's come to us 
and asked them to test it.
    We have also asked them to evaluate additional storage in 
the Upper Basin. The Governor is quite right, in the statistics 
that he's provided, of the expansion of this lake alone, from 
49,000 to 180,000. That's a substantial amount of storage. He's 
also right, if you go north of the lake--we just flew over it a 
couple of months ago in a helicopter, there's water everywhere. 
I mean, a lot of what was drained wetlands have been restored 
by Mother Nature. They are under water. We saw farmstead after 
farmstead after farmstead surrounded by water. And, you know, 
that's water storage that's occurring in the Upper Basin.
    Todd, go.
    Mr. Sando. OK. And, just to conclude then, the Federal 
agencies--the areas that--the ones that we really need help 
with are EPA, you know, dealing with the water quality 
standards; FEMA, that would--you know, if we can really get 
some waivers and variances so we can get the structures. We did 
an inventory on structures and all, that got inundated and 
there's 200 structures in the water, right now, that we need to 
deal with. And so, I mean, we--some better ways to get some of 
these structures out and get, you know, flood insurance 
programs, that type of thing, would be beneficial. State 
Department would be another big thing, with Boundary Waters 
Treaty, dealing with our neighbors and with Canada to the 
north. So--
    The Chairman. So--
    Mr. Sando [continuing]. Hopefully our--
    The Chairman [continuing]. We have 200 structures--now 
we've already moved some 600 structures out of harm's way. But, 
there are 200 structures that have been engulfed in the flood 
waters there. Is that what--
    Mr. Sando. 200 more since the spring of 2009, basically.
    The Chairman. 200 that have--not--that did not get moved. 
Now, part of this is, you know, we got waivers that allowed 
people to move their houses before they were inundated, but 
counties had to agree to a plan in order for that waiver to be 
enforced. Some decided they didn't want to go that route, and 
so, as a result, they don't qualify to get paid for a move 
before they're wet. So, that contributes to that issue.
    Mr. Sando. Right.
    The Chairman. You know, you can lead a horse to water and 
not necessarily--can't make them drink. It's too bad, because 
that program was working very well to get threatened structures 
moved, before they got wet. OK?
    Mr. Sando. OK. Basically, that completes my testimony. It's 
just--I mean, it's--like you said, it's not just a Devils Lake 
issue--
    The Chairman. Right.
    Mr. Sando [continuing]. It's a State of North Dakota issue. 
It's one of our most critical issues for our entire State, so 
we'd like to, you know, do whatever we can to help alleviate 
the situation. So, thanks for your time.
    [The prepared statement of Mr. Sando follows:]

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    The Chairman. Yeah. Thank you very much for your time.
    We'll go next to Mayor Cole, mayor of Lisbon, who has dealt 
with these flood issues. I just want to say, on a personal 
note, during the 2009 flood event, I was so impressed by Mayor 
Cole, and the way he hung in there and was looking out for 
people in this community night and day. And I really admire the 
leadership that you provided, Mayor. Thank you for being here.

       STATEMENT OF HON. ROSS COLE, MAYOR, CITY OF LISBON

    Mr. Cole. Thank you, Senator. And thank you for coming to 
Lisbon. We appreciate you guys being here, Governor, and you, 
to take your time to come to town and put on this hearing. We 
appreciate it very much.
    I just want to welcome you, and thank you for coming here 
today. I thank you for those comments, Senator, but I would 
have never been able to do it without the help of Morrie and my 
council members. That 2009 flood was not a one-person operation 
by a long shot. The Corps of Engineers were wonderful to work 
with, and it kind of went on from there. Just--it was a well 
oiled machine, basically. And, I don't know if we'd have been 
here today without it. But, thank you everybody. And let that 
be to the record.
    I did a lot of--a little talking with the Senator today 
over lunch, and we had a good visit. Lisbon, I think, is in 
favor of a--definitely, we know there needs to be an outlet 
in--coming out of Devils Lake. We've talked about, we know we 
have our friends down the--up the river and down the river that 
use the Sheyenne for drinking. And so, the sulfate contents 
need to be a very major part of the scenario for the outlet. 
Whether--you know, so--because they need the water, and it 
just--you know, we got them in our prayers and on our mind all 
the time, too. So, it needs to be part of the scenario. We----
    What needs to happen downstream for Lisbon? Well, we 
visited a little bit today, is that we have--had 18 homes in 
the FEMA buyout. So, did have a chance to buy one out in 2010 
flood, and we got that out of the way so we could build the 
levee, thanks to Morrie.
    [Laughter.]
    Mr. Cole. It was--we got in a little trouble over it, but 
we got through it. Anyways, we got one out of the way, and we 
have 17 more homes in the FEMA buyout.
    I was visiting with Tracy Essinger, our engineer here, the 
other day a little bit, along with Mike Hollen and we were 
looking at the proposed levies that we would like to see built 
in Lisbon. And all 17 homes are right in the middle of the 
levee. Well, you know, with FEMA--using FEMA dollars, you know, 
where does that put Lisbon? You know, and I hope we can work on 
some sort of a--some help, with FEMA, to try to let us--to 
maybe do some policy changes or something, that we can use FEMA 
dollars to buyout these homes. I don't know how we can come up 
with dollars otherwise. I think we could probably work with the 
State Water Commission, maybe, and work with some other, you 
know, Lake--, but I think it's getting to be time that--time is 
becoming a factor for us.
    The Chairman. Let me stop you there and just say, would--
you're being very diplomatic about--if we use FEMA dollars to 
buy out these 17 homes, FEMA policy then says we cannot build a 
new structure where those homes were taken from. And we 
understand that it doesn't make any sense to build another 
house there, doesn't make any sense to build another building 
there. But, their interpretation is that we can't build a dike 
there. That doesn't make any sense. We need to be able to build 
dikes where those homes are taken from, because those are the 
exact vulnerable spots, as we go down the river. And so, as we 
met, at noon today, we drafted a letter--rough-drafted a letter 
to FEMA asking them for a variance for Lisbon to, specifically, 
look at permitting, not another house, we understand that, that 
doesn't make any sense; not a building, that wouldn't make any 
sense; but to build a dike to continue the dike structure that 
comes into that area already. And that's what the mayor is very 
diplomatically asking for here. And it's an entirely reasonable 
request.
    Mr. Cole. Thank you. In 2000--and we talk about the 
waterflows. If something were to happen--in Lisbon, we are kind 
of--I was visiting a little bit with somebody from the--and I 
wish that I had gotten his name--but he was really good to work 
with, was a gentleman from the Corps--and we were talking about 
what would happen if there was a catastrophe, if Devils Lake is 
to overflow, things were to washout; if Tolna Coulee were to 
break loose, you know, there are, you know, probabilities, 
probably they aren't that strong, but it could happen. And, in 
2009 we had cfs running through Lisbon, at 10,000 cfs--is that 
correct Morrie? Isn't that what we had?
    Mr. Saxerud. Just under that.
    Mr. Cole. Just under 10,000. And talking to--and, I think, 
probably, in that time--that was probably over 7 days or 
longer, you know, give or take, not a lot. But, if something 
were to happen, they'd kind of--are looking that--they're 
telling me that we could have between 12,000 and 14,000 cfs 
coming through Lisbon. And this is where the kicker is, we're 
not talking 7 days anymore, we're talking 30 to 60, you know. 
That's a lot of water to try to keep out of the city for a long 
period of time.
    So, you know, it just--what doesn't make sense to me, is 
another issue, and I hate to keep bringing up the FEMA word, 
but they're talking to me now that--we do have some nice 
temporary levies up, in place. And they did a good job this 
last winter, we had time to get things done and they built 
well. Now they're coming around and--we had a little visit the 
other day, and it sounds like they want us to take levies down 
that are--anything that's in the floodway. Well, you know, 
that's not all the levies in the city, but it's portions that 
just--all it does is extend our time--readiness time to build, 
and we'd have to rebuild them.
    The Chairman. Let me just go to this point too, because, 
you know, I've spent--had many conversations with FEMA on this 
subject and their answer is, ``Look, we're not in the dike 
building business. The dikes that we build are temporary 
structures, and those dikes cannot be relied on to work long-
term. They are short-term answers. And so, we don't want to 
give a community a false sense of security by all of a sudden 
turning temporary structures into permanent flood works.'' But, 
that's really not what the Mayor is asking for here. We're not 
asking to turn something that was put up in an emergency into a 
permanent structure. We are asking to be able to retain these 
levies, to retain these dikes, for an indeterminate period 
because we're in a wet cycle. Every bit of evidence we have 
tells us we're in a wet cycle and that it is continuing, 
including the forecast for this next year. So, it doesn't make 
any sense, to us, to take down these, even, temporary levies, 
which we might then, come spring, and in all probability will, 
have to turn around and put right back. That doesn't make any 
sense from a Lisbon perspective, doesn't make any sense from a 
North Dakota perspective, doesn't make any sense from a Federal 
taxpayer perspective. So, that's the second issue, here, that 
we're dealing with.
    Mr. Cole. I kind of got lost here. But any--well, we are in 
the process--and thanks to the State Water Commission, and to 
the Governor, that we've do a feasibility study. We're in the 
process of doing some core sampling, looking at the riverbanks 
to--and trying to lay out some--a permanent levee system that--
maybe that we can afford to put up. And then it becomes an 
issue too, that I don't know--I don't think we're looking at 
trying to put up a system that's going to get us out of the 
floodplain, or out of the flood. You know, we're--we've put 
up--we can put up with the flood insurances and the floodplain 
and whatnot, but we're just asking for some protection. And I 
don't think that I can put it any other way.
    And, I guess--and that's the end of my presentation.
    [The prepared statement of Mr. Cole follows:]

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    The Chairman. It's very good. Appreciate your testimony and 
appreciate your hard work. Appreciate your leadership in 
dealing with these issues.
    Next, we'll go to the mayor of Fort Ransom. And Fort Ransom 
has been right in the crosshairs too. And it was pretty intense 
there in 2009. Welcome, Mayor. Thank you so much for being 
here.

 OPENING STATEMENT OF MR. JAMES THERNES, MAYOR OF THE CITY OF 
                             RANSOM

    Mr. Thernes. Thank you. I want to thank you for the 
opportunity to speak with you today regarding the Devils Lake 
Flooding Disaster and the downstream impacts to the city of 
Fort Ransom and the surrounding area, how they can be 
addressed.
    I attended your Senate Budget Committee hearing on July 
9th, and the U.S. Army Corps of Engineer technical input 
session on July 19th. I have read numerous testimonies, 
letters, and various handouts, presented at the various 
hearings and the Corps of Engineer input session. There's been 
an incredible amount of numbers, facts, figures, maps, photos 
presented at these meetings outlining the pros and cons of 
various ways to address the Devils Lake problem.
    After reviewing all that information, I've come to the 
conclusion that there are no simple solutions that will 
mitigate the devastating flooding of Devils Lake and have the 
approval of all of the affected communities, both upstream and 
downstream. I sympathize with you on that.
    It is quite apparent that the communities of Devils Lake 
are in need to have the lake's water level lowered. To 
accomplish this, the Devils Lake communities have recommended 
discharging water, not only from the lake's current west-end 
State outlet, but allowing discharges from the east end of the 
lake as well, to augment the west end discharges. Some 
downstream communities are opposing this idea, of the 
possible--because of the possible negative effects that higher 
sulfate levels will have on water quality and life in the 
river, and because of the effects the additional discharging, 
from the east end, will have on the river--riverbank erosion.
    The downstream community's recommendations are to enhance 
the outlet at the west end of the lake, armoring of the Tolna 
Coulee, at the east end of lake, to prevent a natural 
uncontrolled release, and the utilization of Upper Basin 
wetlands for added retention. We concur with those 
recommendations.
    With regards to water quality, we feel that any improvement 
would be appreciated, even though we do not get our potable 
water from the Sheyenne River. Indeed, by the time the river 
water gets to our city it is so degraded and polluted with 
pesticides, herbicides, nitrates, phosphorus, and suspended 
silt, from farming runoff and riverbank erosion, that many of 
the local residents choose not to eat the fish they catch from 
it. Therefore we do not support--therefore we support any 
practical and beneficial measures that could be taken upstream 
to improve the river's quality overall, and enhance its aquatic 
life. We, therefore, request the approval of the most cost-
effective flood relief option that acknowledges downstream 
impacts and encompasses a way to move better quality water out 
of the west end of the lake. This request is also supported by 
the North Dakota Department of Health.
    With regards to allowing additional discharges from the 
east end of the lake, we are uncomfortable with that idea, 
because the increased flows--with increased flows comes the 
serious problem of increased riverbank erosion. Even under low-
flow conditions, we have experienced the loss of up to about 35 
feet of rear yard, at 9 homes, and at downstream portion of the 
city, because of the extensive riverbank erosion.
    With the collapse of the river's embankments, there now is 
a danger that the residential septic tanks and, eventually, the 
homes themselves and the street they front on will soon 
collapse into the river. Further, there is a potential that 
access to a large portion of the city's residential area, and 
the entire business district could be severed, if the river 
were to erode the bridge embankments--abutments at the Walter--
--
    The Chairman. Hjelle.
    Mr. Thernes. --``Gile''--``Jelle''----
    The Chairman. Hjelle.
    Mr. Thernes. --Hjelle Parkway Bridge, which is the main----
    The Chairman. That's those Scandinavian names.
    Mr. Thernes. Yeah. Gets me every time.
    [Laughter.]
    Mr. Thernes [continuing]. Which is a year-round--you know, 
our main year-round route into the city. Additional water 
coming down from Devils Lake will expedite that--this erosion 
in our--of our riverbanks, and ultimately will have significant 
impact to our citizens and our economic stability.
    We are currently working with the Natural Resource 
Conservation Service on a stream bank restoration and 
stabilization project which will help protect our city. The 
NRCS goal was to implement and construct the project this year. 
Unfortunately the project is being delayed because of the U.S. 
Army Corps of Engineer permit process, and we have been told 
that Federal funding for the project could be lost if the 
project is not moving forward. We respectfully request your 
support in this vital and important project, and ask that you 
take all steps necessary to ensure that we do not lose our 
funding while it is going through the lengthy U.S. Army Corps 
of Engineer permitting process.
    The city of Fort Ransom is not unique in its riverbank 
erosion problem. Erosion is occurring in all the communities 
and farmsteads along the entire length of the Sheyenne River. 
With our stream bank restoration and stabilization project in 
place, we believe we could temporarily accept controlled 
outflow rates of 250 to 500 cubic feet per second, during times 
of nonflooding, in an effort to reduce the potential risk of a 
natural and uncontrolled release from the Tolna Coulee. However 
higher rates extend--over an extended period of time will, in 
all likelihood, cause damages to property and infrastructure in 
our city as well as along the entire length of the Sheyenne. 
Therefore we are--therefore we ask that you keep the potential 
problems that additional discharges and higher rates of outflow 
will create for the downstream's communities in the forefront 
of any decisions made.
    We, in Fort Ransom, foresee the solving of the Devils Lake 
flooding issue as not one step, but a two-step process. The 
first step is finding out what can be done immediately to keep 
the water level in the lake from rising any higher, thereby 
halting the increase in flooding to the lake's communities, and 
lessening the chances of an uncontrolled release from the 
lake's east end at Tolna Coulee.
    The second step, which could begin simultaneously with the 
first step, is to come up with and economically feasible and 
cost-effective long-term solution that would substantially 
lower the lake's water level, and also control the water level 
in the future during high rainfall events and excessive 
seasonal wet spells.
    Completing steps--step two allows the Devils Lake 
communities to recover their loss of property and benefit 
economically. Up to this point, all we've--after this point in 
time, all we have heard is discussions on the pros and cons of 
the first step. We have not heard any mention of meaning--or 
meaningful discussions on long-term solutions, which would 
substantially lower the water level of the lake and then 
maintain it at a controlled level. It appears that we have 
locked into the idea that discharging the lake's water into the 
Sheyenne will somehow solve both the immediate and the long-
term problem; however, we know that that is not the case, 
because of the impacts downstream to the communities will 
endure with a long-term discharge.
    I've had a number of discussions with local residents, and 
asked them what they thought could possibly could be done with 
the long-term to solve the Devils Lake flooding issue. I've 
been pleasantly surprised at the number of possible ideas that 
have been expressed. I learned a long time ago, that non-
experts can sometimes come up with ideas that are outside of 
the box, and lead to a real solution of the problem. A few of 
the possible long-term solutions that residents presented are 
listed below.
    Possible solution No. 1: Why can't the existing McClusky 
Canal system be reengineered and constructed to take water from 
the Devils Lake to the Missouri River? In 1996, proposals 
called for $800 million worth of water projects related to the 
canal system, including stabilization of Devils Lake. They ask, 
Whatever happened with these projects?
    Possible solution No. 2--which you just alluded to--Why not 
build a pipeline to carry water from Devils Lake to the western 
North Dakota oilfields to use in filling wells after the oil 
has been extracted. Currently the oil companies are trucking 
water to the oil wells at a great expense. Given the 
opportunity, they possibly could cost-share, or would cost-
share, with Federal and State governments in the development of 
such a pipeline.
    Possible scenario No. 3--or, solution No. 3: Why not build 
an earthen dam and create a retention basin downstream from the 
Tolna Coulee? This would provide additional protection for the 
downstream communities, should the Tolna Coulee fail.
    Possible solution No. 4: Why not build a canal or pipeline 
system to carry water from the Devils Lake directly to the Red 
River, above Fargo? Considering the billions of dollars that it 
will cost in damage----
    The Chairman. Can I just interrupt you there and say----
    Mr. Thernes. Sure.
    The Chairman [continuing]. Every one of those proposals has 
been considered----
    Mr. Thernes. Has it?
    The Chairman [continuing]. Is being studied. So, I know 
that it's not necessarily in the public--it doesn't get public 
attention. I have spent hours and hours and hours, as Joe 
Belford has, in meetings, in which every one of those has been 
discussed, evaluated, cost estimates made. And what you find, 
and I--without going through the detail of each one, is you're 
dealing with two big problems. Cost: the cost of many of these 
options are in the billions of dollars. Billions. No. 2--and 
all of this has to have a State and local share, so it's not 
just going to Washington and ask them for Federal money, we got 
to come up with a State and local share as well. So, many of 
these things become cost prohibitive.
    Second major issue is the original plan to hook up the 
McClusky Canal, bring water into Devils Lake from the Missouri. 
When we passed the Dakota Water Resources Act, which provided 
$400 million of authority to North Dakota for municipal and 
residential projects in North Dakota--for example southwest 
pipeline, northwest pipeline, other water projects across North 
Dakota, funding for the tribe's water improvement projects--
$200 million authorized to move water from the western part of 
our State to the eastern part of the State. It was specifically 
precluded--specifically precluded--to connect up the McClusky 
Canal and Devils Lake. So, you know?
    Mr. Thernes. Uh-huh.
    The Chairman. These are good thoughts and it's not as 
though people haven't thought about every kind of option 
imaginable. It's just, when you start pulling the thread on 
these things and you bring back the curtain, what you find is 
often not something that looks as attractive as it does at 
first blush.
    Mr. Thernes. Well, I think, you know, that the residents 
are, you know, of my city at least, it would--hearing this, 
would be happy. I mean, everybody's been saying, ``Well, what--
why haven't we heard anything about these kinds of projects?''
    The Chairman. The oil thing is still under review. The 
movement of water--I can tell you, their initial impression is, 
again, cost prohibitive, but still being analyzed, and they've 
not done a final analysis. So, you know, there's still----
    Mr. Thernes. Could the oil companies contribute to a cost-
share with this?
    The Chairman. Absolutely. And, I mean, that's----
    Mr. Thernes. I mean, it's costing them big bucks, right 
now, to----
    The Chairman. It's costing them a lot of money----
    Mr. Thernes [continuing]. Truck it in.
    The Chairman. --1,000 truckloads, on average, to a well--
1,000 truckloads.
    Mr. Thernes. How many miles do they have to go, I wonder, 
too.
    The Chairman. Yeah. Well, they're--you know, it depends, of 
course, on the location of the well, and where the water site 
is, but we're talking about huge issues, as the Governor well 
knows. Yeah.
    Mr. Thernes. OK. And then, I guess in summary we 
respectfully request that you ensure that any approval of a 
flood-relief option acknowledges downstream impacts and 
includes a way to discharge better quality water out of the 
lake; take all necessary steps to ensure that the city of Fort 
Ransom does not lose its funding while going through the Army 
Corps of Engineers permitting process for its stream bank 
restoration and stabilization project; keep the potential 
problem of the additional discharge and the higher rates of 
outfall from the east end of the lake--that the outfall east 
end of the lake will create for the downstream communities at 
the forefront of any decisions made; and ensure that all 
possible ideas and alternatives are studied and investigated 
before arriving at a solution addressing the Devils Lake 
flooding disaster.
    Thank you for the work that you have done for us, in trying 
to solve the Devils Lake issue. We appreciate your 
understanding of the challenges which are still ahead of us. 
And we hope all communities can work together to bring about 
comprehensive, cost effective, and economically feasible 
projects.
    [The prepared statement of Mr. Thernes follows:]

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    The Chairman. Thank you very much for your testimony. I 
would say, I've always thought Fort Ransom was one of the 
jewels of our State. As just a--I love going to Fort Ransom, a 
spectacular spot.
    We'll go to the next panel now.
    Thank you. Thanks to each of the----
    Mr. Thernes. You're welcome.
    The Chairman [continuing]. Witnesses. We appreciate very 
much.
    Our next panel is Neil Olerud, Teresa Rotenberger, and 
former Lisbon Mayor Morrie Saxerud. Neil Olerud is chairman of 
the Ransom County Commission. Teresa Rotenberger, emergency 
manager for Ransom County. And, of course, we all know, Morrie 
Saxerud is the former mayor here.
    Welcome.ahead and we'll just go right down the panel. And 
then, we'll have a chance for questions, and then any 
additional observations the Governor would have, before we 
reach conclusion.
    Mr. Olerud. OK.
    The Chairman. Welcome.

    STATEMENT OF HON. NEIL OLERUD, CHAIRMAN, RANSOM COUNTY 
                           COMMISSION

    Mr. Olerud. Thank you. I guess I'm not very prepared. I 
don't have notes or anything. I left that up to Teresa.
    [Laughter.]
    The Chairman. That's fine.
    Mr. Olerud. So----
    The Chairman. Just give us your observations.
    Mr. Olerud. She's prepared.
    The Chairman. What----
    Mr. Olerud. Yeah.
    The Chairman. What do you think?
    Mr. Olerud. We kind of talked about, at our meeting this 
morning, thinking--we would like to see another outlet for the 
water, rather than the Sheyenne itself. You know, divvy it up, 
put some in the James River, McClusky Canal. Another thing we 
discussed is putting up a permanent dam in the Tolna Coulee 
area, something more stable. It's a very unstable outlet right 
now, full of sand, and it starts to go, I'm afraid we're in big 
trouble. And, I guess another thing we had talked about is 
looking, in the future for water, when things start drying up. 
And that cycle will happen. So, that's just some of the studies 
that we would like to see implemented and some money put in.
    The Chairman. OK. Let me just say, if I can, that, when 
Dakota Water Resources Act was approved, which provides $400 
million of authority to North Dakota for water projects, much 
of these--many of these alternatives were evaluated at the 
time. Because, remember the old plan was for the McClusky Canal 
to carry water to Devils Lake, and then we would continue to 
move water over into eastern North Dakota, through a series of 
canals--open-air canals.
    As part of the Dakota Water Resources Act, 200 million was 
reserved--we were given authority for 200 million--to move 
water from western North Dakota to eastern North Dakota. And, 
one of the options still is to connect up the McClusky works 
with a conveyance system to get water to eastern North Dakota, 
because we know, at some time in the future, that's going to be 
needed, just as you say. This wet cycle's not going to last 
forever. And, for North Dakota's economic development--long-
term economic development potential, we need to move water from 
the western part of the State to the eastern.
    But, we could not get agreement to pass the Dakota Water 
Resources Act if the water was going to have an inlet to Devils 
Lake. We couldn't get an outlet approved if there was going to 
be an inlet. And this has to do with the politics of the 
downstream States, especially the State of Missouri, who thinks 
they have a special interest in this matter. If you study a 
map, it's a little hard to understand how they have anything of 
interest to do with what happens to Devils Lake water, because 
Devils Lake water never goes to the State of Missouri. But, at 
least some people in Missouri, apparently, have a hard time 
understanding that, and think that somehow if we have water 
coming out of Devils Lake, that's somehow going to affect them. 
Doesn't have anything to do with them, as anybody who knows 
North Dakota geography understands. So, that's part of the 
issue. So, we lost the ability to have water go into Devils 
Lake, in order to preserve the ability to get water moved to 
eastern North Dakota, and to have the possibility of an outlet. 
Because, at that time, the No. 1 priority was, clearly, not 
getting more water into Devils Lake, it was to get water out of 
Devils Lake.
    So, it's very important. And this was a decision, not just 
of Senator Dorgan, myself, Congressman Pomeroy, but our 
Governor, at the time, Governor Schafer, and State leadership, 
the leaders of the legislature. Everybody was in on this 
decision, because we felt it was so important to get the Dakota 
Water Resources Act approved, because of the resources it made 
available to North Dakota for water development. So, that's the 
circumstance that we face with the question of the McClusky 
Canal.
    Mr. Olerud. OK. I guess that has--all I've got to say.
    The Chairman. Alright.
    Teresa, welcome.

  STATEMENT OF TERESA ROTENBERGER, EMERGENCY MANAGER, RANSOM 
                             COUNTY

    Ms. Rotenberger. Thank you. First of all, Senator Conrad 
and Governor Hoeven, thank you for coming to Ransom County to 
listen to our concerns. With the continuous wet-weather 
conditions that have impacted our county and the Devils Lake 
Basin, and the word ``flooding'' being spoken daily, the people 
are still recovering from the record flooding of 2009 and 2010, 
and they're calling my office asking for answers for their 
concerns over the abundance of water in Devils Lake.
    And, as I said before, I appreciate you coming to Ransom 
County so that I can express some of their concerns.
    I've been the emergency manager for 10 years. I've worked 
with disaster planning and recovery. One of our--one of the 
requirements, as an emergency manager, is to work on the multi-
hazard mitigation plan. And, with that, you cover all of the 
natural and manmade hazards that can happen in the county. 
You--we have to document where each hazard--you know, what each 
hazard is, where it can occur, and how you're going to mitigate 
the damages for improving the response. It's kind of like 
trying to look into a crystal ball and figure out what could 
happen.
    As I listen to the news headlines continuing to address the 
rising waters in Devils Lake and into the Sheyenne River, I--
it's time to ask for help and guidance in planning for the 
possibility of an outflow. I mean, I really hope that all the 
control things can work that we're trying for. But, just in 
case, it's my job, as an emergency manager, is to be--is to 
plan and prepare. And, I guess, throughout my documentation, 
and I won't read all of it, that is my main goal. Is, just, I 
need--we need more information.
    If an outbreak would occur it would affect, not just Ransom 
County, the 111 miles, within Ransom County, which would split 
our county in half, Barnes County, you know, and all along the 
river. Resources and assets, to come to a response for that, 
need to be coordinated. It goes far beyond what we, locally, 
have and we need to do our planning together with State and 
Federal agencies to know how we could react.
    So, you know, if it--we need to know so many different 
things, that--you know, we talked about the cfs; how high would 
dikes have to be. We talked a little bit about duration; just 
more information--we need more technical guidance and we need 
some funding to help with planning.
    The Chairman. OK. You make very good points.
    I think, you know, we have what's been called the ``Tiger 
Report,'' that the Corps of Engineers Produced, in an earlier 
evaluation. Very controversial, I must say, that report. But, 
it paints a scenario--if there was an uncontrolled release, out 
of the east end, and if there were erosion down to 1450--that 
is, if you had a blowout occur there--it's really very serious. 
We've had a description here of what would happen at Valley 
City. And we would be 5 feet above, not flood stage, but 5 feet 
above the flood that occurred in 2009. That's a worst case 
scenario. And it would continue for a prolonged period. That's 
the--you know, not only is it a very high wall of water coming 
at us, but it goes on for an extended period of time. That, 
obviously, would affect this community dramatically, as well.
    Now, what's the probability of something like that 
occurring? I think, all the scientific assessment that has been 
made and provided to us, is that that has a very low level of 
probability. Right now, the lake is at roughly 1452, just under 
that, isn't it Joe?
    Mr. Belford. Yeah.
    The Chairman. 1451.9? Something like that?
    Mr. Belford. 51.7----
    The Chairman. 51.779, I think I was told last. So, you can 
see, at that level, you know, you wouldn't have much coming our 
way. It's when you get up to 1458----
    Ms. Rotenberger. Fifty-eight.
    The Chairman [continuing]. Where you have the natural 
outflow that you'd have the pressure build in a way that the 
danger of an uncontrolled release rises. Nobody knows for 
certain. They say the State Water Commission and Governor may 
want to comment on this, after we go to our next witness, that 
they are doing sampling. They have tests being done constantly 
to monitor that, to make sure that we're not in danger of an 
immediate blowout.
    Ms. Rotenberger. And, I guess, visiting with General 
Sprynczynatyk, it was after the flood in 2009, we're down in 
the park in Lisbon, and he talked about, in past history, that 
Devils Lake has overflowed six times. And I'm hoping it's far 
out of our--you know, my--our lifetime, but it can happen. It's 
just----
    The Chairman. Yeah.
    Ms. Rotenberger [continuing]. It is good to----
    The Chairman. No. I----
    Ms. Rotenberger [continuing]. Be prepared.
    The Chairman [continuing]. Tell you, well, you know, we 
know, in 4,000 years of history, the scientists tell us at 
least twice, maybe more, but at least twice, it's gone over. 
So, I mean, I tell you, we've dealt with Federal officials all 
these years, who want to believe it's not going to happen. That 
this lake is going to quit rising. Well, you know, it hasn't 
happened. It does keep rising. And so, you are absolutely 
right, and, I think, all the rest of us are right, to try to 
come up with options to pursue to reduce the risk--none of us 
can eliminate the risk, we're not God. We don't--we're--you 
know, Mother Nature, far more powerful than anything we've got 
to put on this. So, I think, that, you know, a certain amount 
humility is required here too. But, we can do things to reduce 
the risk--reduce the risk--and that's what this effort is 
focused on.
    The Chairman. Morrie? Mr. Saxerud, former Mayor, welcome.

 STATEMENT OF HON. MORRIE SAXERUD, FORMER MAYOR, CITY OF LISBON

    Mr. Saxerud. Thank you, Senator Conrad and Governor Hoeven, 
for coming to Lisbon.
    My personal opinion is, that the State and the Federal 
response should be one of two things: either we should start 
immediately to discharge enough water from Devils Lake Basin to 
ensure there will not be an uncontrolled spill, or start now, 
to protect the downstream cities with adequate levies to 
sustain the predicted uncontrolled flow of a period of time--
for the period of time it will be spilling, which, from what I 
read in the newspapers, could be up to 90 days. And I don't 
know of too many earthen dikes that'll take that without a 
contractor sitting right on top of them, taking care of the 
breaches in them.
    Attached is an email and charts showing the flow 
information and the flow charts from Mark Coring, PE, MBP 
emergency manager with the Army Corps of Engineers. He sent me 
this information in response to my questioning--asking, What 
would be needed for a levee that would handle 12,000 cfs? The 
lines on this--the black line on the chart shows the proposed 
dike for the 2010 flood event. It was at 27.5 feet and provides 
2 feet of freeboard, at a 9,000 cfs flow. There were some 
levees put in at this height, in 2010, but the height of the 
dikes were stepped down as the forecast changed and went down.
    The 12,000 cfs event, a figure picked out of the newspaper, 
that would require a dike of 30.5 feet, where the levee system 
starts and the rivers enters the city of Lisbon, at Oak Ridge 
Drive. Oak Ridge Drive is used as a reference line only, to 
align with the levee that is below the hill in the park. It 
does not mean we would need a levee at the top of the hill on 
Oak Ridge Drive.
    The step-down reflects the drop in elevation, as the river 
flows through the city, and also reflects a lower dike 
requirement, as the city clears the bridges and moves faster as 
it exits the city.
    My understanding is, there is talk of removing the levees 
again. We know there is concern, by FEMA, that too much 
confidence is put into the nonpermanent dikes that are not 
build to spec, and they could fail. This is a legitimate 
concern. But, until permanent levees are built, a nonpermanent 
levee system, built under controlled conditions, not on frost, 
snow, or water lapping at the top, would have a better--would 
be better than a hastily built dike in response to a spill out 
of Devils Lake.
    There are people that are thinking of selling their homes 
and leaving the city to protect their investment. The city 
needs to quell these--those fears by putting an emergency plan 
in place that addresses the spill. The cities along the 
Sheyenne River need an affirmative action from the State of 
North Dakota and the Federal Government to remove the 
``uncontrolled'' from the uncontrolled spill. I believe a 
control structure on Stump Lake is the most logical. And the 
sooner it is put in place, the lower the discharge requirement. 
If the level of Devils Lake cannot be lowered to prevent an 
uncontrolled spill, then permanent levees need to be put in 
place.
    [The prepared statement of Mr. Saxerud follows:]

    [GRAPHIC] [TIFF OMITTED] T8154.420
    

    The Chairman. OK. Very good testimony and very clear, we 
appreciate that.
    Governor, you've been very patient. I'd like to turn to 
you, for any additional observations that you'd have, at this 
point.
    Governor Hoeven: Thanks, Senator, a couple of comments.
    One, I want to echo, what Senator Conrad said, and that is, 
you know, we're looking at all options. But just, again, some 
of the realities. For example, taking the water out to the 
oilfields or even moving water from Devils Lake to the Missouri 
River, in addition to the Dakota Water Resources Act, which you 
mentioned.
    Lake elevation, on Devils Lake, is about 1452 feet, 
roughly--a little bit under. We're working to get that down 
some more. Lake elevation at Sakakawea, now, is about 1840. So, 
if you do the math, that's 400 feet higher. So, No. 1, every 
single gallon you'd have to pump 400 feet higher, uphill. OK? 
400 feet. In addition, you've got to move it several hundred 
miles, or 150 miles. OK? Every single gallon. So, you can 
imagine the cost. And, if you're going to get it out to the 
oilfields, now you've got to move it another hundred miles. OK? 
So, understand, when you talk about these different options, 
the incredible costs that you get into. And, sometimes somebody 
will say, ``Well, yeah, but, you know, I know of a project, in 
another place, where they're doing something.'' In some cases 
that's true, and in some cases they have millions of people 
that are sharing the cost of that project.
    For example, if we were to try to desalinate the water on 
the east end, and then use a gravity flow, which Todd talked 
about a little bit--we've looked at that extensively--but 
you're talking about building a water treatment plant, probably 
bigger than is used for a city the size of Tampa, Florida or 
San Diego. And then, trying to desalinate the water, so you're 
talking, you know, hundreds of millions--or, as Senator Conrad 
said, you know, potentially billions of dollars, in essence, 
then, to put water back in the river that has almost the same 
sulfate content as the water you took out. For example, right 
now, the water out of the west side of Devils Lake is 5---it's 
coming down--it's down to 550 parts per million, in sulfates. 
550 parts per million, OK? And that's down from what it was 
when we were pumping earlier.
    So, when we talk about the difference between 450 parts per 
million, or maybe 750 parts per million, remember you're 
talking the difference between 450 or 750 parts per million. 
So, go start stacking--you know, maybe stack a few pennies 
here, and then stack millions over here, and you realize you're 
talking relatively small differences, but phenomenally huge 
costs to try to completely desalinate it, if you're talking 
about the volumes of water we're talking about. So, at moving 
250 cubic feet a second--and if you don't think that's a lot of 
water, go take a look. It's a lot of water. This is a big, big 
lake. But, that's why we're bringing funds to Valley City; it 
looks like we'll probably end up bringing funds to Fargo and to 
West Fargo, to treat the water there, to take the sulfates down 
to some very low level.
    Now, the EPA doesn't have a standard that you're required 
to treat it, but for taste and aesthetics we--you know, we're 
coming to the communities and saying, we'll work with you to do 
that. It's important we keep that moving fast, because we need 
to move water out, OK? But those are just some of the economic 
cost, and practical, realities to these different options.
    And so, again, that's just to piggyback on something the 
senator went through very well. But, people do have questions 
about these things, and we want to make sure that we're 
communicating on these things. The Corps of Engineers is going 
through all of these options. I mean, they've--I think, they've 
got more than 20 options that they're going to look at. But, 
we've been working on this for while, and we have a lot of 
engineers that have been working on this for a long time. So, 
those are the practical realities that we absolutely have to 
deal with.
    As far as the Tolna Coulee, we do have monitoring wells 
there. And, if you have questions--to monitor that, to make 
sure we're watching it, so that we don't have a uncontrolled 
flow, and that we're----
    The Chairman. So we're not surprised.
    Governor Hoeven: Yeah. So, we have a early warning system.
    The Chairman. Yeah.
    Governor Hoeven: So we're not surprised. And so, they have 
monitoring wells. Todd can talk about that some more, if you 
want. Doesn't mean we shouldn't plan, of course. We need to 
continue our planning efforts.
    And, Teresa, you're great at that. You know, we've been 
through a lot of flooding, and your work is wonderful and much 
appreciated.
    So, that's absolutely appropriate, but we do have 
monitoring wells up there.
    But, the other thing is, what we're looking for, from the 
task force, in addition to going through these options, is we 
need to move more water out. And so, they're going through the 
options on the west side and the east side. We need to do it in 
a way where we manage the sulfate levels, as we've gone through 
here at great length, and we will do. We also need their help 
on a control structure on the east side, so that you would 
protect an uncontrolled flow, OK?
    And we want FEMA's help, as we've talked about, with how we 
protect downstream on the flooding, as Morrie's talking about. 
Again, you know, take out homes under the hazard mitigation 
program, and then to not being able to put in--a dike in there 
makes no sense in communities like Lisbon. We need help to get 
these approvals, whether it's the Corps, the EPA, or the FEMA, 
this task force needs to give us some of these authorities so 
we can do these things that make sense. And that's what we're 
looking for, on September 7, and, you know, that's why your 
input is extremely important, but that's why it's so important 
to communicate with everybody upstream, in Devils Lake, and 
downstream, that this is a shared task. That means we all have 
to give a little to make it work, but that we can make it work. 
And that's, of course, what we're shooting for.
    So, those were the main comments I had. And, again, I want 
to echo, Senator, I know you're appreciation, not only to the 
panelists, but to everyone else that's come, and for all the 
hard work and the consideration that you're putting into this 
effort as well.
    The Chairman. I--Frank, thank you, Governor, again, for 
those comments.
    And, I think for the purposes of the record, it would be 
important that we ask Todd to come back to the stand. Maybe he 
could just use the microphone there at the Governor. If you'd 
just draw a chair up, Todd. If you could tell us, for the 
record, about the monitoring wells that are in place, so that 
we get an early warning system that would let us know if there 
is water filtration through the Tolna Coulee.
    Mr. Cole. Can I ask one question Mr. Senator?
    The Chairman. Let me--Ross, if I can, let me go to him, for 
the purpose of the record, then we will----
    Mr. Sando. OK. For the record, we do have observation wells 
in Tolna Coulee, right where it would flow out from Stump Lake. 
And, right now, the wells--we're--what we're looking for is to 
see if there's a gradient forming, so to see if water starts 
migrating through the Tolna Coulee. And the big concern is, 
like you said, if we have blowout at a lower elevation, it's 
not necessarily that water's going to start flowing when it 
gets up to 1458, it could start migrating underground. So we 
have wells--a whole network of observation wells in place--to 
watch the water level underground to see if there is a gradient 
forming. And to see if there is, actually, Devils--you know, 
Stump Lake water moving through Tolna Coulee.
    The Chairman. And isn't it the case that, at this moment, 
that we see no water migration?
    Mr. Sando. At this--at the--currently, there is no 
migration of water from Stump Lake into Tolna Coulee. It's just 
all ground water from the area that's in the observation wells.
    The Chairman. Yeah. OK.
    Mayor?
    Mr. Cole. My question is, you know, we talked about this 
September 7th deadline for some answers, is that something we 
can count on? I mean, one of these days FEMA's going to come to 
us and----
    The Chairman. Yeah.
    Mr. Cole [continuing]. They're going to be ready to buy out 
these homes.
    The Chairman. Here is the best way I can put it to you. The 
actual deadline is September 9th. That is 60 days after the 
commitment was made. We--the community asked for decisions to 
be made within a timeframe. I think, they'd asked for 30 days. 
They said they couldn't do it within 30. They actually asked 
90. We negotiated. They agreed to produce the options in 60 
days. That deadline is September 9th. They have moved that up a 
bit and said that their intention is they're on track to 
produce a report by September 7th.
    Let me indicate that we have been working on a meeting, in 
Washington, with the working group, by the State officials and 
the local officials that have responsibilities for these areas. 
We have been trying to get everybody's schedule together. It's 
a bit of a challenge. And, the best date we could come up with, 
to get everybody's schedule together, was September 3rd. They 
have told us, ``Look, if the meeting is September 3rd, that 
might push the September 7th report, for the September 9th 
deadline, several weeks later.'' So, we have had to consult 
everybody and say, ``Look, is--would we rather have a 
conference call, as a way of giving, you know, additional 
input; or do we think it's so important to have a face-to-face 
meeting, that we would potentially delay the report for several 
weeks?'' The overwhelming feedback we've gotten is people think 
it is far more important to have face-to-face meeting, on these 
very difficult issues, even if it means a several-week delay.
    So, that's where we are. They have said to us, all along, 
they are committed to the September 9th deadline, but, look, 
we've made requests. We've made requests that they come out 
here, which they have answered. As you know, they've had teams 
out here, in the communities, upstream and downstream. And, we 
have made requests that we have an additional chance for the 
Devils Lake leadership, for the State leadership, for this 
community's leadership, to come to Washington and get an 
initial review of what their options are, and what their 
preferred option might be, before they finalize it. So, I just 
want to be very, very clear that that may mean this date slips 
a little bit. But, certainly in September.
    I think it is--let me just say, by way of conclusion, my 
own view of all this, after all of these hearings, after all 
these meetings, 17 years of paying attention to these issues, 
we are all in this together. This is not Devils Lake Basin 
versus downstream. The risk to all of us--all of us--is an 
unacceptable risk. None of us could live with a prospect of 
having 10- to 12,000 cfs for 30 days, going through these 
communities. None of us can afford the risk of a water quality, 
out of the east end, undiluted, five times worse than the water 
quality of the west end.
    I mean, I know that they don't say there's a specific level 
of health risk that's been established for sulfates, but I tell 
you, as I've examined what happens--hey, when it gets to a 
certain level, and peoples systems aren't used to it, they get 
diarrhea, that's what happens. And, you know, this is not 
something that we can take lightly. You've got people getting 
dehydrated; you got people getting sick at these high levels of 
concentration. So, this is serious business.
    And, can you imagine, I mean, Valley City cannot handle a 
flood stage 5 feet above 2009 for an extended period of time, 
nor can Fort Ransom, nor can Lisbon. We'd have to be--we'd be 
talking about potential evacuation of these towns, and maybe 
for an extended period of time. So, you know, we don't take 
this lightly. This is serious business. And, all of you take it 
seriously because you've been on the front-end of the fight. 
And you know how painful it has been to win these flood fights. 
Can you imagine what would happen if we would lose? I've been 
through that before, in Grand Forks, North Dakota, in 1997, 
where we lost a flood fight. And it was a disaster. People's 
lives were sometimes altered irrevocably.
    So, we've got a heavy responsibility here--a very heavy 
responsibility. And we've got an obligation to look at all 
options and to use our level best judgment on what has the best 
prospect of working for everybody, downstream, upstream, and in 
between. And, that's why we're doing these hearings, that's why 
we're doing these listening sessions, that's why we have tasked 
the Corps with examining all options. And we told them, ``We 
don't want just to revisit, we don't want you to go out and 
dust off the old studies. That's not good enough. We need you 
to think outside the box. To look at every kind of option.'' 
And that's what's going to presented to us, now, in September.
    With that, I want to give a chance for people, who are 
here, to--because this is a hearing, we have a format that is 
approved and accepted, which is, we can take statements. If 
somebody has a written statement, we're happy to include that 
in the record. If somebody would just like to stand and be 
recognized, and give their point of view, for the record, we're 
happy to do that.
    Yes, sir. And if you'd----
    Voice: Thank you, Senator. I'm----
    The Chairman. If you'd just stand and give your name----
    Voice: OK. So----
    The Chairman [continuing]. And the community that you're 
from.
    Voice:--I'm a commissioner here in Ransom County.
    The Chairman. OK.
    Voice: I appreciate you guys being here--I really 
appreciate you guys being here, and we have gone through Valley 
City and Lisbon and Fort Ransom.
    The Chairman. You can----
    Voice: And I would like--I think, maybe something that 
should be studied as well--and you Governor too--what the 
economic impact a breakout would have on all the bridges up and 
down the Sheyenne Valley. Another 5 feet and I don't think we'd 
have many bridges left in the Sheyenne Valley. Not to mention 
the rural--farms and ranches, up and down that Sheyenne Valley. 
Now, if that can be considered--I hope it is considered, as 
well, when we're trying to make a decision, ``Is it worth it to 
do this or that''----
    The Chairman. Yeah.
    Voice:--``or the other thing.''
    The Chairman. It absolutely is. In the----
    Voice: Thank you.
    The Chairman. You're very good to raise the point, because 
it's a very important point. It's one that the Corps has 
assured us is part of the calculation. We have asked them to 
examine all impacts--all economic impacts of the various 
scenarios that we could confront. And so, when we talk about 
``all impacts,'' we're talking to landowners; we're talking 
farmers, ranchers, communities, counties, State; we're talking 
private sector; we're talking a comprehensive look. Now, this 
is not easy to do. You know, I must say, it's easy to say. It's 
very hard to do and do it with credibility. But, that's the 
task they've been given.
    Yes, sir.
    If you'd stand--anybody, that wants to give additional 
testimony, if you'd stand, give your name and your location, 
where you're from.
    Mr. Schultz. Yes, my name is Virgil Schultz, and I live 
along the Sheyenne River.
    I think you do have one option that--you talk about how 
critical this situation is, and that would be to pull the plug 
on the Baldhill Dam and use that a retention area. You know, it 
would----
    The Chairman. OK.
    Mr. Schultz [continuing]. It would basically save us--I 
mean, we lose the fish, but it is an option that you have. 
Lowering the----
    The Chairman. You know----
    Mr. Schultz [continuing]. Instead of having it 80 percent 
recreation and 20 percent flood control----
    The Chairman. Yeah.
    Mr. Schultz [continuing]. Put it 100 percent until the 
crisis passes.
    The Chairman. Flood control.
    Mr. Schultz. Thank you.
    The Chairman. You know, it's a thought that--former 
Governor called me one night at home. And he said, ``You know, 
Kent, during my administration we were dealing with a number of 
flood threats, and we started examining natural retention areas 
that could be enhanced to deal with water.'' And to, you know? 
I mean, we've examined every option. So, we went to the Corps, 
we asked him to talk to the Corps about areas that they had 
examined, that would be natural areas for potential retention, 
that could be enhanced to help reduce what had to be done, in 
terms of releases--what had to be done. And they have promised 
us that that's part of their assessment.
    Governor Hoeven: We added 4 feet--is it 4 feet to Baldhill 
Dam?
    Voice: Five.
    Voice: Five foot.
    Governor Hoeven: Five foot.
    Voice: Five.
    Governor Hoeven: You can imagine what the 2009 flood would 
have been like without that extra 5 foot on the dam. So, we 
have already added to it.
    Mr. Schultz. Why not use it for a retention--drain it and 
use it for a retention----
    Voice: 70,000 acre-feet--I mean, you'd have to expand it 
significantly. I don't know if you could expand it enough. 
Todd, do you know? Could you expand it enough, really, to--
you're talking about so much water, you couldn't hold it--
enough water, but----
    Mr. Sando. 70,000 acre-feet, that's how much is in 
Ashtabula, and that's only 5 inches off of Devils Lake.
    Voice: Yeah. I mean, it's a matter of scale, I think, is 
the challenge. But, again, something that's being looked at, 
but matter of scale, I think, is the issue.
    The Chairman. And not only there, but other retention areas 
as well. Because, you know, you do the math on these things, it 
seems like such an amazing amount of water, doesn't it? 70,000 
acre-feet. But, then when you translate it into what's 
happening in Devils Lake, that is less than one-eighth of the 
inflow--one-eighth of the inflow in 2009, 590,000 acre-feet 
inflow.
    Yes, sir.
    Mr. Jones. Senator----
    The Chairman. If you'd give your name and----
    Mr. Jones. Wayne Jones, Ransom County Commissioner.
    The Chairman. Yes, sir.
    Mr. Jones. Going way outside the box, we pump water up from 
wells, we pump it down, after we take the heat out of it. What 
about--what do we have underground, for underground rivers, et 
cetera for putting some of this water down? Has that been----
    The Chairman. Yeah.
    Mr. Jones [continuing]. Thought of?
    The Chairman. Aquifers. Recharging aquifers. It's an issue 
that is being looked at. As you know, in West Fargo, they draw 
their water from aquifers, those aquifers are being depleted. 
There are lots of complicated issues. I'm not a water engineer, 
but one thing I've learned a lot about, as I listen to a lot of 
water engineers, and when you start recharging aquifers, that's 
got a series of issues attached to it as well. But, that is 
also being looked at.
    Yes, sir.
    Mr. Crowley. John Crowley, Barnes County commissioner. This 
morning, at our meeting, we passed a resolution to request that 
the Army Corps of Engineers, State Water Commission immediately 
start to armor the Tolna Coulee. Now, you have mentioned, 
everybody talks about blowout. If it's armored, there is no 
blowout, period. So, that is the first thing that needs to be 
done. And, I guess, I was the one that suggested pumping water 
all winter, and I'll still stand by that, but I'm not talking 
about a pumping outlet, I'm talking about a gated outlet, with 
a channel that's cut to the Sheyenne River, that would be 
capable of handling 1,000 cfs, so you could really lower the 
lake.
    Now, it was discussed that the water quality is poorer in 
the wintertime. But, if you're going to blend it from the west 
end and East Bay, you've got the same number. So, you might as 
well pump it during the winter and get rid of it.
    The Chairman. You know, I think, John, that, frankly, this 
is something that is being examined. Because, if we could 
operate an outlet more than 7 months a year, that would help. 
We do get into this question of water quality, that the State 
engineer mentioned. But--we got water quality issues no matter 
what we do. But, obviously, they're much less severe out of the 
west side than the east.
    Yes, sir.
    Mr. Bedding. I'm Dick Bedding. I live south of Valley City, 
and I represent People to Save the Sheyenne.
    You've mentioned it, but it gets short shrift, and that 
would be retention. So, Upper Basin retention of water, 
restoration of Upper Basin drained wetlands is where we'd like 
to start. I agree with John about, armor the Coulee first, then 
deal with how to keep water out of Devils Lake, getting there 
in the first place.
    Several of our--I've flown up above the basin several 
times. Several of our members flew, July 4th. There goes my 
notes. We have pictures that we took, like it is, we have 99 
pictures showing that the--a lot of the land in the Upper Basin 
is free of wetlands, free of water. You can see the drains 
going down into the Coulees. And so, there are several hundred 
thousand acres there. I agree it's a terribly difficult job to 
get farmers, now, who are farming that land, to agree to revert 
to wetlands, but if we could do that, I really think that would 
be a good way to go.
    The Chairman. If you'd like to present those, we'd be happy 
to make them part of the record, Richard.
    Mr. Bedding. Sure will.
    The Chairman. I think it'd be good for the record, if we'd 
have them. Yeah.
    Mr. Bedding. OK.
    The Chairman. Let me just say, on this issue, you know, 
I've flown over that area repeatedly. I've seen--you know, I 
think you've--you probably saw, yourself, as you flew over, I 
mean, there is water everywhere. Are there places that are 
drains, in effect? Yes, there are. Could that help, if people 
would agree to reverse their drains? Yes, it would. Here's 
the--we face a legal problem, that we cannot compel people to 
store water on their land. You know, our North Dakota supreme 
court has ruled on that issue. And so, there is nothing we can 
do to compel people to store.
    We did spend a fair amount of money, in the first phases of 
this effort, to use Federal resources to build additional 
storage, in the Upper Basin. I can tell you, those places not 
only have stored tens of thousands acres-feet of water, but all 
of the areas around them have filled up with water. But, it is 
true that there are drains that are in place, and there are 
places that are dry, because of those drains. And, if we could 
get people to store water on those it would help.
    Wouldn't solve the problem, because of the massive amount 
of inflows into the lake. It would help. The problem is, 
there's nothing we can do to compel people to store water on 
their land. We'd have to have some incentive system to 
encourage them to do so. We've investigated that as well. And, 
we have asked--as part of this report--we have asked the Corps 
to come back and evaluate, What is the potential for Upper 
Basin storage? And, what would it take to incentivize people to 
store water? Because, it would have to be voluntary, according 
to North Dakota law.
    Other--I know we're very close to the time that we have 
committed to leaving this facility, but if there are others who 
want to be heard, we want to give them a chance.
    [No response.]
    The Chairman. If not, let me, again, thank the witnesses 
here today, Todd Sando, the State engineer; Lisbon Mayor Ross 
Cole; Fort Ransom Mayor Jim Thernes; Neil Olerud, chairman of 
the commission here, Ransom County Commission; Teresa 
Rotenberger, the emergency manager; and former Lisbon Mayor 
Morrie Saxerud.
    And, of course, to the Governor, thank you so much for, 
again, being part of these listening and hearing sessions as--
we've conducted around the State.
    Governor Hoeven: Thank you, Senator.
    The Chairman. Thank you all.
    Hearing stands adjourned.
    [Whereupon, at 2:53 p.m., the hearing was adjourned.]


FIELD HEARING TRANSPORTATION INFRASTRUCTURE'S ROLE IN ECONOMIC GROWTH: 
                                 ND-13

                              ----------                              


                       Wednesday, August 18, 2010


                                        U.S. Senate
                                    Committee on the Budget
                                             Wahpeton, North Dakota
    The Committee met, pursuant to notice, at 9:00 a.m., at the 
Red River Valley Room, Student Center, North Dakota State 
College of Science, Wahpeton, North Dakota, Hon. Kent Conrad, 
Chairman of the Committee, presiding.
    Present: Senator Conrad [presiding].

              OPENING STATEMENT OF SENATOR CONRAD

    The Chairman. The hearing will come to order.
    I want to welcome everyone to this hearing of the Senate 
Budget Committee.
    This is an official hearing of the committee, so we
    will be following the rules of the United States Senate. 
And that means an official record will be kept, and this will 
be shared with our colleagues.
    I want to specially recognize State Senator Arden Anderson, 
who is with us.
    Arden, will you stand and be recognized? We appreciate that 
you are here.
    Mr. Arden. Senator.
    The Chairman. County Commissioner Perry Miller, who is 
here.
    Perry, if you'd stand and be recognized. Thanks for being 
here.
    The title of this hearing is ``Transportation 
Infrastructure's Role in Economic Growth: North Dakota 13.'' 
We'll be focusing on what investments may be needed to upgrade 
and improve Highway 13 to promote the economy and agriculture 
in North Dakota. I also want to focus on how we can make 
Highway 13 even more safe.
    I want to begin by welcoming our especially distinguished 
panel of witnesses today: North Dakota Department of 
Transportation director, Francis Ziegler.
    Welcome, Francis. It's excellent that you are here, and we 
appreciate, so much, your being with us in this series of 
hearings, in preparation for the new transportation bill.
    Wahpeton mayor, Jim Sturdevant.
    Good to have you, Jim. Delighted that you're here.
    Dan Antrium, the vice president for North American 
Operations at Bobcat. And I was with Jim yesterday in Gwinner. 
He gave me a tour of the plant, and I asked him if they had 
repaired the damage I had done.
    [Laughter.]
    The Chairman. He said it's all cleaned up.
    And Pat Pithey, merchant manager at Cargill.
    I hope I've pronounced that correctly, Pat.
    I look forward to hearing from all of you, and I will share 
your concerns and ideas with our colleagues back in Washington.
    Let me just, first, explain why we're doing this series of 
hearings. This is a Budget Committee hearing because the Budget 
Committee has the first obligation to deal with the new 
transportation bill, in terms of the funding that will be made 
available to write that bill. But, beyond that, the committee 
of jurisdiction has told us that, unless hearings have been 
held, there will not be project funding over and above the 
basic formula funding made available to any project across the 
country. If that standard is adhered to, that is very important 
for us to know, because we then need to make sure that we have 
had hearings on any projects that may require additional 
funding, over and above formula funding.
    As you all know, there is a basic formula that distributes 
money to the States; then, on top of that, there is special 
funding that is approved for individual projects. And we have 
been very successful at getting that kind of special funding in 
the past, partly because I have been a conferee on the 
transportation bills. We hope to be successful--again, because 
we have special needs. With the energy development in North 
Dakota and with the agriculture development in North Dakota, we 
have special needs that go beyond the simple formula funding.

[GRAPHIC] [TIFF OMITTED] T8154.422


    Highway 13 provides a critical east-west trucking route for 
agriculture, manufacturing, and energy industries in this area. 
These industries are vital to economic growth and job creation 
in North Dakota. I certainly saw it yesterday at the Bobcat 
plant. We are so proud of what they are doing there. They're 
headed for more than 1,000 employees there, turning out a 
world-class product. And I told Dan and Troy, and others in the 
leadership there yesterday, that one of that's a point of pride 
with me as I go and travel around the world is, everywhere I 
go, there's a Bobcat. You know? Makes you feel good and proud 
that that kind of product is being produced right here in North 
Dakota.
    It's--the improvements to Highway 13 will pay dividends, I 
believe, for North Dakota's economy. North Dakota 13 is a major 
route for crops and livestock. It's a crucial link for 
manufacturing facilities along the corridor. And it is a 
superload route, allowing oversized truckloads for wind turbine 
components, which is, we know, a growing emphasis here in North 
Dakota.

[GRAPHIC] [TIFF OMITTED] T8154.422


    Highway 13 is particularly important to agriculture in the 
State. In the eight counties on the Highway 8--13 corridor, 
there was $1.1 billion in agriculture production in 2007, the 
most recent year for which we have full records. Many of North 
Dakota's key agricultural commodities are produced in this 
area, including 41 percent of North Dakota's corn crop, with 
117 million bushels produced just last year; 31 percent of 
North Dakota's soybean crop, with 32 and a half million bushels 
produced last year; 19 percent of North Dakota--North Dakota's 
cattle are on this corridor, with 339,000 head on ranches last 
year; 11 percent of North Dakota's sugar beet crop, with 
554,000 tons produced last year. And, by the way, this morning 
we were up a little early and went by the Minn-Dak plant and 
saw the beet campaign getting underway, truck after truck after 
truck after truck, hauling beets to that facility. And we know 
the implications that has for the road network in the area. Ten 
percent of North Dakota's wheat crop, with 30 million bushels 
produced last year. So, Highway 13 is part of the road network 
that gets these products to market.
    Now is an important time to focus on our transportation 
infrastructure needs, because the administration is in the 
process of developing its transportation reauthorization bill. 
It's worth remembering that North Dakota benefited greatly from 
the last highway bill, which was completed in 2005. As a 
conferee on that bill--and conferees are those members who are 
selected to work out the differences between the Senate bill 
and the House bill--and as chairman of the Budget Committee and 
as a senior member of the Finance Committee, I was asked to 
serve on that Conference Committee in the previous Congress, 
and anticipate a similar responsibility this next year.

[GRAPHIC] [TIFF OMITTED] T8154.352


    Specifically, we were able to secure $1.5 billion for North 
Dakota, a 31-percent increase over the previous bill. Annually, 
that average--about $234 million for highways, bridges, and the 
rest, with additional funding provided for transit programs.
    We did very well by securing 2 dollars, roughly, for every 
dollar in tax money collected in our State, ranking us among 
the top four States in the Nation for return on tax dollars 
sent to Washington. In other words, we're getting almost 2 
dollars back for every dollar we send in.
    I also fought hard for direct investments for specific 
priorities identified by the North Dakota Department of 
Transportation. And that's the way we operate in this State; we 
depend on the excellent work that Director Ziegler and his team 
does to establish the priorities in our State. We follow that 
priority list in priority order. When we get additional 
funding, we apply that; we don't just go around and base it on, 
you know, what road I--Kent Conrad was on, and whether he's hit 
a hot pothole. We base it on an analysis that has been done by 
the North Dakota Department of Transportation on, What are the 
priority needs of the State? And again, that's why hearings 
like this are important.
    Here are some of the priorities I will focus on as we 
consider the next highway bill:
    The next legislation must identify sufficient funding so 
that the infrastructure investments are secure and robust over 
the longer term, and are paid for. I want to emphasize that it 
is imperative that the money not be borrowed. We already have 
too much debt. So, things are going to have to be paid for.

[GRAPHIC] [TIFF OMITTED] T8154.353


    States and communities must be able to rely on the money 
that is committed. Francis has made this point to me over and 
over during this last year.
    Next, any new highway bill must maintain recognition that 
rural transportation needs are vital to the Nation.
    And finally, I'll fight for continued for recognition of 
the importance of a nationally connected highway system. What 
does that mean? Well, you can't have a national highway system 
without every part of the system being in good shape. And, you 
know, sometimes we get criticized for the level of spending in 
North Dakota on highways, in comparison to what other States 
receive. The hard reality is, we are a rural State, we're a 
very large State; we're sparsely populated. And if we don't get 
disproportionate funding, there won't be a national network to 
serve the transportation needs of America. That is an economic 
security matter, it is a military security matter, and it is 
critically important that we have a national network that can 
provide for the transportation needs of the country.
    I am particularly interested in hearing from our witnesses 
on the immediate investments that are needed in Highway 13, and 
what future investments are needed to support the growth in 
this area.
    With that, we will turn to our witnesses. And I want to 
start with Director Ziegler.
    Again I say to you, Francis, how much we appreciate your 
taking your time, and the time of your team, to come and 
testify at this series of hearings, and to also say what strong 
credibility you enjoy in Washington and around the country with 
your colleagues and with national transportation officials. And 
I can tell you, when we have a hearing transcript and Francis 
Ziegler has testified, that is considered to have credibility 
with national transportation officials in Washington. So, I 
especially value your participation.
    Mr. Ziegler. Thank you.
    The Chairman. Welcome.

  STATEMENT OF FRANCIS ZIEGLER, P.E., DIRECTOR, NORTH DAKOTA 
                  DEPARTMENT OF TRANSPORTATION

    Mr. Ziegler. Well, good morning, Mr. Chairman. Thank you. 
I'm Francis Ziegler, director of North Dakota Department of 
Transportation, and I want to thank you, Senator, for the 
opportunity to appear before the committee today, and thanks 
for your interest and support for improving transportation in 
North Dakota.
    Transportation, as we all know, is vitally important to 
supporting our country's economic, competitive, and our State's 
economic growth. It's also critical to moving freight, 
connecting manufacturers to retailers, farms to markets, 
shippers to railroads, airports, and seaports, and motorists to 
jobs, schools, and stores.
    This year, the Department of Transportation has undertaken 
the largest construction program in the history of the 
Department. Approximately $450 million in projects on nearly 
2,000 miles of roadway are being done, statewide. This includes 
projects under the regular Federal aid program, under the 
stimulus, or ARRA, the American Recovery and Reinvestment Act, 
under the emergency relief--much of that is in the Devils Lake 
area--and then State funding.
    Today, I'd like to address the State Highway 13 corridor--
as you've indicated, Mr. Chairman--challenges facing North 
Dakota's transportation system, and the need for a long-term 
Federal transportation bill that serves North Dakota and the 
Nation.
    North Dakota State Highway 13 corridor, I'll start with 
that. State Highway 13 is a major east-west corridor serving 
the southwestern part of North Dakota. It links ag producers 
with value-added processing facilities, such as ProGold, 
managed by Cargo, and--that's near Wahpeton--and manufacturing 
facilities, such as Bobcat and Gwinner. The Department 
recognizes the importance of the North Dakota 13 corridor, all 
183 miles of it, between 1804 and the Minnesota border. From 
1999 to 2009, approximately $43.7 million was invested in 
preserving and improving 163 miles of this corridor. In 2009, 
the average daily traffic on Highway 13 was just over 1100 
vehicles a day. This ranges from a low of 230 vehicles near 
Highway 1804 to just over 12,700 vehicles at the Minnesota 
border. The average truck traffic is about 170 trucks per day, 
with a low of 30 at the west end of the corridor, to about 780 
trucks east of the corridor.
    The combined average annual daily traffic volume in the 
east-westbound between here and Wahpeton and I-29, which is the 
largest component of our traffic volume, and the Minnesota 
border, is just over 6100 vehicles a day, and that ranges from 
a low of 3655, just east of I-29, to a high, like I've said 
before, of over 12,700 near the Minnesota border. The average 
truck traffic is about 650, and a low of 460 to a high of 780 
trucks per day on this route between here and I-29.
    There are about $41 million worth of projects scheduled on 
Highway 13 for the years 2010 to 2014. This summer, as you can 
see, the Dakota Avenue project is being completed in Wahpeton. 
We're very happy to have the mayor here today, and we've talked 
a little bit about the project this morning. He feels it's 
going well, and we're happy with that.
    We--I also have with me today chief engineer Grant Levi and 
Bob Walton, our district engineer, who oversee that--get that 
ball rolling on those projects, to keep 'em going. So--
    The Chairman. Especially want to recognize Grant, who's 
with us, and has been with us in each one of these hearings. 
Appreciate very much his professional work.
    Voice: Thank you. Thank you.
    Mr. Ziegler. We have the chart there, Senator, for you. 
It's just in your foldout, and it--like I said, the projects go 
all the way--from 1804 all the way to the Minnesota border, and 
some of it is minor rehab with seal coats--that's to preserve 
the pavement--to think-lift overlays, to major reconstruction. 
We have an area that we have to do a major reconstruction on 
between Wishek and Lehr, where the water is eating away on the 
road. And actually that's an area that has water over the road 
now, so we're designing that as we speak, and that needs to be 
built next year, because the wind and the wave action is taking 
that road out. So, we're working on it.
    The Chairman. So, just to be clear on that, that's a major 
rehab.
    Mr. Ziegler. Mr. Chairman--Senator, that is a major rehab. 
That's a major grading. We're going to have raise that grade 5, 
6 feet just to keep the water away from the top of the roadway.
    It was interesting, Senator--just a side note--Grant and I 
made a trip to that area, and as we parked in the area and 
looked at it, we'd look to the southeast, and there was water 
as far as the eye could see. And there was a southeast wind, 
and it was really just eating away at the road. And so, it 
needed--needs a lot of work.
    So, from there I'll go on, Senator, to North Dakota's 
transportation system challenges. The DOT and the Upper Great 
Plains Transportation Institute recently held public input 
meetings across the State to discuss transportation issues. 
Input from those meetings indicates that--and these are the--
really, the two most important points that we learned from 
them--is that residents want more transportation infrastructure 
across the State. Public expectations are growing for load-
carrying capacity, increased shoulder width and passing lanes, 
and some want more four-lane roads. And obviously the desire is 
to have year-round capacity with not only snow and ice removal, 
but also with load-carrying.
    But, our most critical challenges are:
    First of all, it's to provide a transportation system to 
move commodities year-round. The DOT utilizes load restrictions 
to reduce damage to roadways caused by heavy loads at a time of 
the year when the highway pavement's most vulnerable; 
typically, during the spring of the year. Load restrictions add 
to the cost of doing business. We can eliminate load 
restrictions if we put enough pavement on it so that the soft 
sub-base doesn't affect the pavement, so it doesn't beak up 
under the heavier loads.
    But, just as an example there, Senator--Mr. Chairman--
farmers incur additional transportation costs as they must 
deter around load restrictions or make more trips via the same 
route with reduced loads. It costs about $4 per loaded mile to 
ship a five-axle semi that is fully loaded. For example, to 
ship a load of corn 75 miles to the ProGold plant, it costs 
about $300. If the same amount of product was shipped on a road 
with a 6-ton load restriction, it costs 1.62 times more, or 
$486. And the 1.62 times comes from a study that the Upper 
Great Plains Transportation Institute did for us a number of 
years ago, and it--I'm very confident in that number, that it 
costs that much more to move that same amount of corn, or 
wheat, or whatever commodity you have; and corn is that one 
that we're talking about here.
    Secondly, adding grade-raises to the Devils Lake area and 
the Prairie Pothole Region. Eighteen projects are currently 
planned from 2010 to 2012 in the Devils Lake Basin, at an 
estimated cost of $168.4 million. Upon completion of these 
projects, the roadways will be raised to an elevation of 1460 
feet. Senator, we've talked to you a lot about these numbers, 
really appreciate the ER program. And I know these numbers, as 
you see 'em, as you remember 'em, they keep growing. The fact 
is that some of the costs are going up, but there's always more 
damage that's being done to riprapp and whatever else we have 
out there. And so, the number is a big number, and we do 
appreciate the ER funding that comes to help us with those 
projects.
    As a result of recent heavy rains, 22 sites on State 
highways in the Prairie Pothole Region--that's south of Devils 
Lake, all the way down to the south-central part of the State, 
the Ashley-Wishek area, and then farther east, to the Allendale 
area--but, there are 22 sites that are inundated--or, 22 sites 
that we're closer being--close to being, or are, inundated with 
water; four, where the water has run over the road and they 
qualify for emergency relief funding. For those four, it'll 
cost an estimated 3.9 million to raise the grade.
    What's interesting there is that you find stop signs in the 
middle of the highway, out in the middle of nowhere, so to 
speak, and you have to stop. And there's a sign, says, ``Take 
turns.'' And that means you take turns driving through the 
water, going down the center of the road. Because if you happen 
to get into that ditch, there's a lot of--there's deep water 
there.
    There are 16 additional sites where the water is close to 
the edge of the driving lane. It's estimated to cost about 24.1 
million to raise these 16 sites to 5 feet above the water 
level. Unfortunately, these 16 sites aren't eligible for ER 
funding under the present criteria. We'd appreciate it if we 
could obtain ER eligibility based on the 3-foot freeboard 
criterias used in the Devils Lake Basin. We will be working 
with the Federal Highway Administration on that issue.
    Due to the aging of the State's transportation system, the 
Department has had to move to a preventive maintenance program. 
And, basically, that's seal coats and overlays--thin-lift 
overlays. Preventive maintenance reduces shoulder width and the 
ability to continue such a program. Load capacity and ride will 
further deteriorate without widening many miles of road in the 
future.
    And then, the fourth and most important point is the most--
is the funding. Most recent multiyear Federal transportation 
bill expired September 30th of 2009. Since then, Congress has 
passed a series of short-term extensions. The situation results 
in considerable uncertainty as we attempt to prepare our budget 
and do long-range planning. We'd appreciate a long-term 
transportation bill that's good for North Dakota, enacted as 
soon as possible. However, if there are to be further 
extensions, we would ask that they be extended for at least a 
year so that--a year to 18 months--so that we can help industry 
and the Department kind of plan for the future.
    The long-term Federal legislation, and just making a few 
points about the pending authorizing proposal that's out there 
now. The DOT and other rural States in the Midwest have looked 
at that bill, or that proposal, and have some concerns with it. 
The fact that it would, number one, create a large new funding 
only for metropolitan areas with a population of 500,000 or 
more, and provide significant funding for large nationally 
significant projects--a high-speed rail program and 
infrastructure banks, all of which are geared to assist large 
urban States --reduces the proportion of overall program 
funding for the highway portion of the program. It provides a 
significant increase in the share of overall funding to 
transit, relative to highways. While we support transit in 
North Dakota, Mr. Chairman, we believe the current ratio of 
funding for roads and bridges to transit should remain the 
same, and that's about a four-to-one.
    It would give increased emphasis to discretionary and 
nonformula programs compared to formula funds. We don't support 
funding large new discretionary programs, particularly that 
are--programs that aren't accessible to North Dakota. We're 
concerned that the House legislation could provide North Dakota 
with a considerably reduced share of overall funding, compared 
to the current law.
    To offset some of those proposals in the House, we're 
pleased that bipartisan rural mobility legislation, Senate bill 
3485, was recently introduced by you, Mr. Chairman, Senator 
Barrasso, and 11 other Senators. That legislation basically 
takes the position that if new legislation is to dedicate 
significant highway program funding only for large metropolitan 
areas, the legislation would also include a counterpart program 
for funding rural States. And we do appreciate that action.
    Some of the things that we talk about nationally with--on 
the next highway bill--and what we would appreciate is a long-
term, balanced bill, funding that addresses rural as well as 
metropolitan needs. And we certainly recognize the metropolitan 
needs, and--but, we also recognize the fact that North Dakota 
and other rural States need connectivity to those rural 
metropolitan areas, as you've indicated before, Mr. Chairman.
    Increase the overall size of the Federal highway program to 
address the growing needs and counteract the impacts of highway 
construction inflation. Mr. Chairman, today I did not put the 
chart in here for you, but I can share with you that, from 2001 
to 2010, inflation increased by 87 percent. So, what cost a 
dollar to build in 2001 costs $1.87 today. And it's not that 
people are getting wealthy on it. What it is, is the cost of 
the raw materials in products that go into the roadway system.
    We'd also ask that the new bill provide for rural States, 
like North Dakota, to participate at least proportionately in 
any growth of the overall Federal highway and transportation 
program, both as to formula and other funds; ask that it 
continue to provide funding for the entire Federal aid system, 
not just the national highway system--Mr. Chairman, I believe 
you addressed that early on; to allocate a higher percentage of 
the overall program through the formula process rather than 
through discretionary or allocation programs; and to maintain 
the funding ratio for the highway and transit programs at a 
four-to-one, like I indicated before.
    Streamlining the program and project delivery process. 
Victor Mendez, the Federal Highway administrator, has done a 
good job in starting that. He's working with our Association of 
State Highway and Transportation Officials on an Every Day 
Counts Program, and we're all working toward making sure that, 
when we decide on a project, that we can get it from concept to 
construction in as short a time as possible, while not ignoring 
the environment and the cultural issues that go with that type 
of a development.
    Provide flexibility to rural States and communities to 
pursue solutions that are practical to them if programs to 
advance livability, complete streets, and climate change are 
implemented. We've talked to Victor a lot about the livability 
program, and he understands that. In rural America, we do have 
large communities, and we work hard to make sure that we 
address the livability issues and the street issues, but, when 
it comes to rural America, we're just looking for a basic 
transportation system to move people and goods.
    In conclusion, Mr. Chairman, I believe it's essential for 
Congress to recognize that increased Federal investment in 
highways and surface transportation for rural States is 
important to the national interest. This increased investment 
is important to all 50 State transportation departments that 
deal with safely moving people and goods.
    That concludes my formal testimony, Mr. Chairman. I'd be 
happy to respond to any questions that you might have.
    [The prepared statement of Mr. Ziegler follows:]

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    [GRAPHIC] [TIFF OMITTED] T8154.272
    

    The Chairman. Thank you, Director Ziegler, for once again 
providing excellent and important testimony.
    Your organization--that is, the transportation directors 
across the country--have called for a level of funding in a new 
6-year bill. Could you share with us what that level of funding 
is that your counterparts, and you, are recommending?
    Mr. Ziegler. Yes. Mr. Chairman, based on what AASHTO--is 
our American Association of State Highway and Transportation 
Officials--has gone on record as saying that, for roads and 
bridges, we're looking at a need of 375 billion in a 6-year 
program, and then a $93-billion program for transit, for a 
total of $468 billion for roads, bridges, and transit.
    The Chairman. And that is on a 6-year bill, so that's $78 
billion a year, by my calculation.
    Mr. Ziegler. That's correct, Mr. Chairman.
    The Chairman. $78 billion a year. And the trust fund--
refresh my memory, here--the trust fund, I believe, is 
providing about 31 billion a year?
    Mr. Ziegler. That is correct, Mr. Chairman.
    The Chairman. So, we have a shortfall of $47 billion a 
year.
    Mr. Ziegler. That's correct.
    The Chairman. And I just think it's very important to put 
on the record, this is the reality that we confront. The need, 
as determined by the transportation directors all across the 
country, is roughly $78 billion a year. And I can tell you, 
I've had my people review that estimate, and we think it's 
pretty much on target. We don't think you've gilded the lily 
here on us. We think you've given a pretty accurate assessment 
of the need.
    And, on the other hand, the trust fund that's funded by gas 
tax is only providing $31 billion a year of income to pay for 
that bill. So, that is a yearly shortfall of $47 billion a 
year.
    And the question is, Where does that money come from? 
Obviously, one possibility is to increase the gas tax. I can 
tell you, that's not very popular. Second possibility is to 
provide some under--other funding mechanism. Because what's 
happening to the gas tax is, as cars become more fuel 
efficient--and now we're moving to electric vehicles; there 
won't be any gas tax at all--we've got a funding mechanism that 
really doesn't meet the needs that we confront today.
    And, Francis, what have your--what has your organization 
thought of, in terms of options? Are there other things? 
Obviously, toll roads is another option that has been 
considered for at least parts of the country. It doesn't work 
well in our part of the country. I mean, are there other 
considerations, other options that your group thinks needs to 
be considered?
    Mr. Ziegler. Mr. Chairman, SAFETEA-LU had a requirement 
that--and they were established as part of the SAFETEA-LU--let 
me say it another way. There was a Commission on Transportation 
Funding, and they took input from around the country. And they 
have about 10 different options for funding. I can't recite 
them all to you, Mr. Chairman, but I know you've hit the top 
three. Gas tax was one of them. VMT--vehicle miles traveled--
was another. Toll roads was another. And public/private 
partnerships was another. And there were quite a number of 
others, but the --those were the big four.
    And what we've done here in North Dakota--obviously, we 
don't, as you said, have toll roads, because it just doesn't 
work, with the volumes of traffic that we have. While we have 
needs to move commodities, we don't have enough volumes to pay 
for a road. So, the toll road doesn't work. But, we have used, 
not public/private, but public/public partnerships. The City of 
Fargo, West Fargo--and obviously you'll be hearing from the 
mayors soon--they do contribute to the project as a percentage 
participation.
    And so, in the future, I would expect that there would 
probably be more of those public/public partnerships, but, at 
the same time, we need the fundamental funding to address the 
big needs. And I'm not sure how much private funding that we 
would be able to get for infrastructure.
    But, the Commission did come up with quite a number of 
options that are all on the table for discussion.
    The Chairman. All right. I appreciate that. And, you know, 
it's--I just want to make this point, that this is not going to 
be easy to resolve. This bill must be paid for. We have too 
much debt, but we can't add to the debt, so it's going to have 
to be--the cost is going to have to be covered.
    And could we cut back some on the spending proposal? Yes. 
And, no doubt, that will have to be part of the solution, as 
well. But, you can see, there is a chasm here between what the 
trust fund is providing and what the established needs are.
    With that, again, Francis, thank you for being here. I 
think we'd, at this point in the hearing, turn to the rest of 
the panel, ask each of them to testify, and then we'll close it 
out with additional questions for the whole panel.
    Mayor Sturdevant, welcome, good to have you here. Please--
    Mr. Sturdevant. Thank you, Senator. And welcome to--
    The Chairman. --please proceed.
    And, before you do, I want to recognize that Andrea 
Trevneck, who is Governor Hoeven's senior policy advisor, is 
with us.
    Andrea, why don't you stand and be recognized. Thank you 
very much for being here.
    Thank the Governor, as well, for having his team here, 
representing the State of North Dakota. I very much appreciate 
that.

   STATEMENT OF HON. JIM STURDEVANT, MAYOR, CITY OF WAHPETON

    Mr. Sturdevant. Okay. My name is Jim Sturdevant, mayor of 
Wahpeton. And, first of all, I'd like to welcome you here, 
Senator Conrad, and to have you holding your Senate Budget 
Committee meeting here in Wahpeton, I think, is very important. 
Highway 13 is a link to Wahpeton. Very important to us. And so, 
my comments will be, basically, on the importance of Highway 13 
to our community and our region. So--
    North Dakota State Highway 13 is an essential and robust 
part of the infrastructure and economy serving the southeastern 
region of North Dakota and the city of Wahpeton. Highway 13 
connects the region from the Red River to the Missouri River 
with 200 miles of roadway linking agriculture, industry, 
tourist, and education to our communities. And I'd just like to 
reference and make a few comments on each one of those areas.
    First, agriculture. Richland County is the second highest 
agriculture revenue-producing county in the State of North 
Dakota, with agricultural sales exceeding $261 million 
annually, and that's per the USDA Census of Agriculture of 
2007. The presence of value-added agriculture serves as an 
economic multiplier, creating jobs in the manufacturing, 
transportation, wholesale, and service industries. Local 
processors, including Minn-Dak Farmers Co-op in Cargill, 
employs over 600 people and process crops from more than 500 
farms dispersed over a seven-county area adjacent to Wahpeton, 
and they all depend on Highway--the Highway 13 corridor. The 
annual sugar beet harvest requires a--trucking of up to 3 
million tons of product in 25-ton increments, or 120,000 truck 
trips, from farm to point--first point of delivery. Highway 13 
is an essential asset that makes this possible.
    The other area would be industry. Wahpeton has a diverse 
manufacturing base ranging from millwork production to data 
storage technology. More than 1162 people work in manufacturing 
in the Wahpeton area, with an estimated economic impact of over 
$59 million. The Highway 13 corridor is a asset that links 
major interstate highways I- 29 and I-94, giving our community 
a logistical advantage to prospective employers.
    Another area of importance is the tourism to Wahpeton. 
Wahpeton's Chahinkapa Zoo hosts approximately 50,000 visitors 
annually. It is estimating 60 percent of these visitors are 
from out of State, representing all 50 States and 15 foreign 
countries in its guest registries. The State of North Dakota 
estimates 1 in 12 jobs are tied to tourism, a strong framework 
of infrastructure is essential to the tourism industry. North 
Dakota Highway 13 provides access to two national wildlife 
refuges, three State historical sites, three State parks, and 
multiple hunting and fishing destinations.
    And the other important aspect of Highway 13 to our 
community is education. North Dakota State College of Science 
is a 2-year comprehensive residential college which is--main 
campus located in Wahpeton--that offers degrees, certificates, 
and diplomas in over 50 academic options in traditional career 
and technical studies, as well as liberal arts. Approximately 
2400 students are enrolled at NDSCS, representing every county 
in North Dakota. The academic, athletic, and cultural 
activities of the college are dependent on strong 
transportation infrastructure and North Dakota State Highway 
13.
    North Dakota Highway 13 is a gateway to Wahpeton and 
essential to the economy of the southeast regions of North 
Dakota.
    I want to thank you very much.
    [The prepared statement of Mr. Sturdevant follows:]

    [GRAPHIC] [TIFF OMITTED] T8154.267
    

    The Chairman. Thank you, Mayor. Your testimony is right on 
point and exactly what we need for the purposes of this 
hearing, which is to emphasize the critical role that Highway 
13 plays. So, thank you very much.
    Mr. Sturdevant. Thank you.
    The Chairman. Exactly what we needed.
    Let me turn to our next witness. And please proceed with 
your testimony.

   STATEMENT OF DAN ANTRIUM, VICE PRESIDENT, NORTH AMERICAN 
                   OPERATIONS, BOBCAT COMPANY

    Mr. Antrium. Thank you, Chairman Conrad, Director Ziegler, 
Mayor Sturdevant, and Mr. Pithey, for the opportunity to 
discuss the importance of North Dakota Highway 13 to Bobcat and 
Doosan, our parent company.
    As, you know, Gwinner, which is our main facility for 
Bobcat North America, is situated right on Highway 13 and has 
been our home to our primary production facility for more than 
60 years, dating back to when we were Melroe Manufacturing, 
even before the development of the Bobcat Loader, for which we 
are known and named for today.
    For six decades, North Dakota Highway 13 has been central 
to our distribution and supply chain systems, serving as a 
primary artery for shipments going to and from anywhere east of 
Gwinner, a direction that has been very important to our 
business. Most of what we produce goes east, and most of our 
supplied materials and components come in from the east.
    We have historical data that details truck runs and 
tonnages loads in and out of Gwinner, using North Dakota 
Highway 13. But, today we'll focus on current figures that 
demonstrate its importance to both our Gwinner plant and our 
newer Wahpeton plant, which produces our valves and cylinders 
production, which is also, of course, situated on this vital 
transportation link.
    We estimate that more than 141,000 tons of material and 
product to and from Bobcat will be transported in and out of 
Gwinner and through Wahpeton via North Dakota Highway 13 this 
year. That covers more than 527,000 miles driven by various 
trucks, some of which are carrying Bobcat-produced parts and 
equipment, and others with supplied components that are 
critical to our manufacturing operations. The total number of 
truckloads is 10,000.
    The shipments in and out of Gwinner through Wahpeton can be 
split into five categories: Gwinner inbound shipments to valve 
and cylinders from our Wahpeton facility, and return trips to 
Wahpeton; Bobcat equipment being shipped from Gwinner to our 
Brooklyn Park, Minnesota, facility for load consolidation and 
distribution to points east in our dealer network; inbound 
shipments to Gwinner, partial truckloads of Bobcat supplies, 
utilizing third- party public carriers, such as Yellow Freight; 
inbound shipments to Gwinner, full truckloads of Bobcat 
supplies utilizing our dedicated fleet or carriers; inbound 
shipments to Gwinner, coming direct from the suppliers 
utilizing dedicated fleet or carriers.
    The following numbers are based on current-year estimates. 
So, we--using current-year estimates, but you have to remember, 
the prior years, we've seen dramatic-- more impacts to this 
number, based on volumes, because we all know what's happened 
to the economy recently. Annual freight, in pounds, moved from 
Wahpeton to Gwinner along Highway 13, 22,500,000 pounds; annual 
freight, in pounds, moved from Gwinner to our Brooklyn Park 
facility along Highway 13, 217,336,000 pounds; annual total 
freight, in pounds, coming in from Bobcat/Doosan suppliers, 
using our fleet or carriers--supplier fleet or carriers or 
third- party shipping companies is 42,500,000 pounds. As you 
can see, freight that includes Bobcat-produced equipment headed 
toward our Brooklyn Park facility makes up the bulk of this; 70 
percent of our out-bound volume goes east through Brooklyn 
Park, and North Dakota Highway 13 is the primary conduit in 
getting there.
    Other impressive numbers, the inbound supplies are not 
coming from Wahpeton, 70 percent of the total freight from our 
outside suppliers, including--, comes from the east. Again, the 
numbers we are providing are based on this year's estimates. 
Please note that our business volume is down substantially, as 
I talked earlier, roughly 40 percent from 2006.
    So, these are three key factors that could lead to freight 
pounds or tonnage in truckloads increase in the future: Number 
one, our general business rebound or growth, and our markets 
resulted in more equipment shipments east. The Wahpeton 
facility, previously our valves and cylinder operations, was 
located in Bismarck. We relocated that to Wahpeton late last 
year. As production at Gwinner plant increases, so will the 
need for valves and cylinders out of Wahpeton, and the number 
of trips associated with that.
    Increased number of equipment lines produced in Gwinner. 
Previously, Gwinner only made loaders at the plant in Gwinner. 
Late last year, we consolidated those operations and moved 
Excavator, our Toolcat utility work machine, and our mini-track 
loader production from Bismarck to Gwinner. So, again, 
additional lines being produced at the Gwinner facility could 
result in more shipments, if business, overall, increases.
    As I stated, North Dakota Highway 13 has always been vital 
to our distribution of our products and receiving of supply and 
components shipments. With the addition of our Brooklyn Park 
facility in 2006, the addition of the Wahpeton facility in 
2009, and the consolidation of our manufacturing operations in 
2009, this artery has even become more vital.
    Specific to the last example, Interstate 94 was previously 
a critical link, from our Bismarck plant to all points east, 
including Brooklyn Park. With Gwinner now the only North Dakota 
plant producing whole-good products, Highway 13 is our only 
link east. Plus, it connects our only two North Dakota 
manufacturing locations.
    If you like, we obviously have some more--additional 
figures on details of truckloads and whatnot, freight volumes, 
miles, coverage in shipments during various times of the week 
and over various time periods. But, the total numbers we have 
here today should demonstrate the importance of North Dakota 
Highway 13 to Bobcat/Doosan. It is, indeed, a vital 
transportation link for us.
    Thank you, Chairman and other panelists. Thank you for your 
time today. I'd be happy to answer any questions you may have.
    [The prepared statement of Mr. Antrium follows:]

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    [GRAPHIC] [TIFF OMITTED] T8154.266
    

    The Chairman. Thank you, Dan, really excellent testimony. 
It's pretty startling, isn't it? The numbers really jump out at 
you--10,000--10,000 truckloads.
    Mayor Sturdevant, in your testimony, in the beet harvest, 
120,000 truck trips in the beet harvest?
    Mr. Sturdevant. That's correct.
    The Chairman. So, there's really--I mean--
    Mr. Sturdevant. It's amazing.
    The Chairman. --it's amazing. But, we saw--today--we saw 
the beginning of the beet campaign. And, you know, those trucks 
were rolling, one after another after another.
    Again, thank you very much, Dan. That really, I think, will 
provide important testimony. And I think that will catch the 
attention of our colleagues when they see these really eye-
popping numbers.
    Next, we'll go--final witness is Patrick Pithey, the 
merchandising manager for Cargill Corn Milling, here in 
Wahpeton.
    Welcome. Good to have you here.

       STATEMENT OF PAT PITHEY, MERCHANT MANAGER, CARGILL

    Mr. Pithey. Honorable Senator Conrad, members of the panel, 
and distinguished guests, I thank you for the opportunity to 
appear before you today.
    My name is Patrick Pithey. I am the merchandising manager 
for Cargill Corn Milling, here in Wahpeton.
    Cargill's an international producer and marketer of food, 
agricultural, financial, and industrial products and services. 
Founded in 1865, our privately-held company employs 131,000 
people, in 66 countries. We help customers succeed through 
collaboration and innovation, and are committed to sharing our 
global knowledge and experience to help meet economic and 
environmental and social challenges.
    We have 476 employees in North Dakota, at five different 
locations. And I'm proud to say that our chairman and CEO, 
Gregory Page, is a native of North Dakota and a graduate of 
UND.
    Sustainable transportation infrastructure is essential for 
economic growth. North Dakota, and specifically the 
southeastern region, enjoy a diverse economic base that deploys 
light and medium manufacturing and distribution, commercial 
retail, financial and medical services, educational and 
recreational opportunities, along with a continuum of expanding 
agricultural production, processing, and distribution 
activities. The capability to move raw materials in and 
finished products to market; employees to and from home, work 
and Main Street; students to campus and patients to care, 
happens only when a safe and effective transportation 
infrastructure is maintained.
    Transportation infrastructure is critical to our business 
in Wahpeton on a day-to-day basis, and North Dakota Highway 13 
is a primary route. It impacts our 120 employees and additional 
50 onsite contractors as they commute to and from work. It 
facilitates the annual delivery of over 26,000 loads of corn 
from farmers within the region. It enables the shipments of 
over 13,000 loads of finished product to reach our customers 
around the country.
    Over the past 10 years, corn production in Richland County 
has increased by over 60 percent, similar to agricultural 
production trends across the region, as well as the State. 
Being able to safely and efficiently transport that production 
to market is vital for the producer, the processer/marketer, 
and the consumer.
    Continued investment in maintenance of roadway 
infrastructure is vital for economic growth in this region. 
While we do not have specific comments today on transportation 
funding strategies, we view transportation funding as an 
important part of economic growth, and vital to agricultural 
markets.
    Thank you.
    [The prepared statement of Mr. Pithey follows:]

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    [GRAPHIC] [TIFF OMITTED] T8154.263
    

    The Chairman. Thank you, again. More really eye-popping 
numbers--26,000 loads of corn, 13,000 loads of finished 
product.
    You know, I don't think many of us, probably, have numbers 
like that in our heads when we think about the activity of 
these facilities, how really tremendous the loads are, and the 
demands on our transportation system. And it takes us back to 
the point that Director Ziegler was making with respect to new 
transportation bill, the needs that have been identified by the 
transportation directors across the country is $78 billion a 
year. Now, can that be cut back somewhat? There's no doubt in 
my mind it's going to have to be, because the funding that's 
available is only $31 billion a year from the trust fund, 
leading a--leaving a $47-billion-a-year hole. That is a big 
hole.
    But, I don't think there's any way to cut from a projected 
need of 78 billion a year back to the funding source that 
currently exists, of 31 billion, and not do significant damage 
to the quality of our transportation systems across the 
country.
    Francis, let me just go back to you first. Let me ask you 
for your professional assessment. If we had to cut 
transportation funding back to the amount of revenue that is 
provided by the trust fund--in other words, cut back from the 
78 billion a year, that your group has determined is the need, 
to $31 billion, which is the amount of the funding source--
what, in your professional judgment, would be the effect on the 
transportation systems across the country and here in North 
Dakota?
    Mr. Ziegler. Mr. Chairman, if we have to cut back to that 
point, our program here in North Dakota--we've looked at it 
very closely--will be cut in half, and that seriously affects 
what you heard here from the rest of the panelists, about the 
needs for transportation. It is going to cut back on what we 
can do, and it's ultimately going to create a system that is 
flawed.
    I think I testified to you once before, Mr. Chairman, that, 
you know, it's not far from saying that we could go back to a 
Third World country if we don't get a transportation system 
that is good and strong.
    Here in the eastern part of the State, we have worked hard 
to make sure that Highway 13 is in good shape. It has a thicker 
pavement section. But, if you look at some of our pavement 
sections that are thin, it doesn't take many loads--truckloads 
to break it up--very seriously break it up. And so, it's not 
far--certainly, I can say to you, without a shadow of doubt, 
that, if we don't get some funding, our system's going to 
deteriorate significantly.
    The Chairman. So--and, in your professional judgment, if we 
had to cut back to the level of funding provided by the trust 
fund, we would see significant deterioration in the 
transportation system of North Dakota.
    Mr. Ziegler. That is correct, Mr. Chairman.
    The Chairman. Jim, before the hearing began--Mayor 
Sturdevant--I see you so often, I feel I can call you ``Jim.''
    [Laughter.]
    Mr. Sturdevant. That's just fine, Chairman Conrad.
    The Chairman. --that--your comment to me is that 13 is in 
good shape now. I think, all of us who travel over it--you 
know, I've just traveled over it in the last 12 hours--is in 
good shape, and I think that's certainly an assessment all of 
us would share.
    The director of transportation has told us, if we had to 
cut back to the funding level provided by the trust fund, we'd 
see significant deterioration. In your judgment--you're a local 
leader--what would be the effect if we saw significant 
deterioration in Highway 13?
    Mr. Sturdevant. Well, maybe what I can do is point to our 
Dakota Avenue, which is part of Highway 13; it's the mile that 
runs downtown, our main corridor, in the city of Wahpeton. We 
have been waiting for--we were waiting, and it was on the 
drawing board for--I don't know, a number of years, probably 6 
or 8 years, or maybe even longer--to redo that--our Dakota 
Avenue. And, it was an asphalt- based road. And we have a lot 
of grain trucks that use that routing to go over to the 
elevators in Minnesota. We can't get them out on the bypass, so 
they go downtown through our main district. And we've seen a 
lot of deterioration, over the last 5 or 6 years, of that road. 
And I believe that road was our--Dakota Avenue, Highway 13, was 
about 35-40 years old before we started working on it this 
summer. So, that's one good example of what happens to highways 
that aren't maintained and not rebuilt.
    Now, this year, we are putting concrete down, and we're 
spending a few extra dollars--city of Wahpeton's money also--to 
put concrete down, rather than asphalt, that'll give us a good 
solid highway.
    The Chairman. Well, it's a very important point.
    Dan, what would the--what would be the implications for 
your company if there was significant deterioration as a result 
of having to cut back, by 50 percent or more, on the highway 
program here in the State?
    Mr. Antrium. Well, there--it'd probably be, Mr. Chairman, 
in two areas. One is around our commuting of our employees to 
work. As you know, because of the rural local of Gwinner, we 
have a significant number of employees that commute to work 
fairly long distances. So, obviously the safety of their 
commute is very important to us, especially during the winter 
months. So, keeping that road clear, being able to keep it 
clear, with our local and State agencies, is very important to 
us. So, you know, the safety of our employees is obviously 
paramount to be able to travel on that highway, especially 
during the winter months.
    The other key part is the delivery of our product, 
especially of our inbound shipments of product to our plant. We 
have daily schedules of product that we rely on, almost down to 
the hour, for our production lines in our facility. And if 
those shipments are delayed, literally by more than an hour or 
two, for whatever reason, we can see some dramatic impacts to 
our production lines in that facility--whether it's because of 
holdups on the highway or, you know, excessive traffic in 
certain areas of the highway, so forth.
    I mean, I've driven on that road for close to 20 years, to 
and from Gwinner, and it's been through, I believe, two major 
upgrades during that time. And I agree with Mayor Sturdevant's 
assessment, that it's in very good shape, it's a very good 
roadway today; but, during those times where we did have 
those--you know, where we got to the point where we had to do 
those upgrades, we did see delays in our shipments of product 
coming in, and it did affect our production in our Gwinner 
facility.
    The Chairman. You know, one of the things that was striking 
when I was at your plant yesterday--of course, it's really 
quite remarkable, what's going on there, because they are 
completely putting out, over a 3-year period, as I understand 
it, all new products.
    Mr. Antrium. Yup.
    The Chairman. And they're about halfway through that 
process. And the timing of all of this--we--you were talking 
yesterday to me about the outbound shipments, how you like to 
hold things there to built the right size loads, so things are 
held a day or two so that you right size the loads to make them 
as efficient as possible. Isn't that--
    Mr. Antrium. Yup.
    The Chairman. --the case?
    Mr. Antrium. That's correct--
    The Chairman. So--
    Mr. Antrium. --Mr. Chairman.
    The Chairman. --the timing of inbound shipments, so that 
you are in adjusted time schedule, so that you're not wasting a 
lot of money holding inventory that's not being productively 
turned--
    Mr. Antrium. That's correct.
    The Chairman. --I assume, is important to the overall 
profitability of the company.
    Mr. Antrium. That's exactly right. That's--my second point 
is around the supplies from our--70 percent of our inbound 
product comes from--through Highway 13, from the east. And we 
rely on, literally, daily shipments of that product, in some 
cases, and certain intervals during the day. And, you know, 
the--so, that's why that--keeping the flow of that product on 
that roadway is very important.
    The Chairman. Patrick, I go to your point again. You know, 
these numbers--26,000 loads of corn. And your corn production 
in Richland County has increased by over 60 percent in the last 
10 years. So, we see those load numbers going up. Do you 
anticipate that that is going to continue?
    Mr. Pithey. Well, I think the production capabilities 
certainly has an upside. As for our plant, at this stage we're 
finite in inbound, because of our production capability. But, 
the ProGold plant was always built with a potential for 
expansion. And so, again, we'd continue to want to go down the 
path of looking to expand that. So, yes, we do see that--
    The Chairman. And, you know, Patrick, let me ask you what I 
asked Dan, because--if we had to have a 50-percent cut in 
transportation funding here in North Dakota, from what the 
projected needs are, according to the Department of 
Transportation, what would the implications be for your 
company?
    Mr. Pithey. I think the first--primary impact would be to 
our customers, or the growers, as far as an outlet and a market 
for their corn. The--as a first purchaser, that would impact 
their decision. If the transportation does not allow them to 
safely and efficiently get their product to market, they would 
then have to look to a secondary--I don't mean any disrespect 
to any other buyers--but, obviously having an option no longer 
available will definitely be an impact to the supplier/grower.
    Secondly, from a customer output standpoint, we have 
trouble, again, safely and efficiently getting product out of 
the plant to market. Both of those are really ultimate net cost 
to both the supplier/grower, for having a lack of market 
accessibility, and to the end consumer. If you no longer have a 
primary transportation route and have to look at secondary 
choices, secondary choices usually tend to be more costly.
    The Chairman. Okay. I think a final element here--Francis, 
I should come back to you--on the question of, What is the 
share of Federal funding for our transportation program here in 
the State? Can you give us that percentage?
    Mr. Ziegler. Mr. Chairman, the current biennium budget for 
the North Dakota Department of Transportation is $1.35 billion. 
The Federal aid, when we include the ARRA funding, is--
    The Chairman. That'd be the Recovery Act--
    Mr. Ziegler. --the Recovery Act funding--that is 57 percent 
of our total budget of 1.35 billion.
    The Chairman. And is--are ER funds included in that 
calculation?
    Mr. Ziegler. Mr. Chairman, not all of them. We anticipated 
some of the ER for Devils Lake, but we've gotten additional ER 
for the 2010 event. And so, we're going to be putting those 
numbers into our next biennium's budget.
    The Chairman. Okay. Can you--
    Mr. Ziegler. But, I can--Mr. Chairman, I can tell you that 
we had $80 million of ER funds in that $1.35 billion.
    The Chairman. Okay. So, roughly, we're talking--60 percent 
is Federal money that is in our program at this point?
    Mr. Ziegler. That's correct.
    The Chairman. Sixty percent Federal money. So, if the 
Federal share got cut back as dramatically as would be 
necessary to meet the funding source, that would lead to the 
kind of reductions in the overall State program that you 
testified to.
    Mr. Ziegler. Mr. Chairman, that is correct.
    The Chairman. And what you said, just again for the record, 
is, we'd be talking of a--somewhere--about a 50-percent cut in 
the transportation program in this State if we were to cut back 
to the current funding level.
    Mr. Ziegler. That is correct, Mr. Chairman.
    The Chairman. All right. One other thing I should indicate 
is, Jane Priebe, the director of Wahpeton Area Economic 
Development, is with us.
    Welcome. Good to have you here, as well.
    And are there any other things that any member of the panel 
would like to get on the record before we close the hearing?
    Mr. Ziegler. Mr. Chairman, I just want to thank you for 
your interest in transportation. As you know, I'm obviously 
very pro-transportation, and one of the things that--one of the 
examples that I've used in previous hearings is that 
transportation is a good buy. We did a study on national costs 
of those things that we use every day. And we all have cell 
phones. I have two cell phones strapped on me. And the average 
household pays $500 a year for cell phone use. But, we pay $109 
for transportation. That's in every household in America.
    So, it's interesting, when you look at some of the-- you 
know, I guess it's setting our priorities in our own lives. 
But, basically, my point here is that transportation is a good 
buy.
    The Chairman. Well, it is a good buy, and it's a critically 
important buy. I think the testimony here today is as clear as 
it can be with respect to the economic strength of our State, 
the ability of our companies to compete. If we don't have an 
excellent transportation system, we're going to have a hard 
time being competitive.
    It's also an important matter with respect to jobs, 
because--For every billion dollars, Francis, what is the 
estimate of the number of jobs created by every billion dollars 
of transportation expenditure?
    Mr. Ziegler. Mr. Chairman, the latest estimate from the 
Federal Highway Administration--it's 28,900 jobs that are 
created for every billion dollars of transportation funding 
that is put out there.
    The Chairman. So, you know, we put that in perspective. 
Every billion dollars of transportation funding--28,900 jobs. 
And those are jobs here in America. These are not jobs that are 
in some other country, these are jobs that are here.
    And it also--it's always struck me as giving us a double 
boost, because not only is it creating jobs here in this 
country, but it is also strengthening the competitive position 
of America, because if you have a strong transportation 
network, that improves the competitive ability of all of our 
businesses, our companies, and of our country as a whole, so 
there is a double benefit, not only of jobs, but of improving 
the economic efficiency of our country.
    And I think that is clear from the testimony here today. 
And I want to thank the witnesses very much for your 
participation.
    Again, any final thoughts that any witness would like to 
make?
    [No response.]
    The Chairman. If not, before we close the hearing, I'd like 
to--we've got a few minutes remaining; I think we're very close 
to the time that we were supposed to conclude--but, if there's 
any person in the audience who would like to testify, if you'd 
stand and give your name and say whatever you would want to say 
on this subject, you are welcome to do so at this point.
    Mr. Miller. Thank you, Senator.
    The Chairman. Perry?
    Mr. Miller. I'm Perry Miller, a Richland County 
commissioner. And our highway engineer officials have just 
completed our budget hearings for this year. And this is the 
one issue that--. We have roads in the county that are--
probably could be deemed unsafe to travel. --every other county 
and State--for more money, and, you know, the situation 
there--. But,--a lot of it was driven by the weather conditions 
that we've had, and the high water tables--the road--area, and 
the--just the--of the ground is just--. And--same thing in 
the--. And--
    But, the question I have is--it seems obvious to me--none 
of us like to pay more taxes, but a gas tax, to me, is really a 
simple solution is--as long as--funding and not be spent on 
some other project. And I'm just amazed that we can't get that 
done in Washington. I know that people have tried, but it goes 
back to politics.
    And if you could maybe comment on that a little bit--. To 
me, it's the most efficient way of doing it. And it just 
doesn't seem to--
    The Chairman. You know, you can imagine, any tax increase 
has enormous resistance. Gas tax increase, after what happened 
to fuel prices, when oil prices ran up to more than $100 a 
barrel, I can tell you there was no appetite for increasing gas 
taxes.
    And we have the additional problem of, as we go forward, 
gas tax is less and less connected to transportation usage. 
That's our fundamental problem. You know what's happening. 
We're moving to cars and vehicles that don't use gasoline. So, 
we've got a disconnect, here.
    You know, Chevrolet has just announced their Volt, an 
electric car, can go 40 miles without using any gasoline. But, 
of course, it puts a burden on the roads. So, our--is somebody 
who own a Volt not going to contribute at all to transportation 
funding? That doesn't seem fair.
    We have other considerations like that as we see the 
fundamentals of our transportation change. And so, relying 
solely on the gas tax, going forward, is not going to work. The 
trust fund is throwing off--producing about $31 billion of 
income. We've heard the testimony, here this morning, that the 
need, according to the transportation officials across the 
country--and this is their considered judgment--is $78 billion 
a year. That is a huge gap. And, of course, as chairman of the 
Budget Committee, I'm--they look to me to--Where is this money 
going to come from? And it's one reason I'm doing these 
hearings, to get a very clear assessment of what the need is. 
And, of course, it needs to translate to North Dakota, as well. 
I've got a responsibility to my colleagues with respect to the 
budget for the country. I also have a responsibility to my 
constituents here with respect to how we fund needs that have 
been clearly described by panels across the State, including 
the one here this morning. So, it's fair to say this is a real 
challenge.
    Thank you for your observation, Perry.
    And I--one thing I should also emphasize is, Director 
Ziegler and his team have a very tough challenge because of 
these weather conditions. You heard his testimony with respect 
to the Devils Lake Basin. Twenty- two places, I think the 
testimony was, where we've got water encroachment on roads that 
are going to have to be dealt with, some places where the water 
is over the road. And it doesn't have to be over the road for 
it to have a big negative impact. You've seen it here in 
Richland County. These overly wet conditions create a real 
problem for the roadbeds. And then, when we put heavy loads on 
'em in the spring, and when that ground is mushy, it does a lot 
of damage, as the Director testified here today.
    Again, any final thoughts, anybody?
    [No response.]
    The Chairman. If not, we'll close the hearing. I want to, 
again, thank you everybody for being here, and especially thank 
our witnesses.
    [Whereupon, at 10:10 a.m., the hearing was adjourned.]


FIELD HEARING: TRANSPORTATION INFRASTRUCTURE'S ROLE IN ECONOMIC GROWTH: 
                            US 12 AND US 85

                              ----------                              


                        TUESDAY, AUGUST 24, 2010


                                       U.S. Senate,
                                    Committee on the Budget
                                               Bowman, North Dakota

    The committee met, pursuant to notice, at 1:05 p.m. in the 
Bowman City Hall, 101 1st Street, NE, Bowman, ND 58623, Hon. 
Kent Conrad, chairman of the committee, presiding.
    Present: Senator Conrad.
    [presiding].

              OPENING STATEMENT OF SENATOR CONRAD

    The Chairman. The hearing will come to order. I want to 
welcome everyone to this hearing today in Bowman.
    This is a hearing of the Senate Budget Committee. It is an 
official hearing of the committee and so we will follow the 
Rules of the U.S. Senate in conducting it. An official record 
is being kept.
    The title of this hearing is Transportation Infrastructure: 
The Role in Economic Growth, US 12 and US 85.
    We'll be focusing on what investments may be needed to 
upgrade and improve Highways 12 and 85 to promote the economy 
in North Dakota and specifically in this region. I also want to 
focus on how we can make these roadways more safe.
    I want to begin by welcoming our distinguished witnesses 
today. Our Director of North Dakota Department of 
Transportation Francis Ziegler, who we have especially high 
regard for, one of the best transportation directors in the 
country; Bowman Mayor Lyn James, who was with us yesterday in 
Williston, as well, as we hosted the Secretary of Housing and 
Urban Development for the United States in that community; and 
Cal Klewin, the Executive Director of the Theodore Roosevelt 
Expressway, always good to see you, Cal, as well.
    I look forward to hearing from each of you. I'll share your 
concerns and ideas with my colleagues in Washington.
    This map shows why Highways 12 and 85 are so important to 
North Dakota's economy, particularly its energy production. 
Highway 85 is the main north-south link, all of us know that, 
connecting the gas plants and the oil fields in the Williston 
Basin. And Highway 12 provides an important east-west 
connection to Highway 85 in this corner of North Dakota. The 
agriculture industry is also a very heavy user of these roads 
as are tourism and we see tourism being an important part of 
the economy in this part of our state, as well.

[GRAPHIC] [TIFF OMITTED] T8154.424


    Unfortunately, these roadways, like many of our nation's 
highways, are in need of improvements. Heavy truckloads, much 
of it from trucks traveling the oil boom in the Bakken 
Formation, have put added strains on the roadways and, of 
course, now we've got to add the Three Forks Formation to the 
Bakken Formation.
    The roads need further investments to foster continued 
growth and to ensure safe travel of area residents and tourists 
and others who are using them.
    This is a recent article in Bismarck Tribune. The title is 
Bowman Grapples With Heavy Truck Traffic: Safety Concerns in 
Residential Neighborhood. The article talks about the recent 
special meeting held here to discuss the traffic problem. I'd 
like to hear from Mayor James about the findings from that 
meeting and make that a part of the record of this hearing, as 
well.

[GRAPHIC] [TIFF OMITTED] T8154.425


    According to North Dakota's Department of Transportation, 
truck traffic on Highway 85 increased nearly 26 percent between 
2005 and 2009. The highway was simply not designed to handle 
the increasing number of heavy trucks and oversized loads 
currently traveling it.
    Now is an important time to focus on our transportation 
needs because we're about to write a new transportation bill. I 
anticipate that that will be done next year.

[GRAPHIC] [TIFF OMITTED] T8154.426


    In the last bill, I served as a conferee. Conferees are 
selected to work out the differences between legislation that's 
come out of the U.S. Senate and legislation that's come out of 
the House.
    As Chairman of the Budget Committee, as a senior member of 
the Finance Committee, I was asked to serve on that Conference 
Committee and have been advised that I will be asked to serve 
on the next Conference Committee, as well.
    In that bill, I was able to secure a billion and a half 
dollars for North Dakota, a 31 percent increase. That included 
13 million to make improvements to Highway 12 from Bowman to 
Hettinger, and annually the total average is out to 234 million 
a year for highways, bridges, and the rest, with additional 
funding for transit.

[GRAPHIC] [TIFF OMITTED] T8154.352


    We did very well overall getting $2 for every dollar we 
send Washington in gas tax money, ranking us among the top four 
states in the Nation for return on gas tax dollars.
    We also secured roughly a $180 million in Recovery Act 
money over and above the Highway Bill. That Recovery money is 
being deployed over this year and last.
    Francis Ziegler, our Head of the Department of 
Transportation, no doubt will be able to give us further detail 
on that.
    In addition, we have been able to secure certain ER funds, 
Economic Recovery funds, Emergency funds, that have been used, 
as well as especially in the Devils Lake area, where we see 
such extraordinary demands being made.
    We also worked hard to have Highway 85 designated as a 
high-priority corridor. That designation means Highway 85 is 
eligible for Special Corridor funding and I think that's going 
to be increasingly important as we look ahead.
    These are some of the priorities I will focus on in the 
next Highway Bill. We must identify sufficient funding so the 
infrastructure investments are secure and robust over the long 
term. States and communities must be able to rely on them. Any 
new highway bill must maintain recognition that rural 
transportation needs are vital to the nation, and, finally, 
I'll fight to secure funding for longer-term investments in our 
nationally important corridors, like Highway 85.

[GRAPHIC] [TIFF OMITTED] T8154.353


    I'm particularly interested in hearing from our witnesses 
on the immediate investments that are needed in Highways 12 and 
85 and what future investments are needed to support the growth 
in the area and the safety of those who travel these roadways.
    With that, we'll turn to our witnesses and we know that 
time is short. I'm doing five counties today. So we've got to 
move quickly in order to reach all of our locations on time.
    Tim or Matt, maybe we could ask somebody to adjust the air 
conditioner. It's a little chilly in here, isn't it? Am I the 
only one?
    We'll go to Francis Ziegler. Welcome, Francis. I'm 
delighted that you are here. Francis Ziegler, our Director of 
Transportation, has been at every one of the hearings that we 
have held, and let me just specify why we're doing this.
    We have been told that in the next Highway Bill there will 
be no funding granted for special projects beyond formula 
funding, unless a hearing has been held to document the need. 
So if they hold to that position and nobody can predict what 
other committees might do, but this is what I have been advised 
of informally, if they hold to that position, it's critically 
important that we hold hearings like this and, Francis, I just 
want to express my public thanks to you for helping us meet 
that requirement.
    Director Ziegler.

STATEMENT OF FRANCIS ZIEGLER, DIRECTOR, NORTH DAKOTA DEPARTMENT 
                       OF TRANSPORTATION

    Mr. Ziegler. Good afternoon, Mr. Chairman. I'm Francis 
Ziegler, Director of the North Dakota Department of 
Transportation.
    I want to thank you again for the opportunity to appear 
before the committee today and thanks for your interest and 
support for improving transportation in North Dakota.
    As you know, transportation is vitally important to 
supporting our country's economic competitiveness. It's 
critical to moving freight, connecting manufacturers to 
retailers, farmers to markets, shippers to railroads, airports 
and seaports, and motorists to jobs, schools, and stores.
    This year, the Department of Transportation is investing 
$450 million on 2,000 miles of roadway. That money comes from 
the regular Federal aid, from ARRA, and from the Emergency 
Relief Fund and state funding. Our total budget----
    The Chairman. Francis, if I could just stop you on that 
point and just say you and I are very familiar with ARRA, but 
we probably just should say for the record that's the Recovery 
Act money.
    Mr. Ziegler. ARRA is the American Recovery and Reinvestment 
Act, oftentimes called Stimulus money.
    The department's total budget is $1.35 billion, of which 52 
percent is regular Federal aid. If the stimulus funding is put 
in there, it's at 57 percent of the current biennial budget, 
and if the ER is included, we're at just over 60 percent for 
the Federal aid that is part of this budget.
    The Chairman. Can I just say this is especially good news 
to me, Francis, because your numbers match ours?
    Mr. Ziegler. That's good. Today, as you said, Senator, I'd 
like to address the US 12 and 85 corridors and challenges that 
the North Dakota DOT is facing and the need for long-term 
transportation bill, as you've already talked about.
    In the interest of time, Senator, we have outlined for you 
some traffic counts and one of the things about traffic counts, 
your traffic count is absolutely right, and it was a point 
count that we had provided to you. What we try to do is try to 
get averages for the whole corridor so that when we're 
designing projects and getting ready for them, that we can know 
exactly what it is that we need to design for and so I'm 
sharing with you, on the bottom of Page 1 and top of Page 2, 
what some of those counts are and you're right. They are 
increasing significantly and so the department does have 
challenges. There's no doubt about it.
    But to improve the traffic flow, enhance safety, preserve 
the system, a variety of construction projects are going to be 
undertaken in the next few years. Attachment 1, which is the 
foldout in the back of the testimony, has all the projects 
shown and the color code. Some is major rehab. We're doing 
major rehab west of Bowman as we speak, minor rehab which 
includes seal coats and thin lift overlays, seal coat 
structures and municipal items, and so you can see the entire 
Highway 85 corridor has something going on, all the way from 
the state line to Williston, and Bowman----
    The Chairman. Francis, can I again just stop you on that 
point? I drove yesterday from Killdeer up to Williston for a 
meeting there and I can confirm that there is construction 
everywhere. I can also confirm these truck counts are really, 
really dramatic. I mean, we didn't even try 85 until we got up 
to Watford City. We went over on 22 because of all the work 
that's being done on 85.
    Mr. Ziegler. Thank you, Mr. Chairman. But you know how I 
say it, is that we love orange cones at DOT. It's a sign of 
progress.
    We have about 32 million worth of projects included and 
scheduled for Highway 12. There's major rehab, as I said, from 
Raymond to the Montana line and then overlays after that 
grading is finished. There are about $75 million in projects on 
Highway 85 and I have reported earlier 60 million on 65 but as 
we go down the road of designing the projects, they're getting 
more expensive. We're adding, we're lengthening the passing 
lanes on the Super 2 Concept between Watford City and 
Williston. So the prices are going up as we speak and 
inflation, as I've shared with you before, Mr. Chairman, 
inflation is about 8.7 percent per year since 2001. So our 
purchasing power's eroding as we speak.
    We have a lot of transportation system challenges. I met 
with Upper Great Plains and the public this past spring. We had 
eight regional meetings to get input from the public and 
basically the residents are looking for more transportation 
infrastructure across the state. They're concerned about 
increased traffic, especially in the oil impact areas in 
Western North Dakota.
    At the top of Page 3, we also have a lot more public 
expectations for load-carrying capacity, increased shoulder 
width, and passing lanes. We have received requests from groups 
now to four lane Highways 85, 281, 52, and 23, and so a lot of 
money needs to be invested to make all of those things happen 
for the future.
    But our most critical challenges to date are providing a 
transportation system to move commodities year-round. We have 
to do load restrictions in the spring and that gets to be very 
difficult and adds to cost of doing business there. In the 
second bullet, just to give you an example, if a farmer hauled 
a load of wheat from Hettinger to Gladstone, the cost normally 
if you went with the outload restrictions, it'd be about $300 
for that load, but if they have to make two trips, Upper Great 
Plains says it's 1.62 times more. So it costs $486 to move that 
load of wheat from Hettinger to the Gladstone plant to get it 
off to the markets and the rail.
    Other issues, of course, is adding grade raises in the 
Devils Lake area. You mentioned that already, but we also have 
the Prairie Pothole Region that has had a lot of rain this 
spring. We had 22 sites there where there's water either on the 
road or on the shoulder of the road. Four sites it was over the 
road and we're going to be working with Federal Highway 
Administration. That is $3.9 million to raise the grade where 
the water's over the road and another 24 million to raise the 
grades where the water's right up to the shoulder.
    Then we have, on Point 3 there, the aging of the state's 
transportation system. The department's had to move to 
preventive maintenance. Preventive maintenance is basically 
putting on two-two and a half-three inches of pavement over the 
top of what's there and what it does is it narrows the roadway 
and ultimately we lose the shoulder and so we're getting a lot 
of comments about that, that people are looking for more 
grading so that we can widen those shoulders again.
    The Chairman. I can just say to you I noticed that on 8. We 
were just in Mott and Hettinger before being here in Bowman and 
I was saying to the people that were with me, you can see this 
is what Francis has been talking about, right, where you--and, 
you know, you can see over time where that would become a 
growing concern because, in effect, you have a much sharper 
falloff to the shoulder.
    Mr. Ziegler. That is correct, Mr. Chairman.
    The Chairman. What do you call that? What's the term of 
art?
    Mr. Ziegler. The term of art is it's a pavement slough.
    The Chairman. Pavement slough.
    Mr. Ziegler. It's the slough of the pavement. It's not a 
term of art, but it's lack of shoulders.
    We're concerned about where we're headed with that and the 
public is concerned about the fact that we want the shoulders 
back again, to have a little bit of reprieve in case of flat 
tire, whatever.
    On Point 4, Funding, the most recent multiyear Federal 
transportation bill provided authorizations through September 
1909. Since then, Congress has passed a series of short-term 
extensions and that results in considerable uncertainty as we 
attempt to prepare ourselves as the Department of 
Transportation not only for Highway 85 and Highway 12 corridor 
construction but for all of the work that we do.
    So I guess what we're asking, Mr. Chairman, if there are 
going to be further short-term extensions, that they be at 
least a year to 18 months in length, so that the industry and 
the Department of Transportation can plan.
    On Page 4, Senator, in the interest of time, I'll just ad 
lib. There are four points there that the Department of 
Transportation in North Dakota and other rural states have 
concerns with on the Federal legislation that's there to 
reauthorize the Highway Transportation Programs.
    We know that that legislation's there. We also appreciate 
what you've done, Senator, yourself, Mr. Chairman, Senator Kurt 
Barrasso and 11 others that says that if the new legislation is 
going to dedicate a lot of funding to major metropolitan areas, 
that about 33 percent of it needs to be dedicated to rural 
states and so we really do appreciate that.
    Clearly, our----
    The Chairman. I think we got very good advice from your 
department on how we could do that.
    Mr. Ziegler. Well, clearly, our ability to continue to 
invest in surface transportation in North Dakota depends on 
Federal surface transportation funding.
    Our AASHTO or our Association of State Highway 
Transportation Officials has indicated that there's a need for 
$375 billion for roads and bridges and 93 for transit. 
Unfortunately, the Federal Highway Trust Fund has been 
declining and currently the revenues are about 31 billion a 
year but they're about 42 billion in expenditures and the 
reasons are, first of all, higher fuel taxes in 1908 resulted 
in increased use of mass transit.
    I read an article just this weekend and people aren't going 
back to their cars. They're using mass transit and so there's a 
downturn in the use there. The economic downturn has impacted 
highway travel. Travel actually declined a 108 million vehicle 
miles from 1907 to 1908.
    Increased overall fuel efficiency of vehicles. Although 
increased fuel efficiency has positive environmental impacts 
and reduces our dependence on foreign oil, it's a negative 
impact on motor fuel tax collections, and then, of course, on 
top of Page 4, the increased use of hybrid and electric 
vehicles.
    As you've said previously, Senator, and we recognize it, 
that the Chevy Volt that's going to be coming out this year, 
this fall, doesn't pay any gas taxes but it certainly depends 
on the same transportation system we're all using and so that's 
a concern for us, and if you look at the fuel economy of the 
vehicles going from 20 to 25, that's a 25 percent increase in 
the economy of the vehicle and obviously a corresponding 
decrease in the revenue to the Trust Fund.
    So those are some of the key reasons why the Trust Fund is 
reducing in value.
    The Chairman. Can I just stop you on that point, Francis, 
and indicate, as we've said in previous hearings but for the 
purposes of people who are here, what you and your fellow 
commissioners around the country and directors, transportation 
directors have determined is what's necessary in a 6-year 
highway bill is a level of funding at about $78 billion a year.
    What is available from the Trust Fund, as you have 
correctly stated in your testimony, is $31 billion a year. So 
there is a shortfall there of $47 billion a year. That is a 
chasm and, you know, the director has quite accurately pointed 
out some of the reasons the Trust Fund is not anywhere close to 
matching the need and, you know, you got higher vehicle miles. 
You have more people going mass transit. You have electric 
vehicles, for example the Chevy Volt. So those are things that 
we need to understand as we approach the next transportation 
bill.
    As I asked you in a previous hearing, and I would ask you 
again, Francis, for the record here, if we were required to cut 
back to the level of funding available from the Trust Fund, 
what would be the implication for transportation funding here 
in North Dakota?
    Mr. Ziegler. Mr. Chairman, the implication of the Trust 
Fund or the funding for North Dakota being based on $31 billion 
current revenues would cut our program about in half.
    The Chairman. So the funds for 85 and Highway 12 and all of 
the other high-priority corridors would be dramatically 
affected in a negative way obviously?
    Mr. Ziegler. Mr. Chairman, that is correct. What we'd have 
to do is reprioritize and take a look at our highest priorities 
and then go to work with the money that we have available.
    The Chairman. Director Ziegler, if I could just ask 
further, in your judgment, in your professional judgment, 
you've been at this a long time, you enjoy a high level of 
credibility both here in North Dakota and in Washington.
    I can tell you when you testify at a hearing like this, 
people in the Department of Transportation pay attention 
because you and your team have credibility.
    If we had to cut the program in half in North Dakota over 
the 6-years of the next transportation bill, what would that 
mean for communities across the state? What would it mean to 
the traveling public? What would it mean to our agriculture and 
energy industries? What would it mean to tourism? What would 
be--you know, sometimes when we say something's cut in half, 
what's the qualitative effect in your judgment? How would you 
characterize it?
    Mr. Ziegler. Mr. Chairman, the first thing the Department 
of Transportation does when we have a road that gets in trouble 
because we can't fund it is to put on load restrictions and 
I've already talked about that. We would have to put on more 
and more load restrictions to keep the trucks lighter.
    Second, what we're going to be encountering a whole lot 
more potholes.
    Mr. Chairman, you talked about the travel between Watford 
City and Williston that you took yesterday. Grant Levy, our 
Chief Engineer, is here and he had talked to Walt Peterson, our 
District Engineer at Williston, just this morning, and we had 
our materials folks look at that piece of road and it is 
deteriorating very quickly. Fifteen push-outs have happened in 
the last month.
    The Chairman. And can you tell the people and for the 
record what is a push-out?
    Mr. Ziegler. A push-out is where you start getting the 
pothole where, on the shoulder of the road, the loads are so 
heavy and so numerous that it starts pushing the pavement out 
toward the shoulder and once you have that type of failure, 
that means the entire structure is in trouble and we're looking 
now at what it is that we're going to have to do to maintain 
that.
    So if we don't get the funding that we need, those kinds of 
situations are going to get us in bigger trouble and ultimately 
a system that just isn't going to function.
    The Chairman. OK. Thank you.
    Mr. Ziegler. Mr. Chairman, as I've testified previously, 
our next highway reauthorization legislation should certainly 
provide a long-term balanced bill and funding that addresses 
rural as well as metropolitan needs, increase the overall size 
of the program to address the growing needs and counteract the 
impacts of inflation, provide for rural states, and funding for 
the entire Federal aid system, not just the National Highway 
System, allocate an entire percentage through formula rather 
than discretionary, maintain a funding ratio of 4:1 for roads 
and bridges compared to transit, and streamline the program to 
the extent possible, and as I've mentioned to you that we're 
working with Victor Mendez, who was the Director of Arizona. I 
got to know him personally. He's now the Administrator of the 
Federal Highway Administration. He's working on every day 
accounts initiative and so we're working with him on that to 
try to streamline the process and get our projects done 
quicker.
    And then, of course, provide some flexibility to rural 
states to pursue solutions that are practical, if livability, 
complete streets, and climate change issues are advanced. We 
certainly recognize those issues. We do those in urban areas. I 
think you're familiar with Memorial Bridge where we did a lot 
of work on bike trail. Right here in Bowman, North Dakota, we 
put a bike trail over the bridge or over the railroad, excuse 
me, along with the bridge and so we recognize those livability 
issues, but on rural highways, what we need, what we need on 
rural highways is just a lot of money to take care of the road 
itself.
    Mr. Chairman, that concludes my presentation or my 
testimony, and we feel, in conclusion, that it's essential for 
Congress to recognize the increased investment in highways and 
surface transportation in rural states is important and is in 
the national interests.
    This increased investment is important to all 50 states 
that deal with safely moving people.
    Thank you, Mr. Chairman.
    [The prepared statement of Mr. Ziegler follows:]

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    The Chairman. Thank you, and one other question, if I could 
before we go on to Mayor James, and that is a question I was 
asked in Mott earlier today, meeting with leaders from that 
county, adjoining cities and towns, was about the Enchanted 
Highway and great concern on the part that is in their county.
    That is, Stark County has been able to do some work on the 
Enchanted Highway. The area from New England--well, it's not in 
New England but going north in their county has--they just 
don't have the funds to address it and that is not a state 
road.
    Is there anything that is available in a circumstance like 
that where we have kind of a special circumstance? The 
Enchanted Highway obviously hasten a great deal of attention 
for tourism purposes, increasingly important with the energy 
activity which is only going to grow because of the Three Forks 
Formation, in addition to the Bakken.
    Is there anything available for a circumstance like that?
    Mr. Ziegler. Mr. Chairman, what the North Dakota Department 
of Transportation does is we share 25 percent of our Federal 
aid with cities and counties, local governments, and we will 
work with, certainly work with the county, if that's one of 
their priorities, to help address that issue.
    The Chairman. Yeah. They're very concerned. I think they 
have about 15 miles that's in their county. I think the rest is 
in Stark and Stark County has been able to address the 
situation on their side and it's clearly quite a concern to 
them.
    We had a number of county commissioners there, mayors 
there, and quite a number of them raised the concern.
    Mr. Ziegler. Well, we'll work with them, Mr. Chairman.
    The Chairman. All right. Next, we'll go to Mayor James. 
Thank you, Mayor James, for all the attention and leadership 
you've provided this community and it's really more broadly.
    I thought you did an excellent job in Williston yesterday--
--
    Ms. James. Thank you.
    The Chairman [continuing]. Expressing the needs on housing 
which we were focused on there.
    So please proceed with your testimony and thanks again for 
your leadership.

  STATEMENT OF LYN JAMES, PRESIDENT, CITY COMMISSION, CITY OF 
                      BOWMAN, NORTH DAKOTA

    Ms. James. Thank you. It's a pleasure. Good afternoon, and 
thank you for giving me the opportunity to speak about 
transportation and the role it plays in our economic growth 
here in Bowman.
    The city of Bowman takes pride in the fact that we serve as 
the business hub for Southwestern North Dakota, Northwestern 
South Dakota, and Southeastern Montana. Being located at the 
crossroads of Highways 12 and 85 has put us in a unique 
position. Many small communities struggle to maintain their 
existing businesses together with their population.
    Bowman has the privilege of enjoying the commerce and trade 
that come with the traffic that funnels through our community. 
Of course, population growth has been a benefit, as well.
    Commerce is a key component in the success of our 
community. The intersecting highways bring many different 
trades to and through Bowman. Agriculture-related traffic 
supports our grain elevator, seed buyers and sellers, chemical 
suppliers and water sales, fuel suppliers, farm implement 
dealers, truck and auto dealers, automotive part sales, 
livestock auction market, farm and ranch sales, veterinarian 
services, and feed sales.
    The energy traffic supports some of those same businesses, 
as I mentioned previously, as well as welding shops, engine 
repair, trucking, construction business and tire sales.
    Some of the energy traffic originates from the Bowman area 
with the various oil-related businesses located here.
    The tourism traffic supports our motels, restaurants, fuel 
and convenience stores sales, as well as many main street 
businesses. Motels, restaurants, and bars also collect 
hospitality and lodging taxes which assist in funding various 
tourism-related projects and local promotions.
    Of course, the dollars spent in all of these areas trickle 
down to the healthcare providers, grocery stores, banking, the 
retail trade on our main street, the lumber yards, and 
contractors, and the list, of course, goes on and on.
    A strong economy also is a key factor in the support of our 
churches and our civic organizations.
    Highway 12 sometimes is lost in the shuffle due to the hot 
topic of Highway 85. Presently, Highway 12 west of Bowman is 
the route taken to the oil field in Bowman County, carrying 
numerous vehicles every day. The Three Forks Formation extends 
into Eastern Bowman County and when exploration gravitates in 
that direction Highway 12 East of Bowman will bear that same 
burden.
    Not only will Bowman see more commerce due to future 
exploration but Scranton and Gas Point in Eastern Bowman County 
will see some activity, as well, I'm sure.
    Safety is also a very important issue and I know we've 
addressed that before, but I would like to just speak of that 
again. Its importance parallels the economics of this 
transportation issue. Many members of our community and the 
surrounding area travel Highway 12, as well as Highway 85, to 
work each and every day.
    The enhancements that are being done today, as well as the 
proposed enhancements that are being researched at this time, 
are of great importance to the safety and well-being of the 
people who drive it.
    Future funding is critical to the continued growth of 
Bowman County and all of Western North Dakota.
    Chairman Conrad, thank you and I commend you for the time 
and attention you are giving to the issue of transportation 
here in Bowman or in Western North Dakota.
    [The prepared statement of Ms. James follows:]

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    The Chairman. Thank you, Mayor James. I appreciate very 
much your participating today. It's very important to laying on 
the record the views of those who are elected representatives 
and it's been made clear to us by the authorizing committees 
that if we want to have credibility, if we can have the 
Director of Transportation and local elected officials testify 
and lay on to the record that they think these are priorities, 
that makes a difference to our colleagues when they consider 
the really tough choices that are going to have to be made.
    Cal, welcome. Good to have you here. Please proceed.
    Ms. James. Senator Conrad, before I give the mike to Cal, I 
just wanted to also mention that I have testimony that I have 
offered from Ashley Alderson who is our Economic Development 
Director.
    The Chairman. Great. Be happy to make that part of the 
record, as well.
    Ms. James. And it is here in print, as well, for you to 
review.
    The Chairman. Very good. Without objection, we'll make that 
part of the record, as well.
    [The information referred to follows:]
    The Chairman. Now, Cal, we've been debating whether we'd 
actually have you testify or not.
    Mr. Klewin. I can tell a story.
    The Chairman. OK. Welcome. It's always good to have you 
here.

STATEMENT OF CAL KLEWIN, EXECUTIVE DIRECTOR, THEODORE ROOSEVELT 
                     EXPRESSWAY ASSOCIATION

    Mr. Klewin. Thank you. I'm Cal Klewin, Executive Director 
of the Theodore Roosevelt Expressway, the Northern Leg of the 
Ports-to-Plains Alliance, which stretches through America's 
rural heartland, connecting North Dakota with the common north-
south corridor, reaching domestically across nine states, from 
Texas to Montana, and internationally to markets in Canada and 
Mexico.
    Senator Conrad, thank you for coming to Southwestern North 
Dakota and holding a hearing on 12 and 85. You've always been a 
champion for transportation and we do appreciate you coming out 
here.
    A safe, sound, and efficient transportation is the 
foundation of a vibrant rural economy. With efficient 
transportation, the costs of inputs to agriculture and the cost 
of living for inhabitants of rural areas decreases, the net 
price to producers and manufacturers increases, market access 
of competitiveness increases, and job opportunities are 
increased. Successful businesses and producers contribute to 
the quality of life and increased opportunities for a living.
    Nowhere is the need for efficient transportation more 
evident than in Southwestern North Dakota where our primary 
east-west corridor, US Highway 12, and our primary north-south 
corridor, US Highway 85, are both under significant stress that 
stifles regional economic growth.
    A bit of history. US 12 was recognized in the early years 
of the automobile to have potential to move people from the 
state of Washington to Massachusetts. This northern tier system 
was promoted by the Yellowstone Trail Association to provide 
access to Yellowstone Park, a growing tourist destination. In 
those days, a two-lane road was adequate.
    Today, US 12 still moves people to Yellowstone Park, but 
the region's economy is growing and much more diversified and a 
two-lane road is no longer adequate. As you know, Mr. Chairman, 
North Dakota, including the Southwestern area, is an exporting 
region. We produce more energy and commodities than we consume. 
We must have modern, safe, and efficient roads to move these 
commodities to the U.S. and world markets, accommodating 
visiting tourists and local traffic.
    Our region helps to feed America. The agriculture industry, 
with the diversity of barley, pulse crops, and livestock, has 
led the regional economy. It relies heavily on trucks that use 
Highways 12 and 85. For example, the livestock and grain 
industry of this region, from Billings, Montana, to Aberdeen, 
South Dakota, rely on US 12 for the delivery of product 
traveling to, from, and through North Dakota on US 12.
    US 12 provides service to grain terminals. Ninety- 5 
percent of the trucks are large semis hauling up to 900 bushels 
each of grain to Bowman and Scranton. Scranton, the second 
largest terminal to Gladstone located on 94, handled in excess 
of 10 million bushels of grain. These grain terminals load 
railroad unit trains for shipments to Minneapolis and the West 
Coast.
    Freight movements of grain to markets in Billings, Montana, 
and Minneapolis, Minnesota, move on a portion of US 12 and then 
link to the interstate system terminating at exporting 
terminals. These shipments are by large truck, including 
105,000 pounds of grain commodity.
    The Chairman. If I could just stop you there, Cal. I would 
just say when we were on 12 driving over here, we had four huge 
custom combiners come down the road. We had to actually get off 
the road, go over into the ditch to get out of their way 
because they filled up the entire road. They had four large 
custom combines and then large truck and some other vehicles.
    You know, we were wondering what are we going to do here 
because it's clear somebody's going to have to give way and it 
wasn't going to be them.
    Mr. Klewin. Well, I think that's how it's changed. I mean, 
now you've got those type of movements using pilot cars and, 
you know, there's stress on the roads.
    That last paragraph that I did read, in those movements 
from Aberdeen to Billings, those movements by semis and 
agriculture commodities, it's basically because maybe the 
elevators are full and can't get unit cars, so they have to 
move to those markets because the market conditions are right 
and that's the same way as I'll point out to you later in the 
oil and gas. They'll move where the money is. So that's the 
part of that last paragraph we wanted to stress.
    Our region also helps to power America. The oil and gas 
industry also places significant demands on the local highway 
system, including Highways 12 and 85. Bowman County, until 
recently, was the Number 1 oil and gas- producing county in the 
state of North Dakota.
    With the new development of Bakken play in Northwestern 
North Dakota, it became Number 2 behind Montreal County. The 
production of oil and gas in the Cedar Hills, Marmarth, 
Badlands, and Little Beaver fields in Bowman County is served 
by US 12. They're all west of here. They're located south of US 
12. That's where the major production is in Bowman County. They 
connect the township and county roads that are also stressed.
    Delivery of the oil and gas production often moves by truck 
when pipelines are inadequate or market conditions are of a 
probable nature to move product north and south along US 85 and 
east and west along US 12 to pipelines in Guernsey, Wyoming, or 
north moving on US 12, then on to US 85 to Enbridge in Williams 
County.
    The exploration and production of oil and gas in Western 
North Dakota continues at increased record levels. This will 
increase the demands of surface transportation in this region.
    Each new oil well requires 1,250 trucks with 10 wheels or 
more from the beginning of the process until the well is put 
into production. With over a hundred drilling site operations, 
and I did this a week or two ago, I believe it was a 142 
drilling rigs in the state of North Dakota today, is that 
correct?
    The Chairman. Yeah.
    Mr. Klewin. So it increased so significantly and so fast 
that it puts almost a 125,000 large and often oversized trucks 
on our two-lane highways on a monthly basis and this does not 
count the increased traffic associated with servicing the wells 
already in production or hauling oil to the pipeline locations.
    The coal industry relies on surface transportation as well 
and is placing significant demands on Highways 12 and 85. 
Surface transportation along the eastern portion of US 12 in 
Bowman County serves the lignite coal industry with huge 
deposits available for energy development as the technology for 
clean coal becomes available.
    American Colloid located on US 12 at Gascoyne also ships by 
truck. Many of their products, such as drilling mud, component 
products used for fertilizer from the plant located along 
Highway 12, are shipped along the US 12 route.
    An industrial rail loop also located along US 12 receives 
pips and support equipment for various pipeline projects 
developing in the region. It is shipped by rail to the Gascoyne 
site, then disbursed to the constructionsite by truck by way of 
US 12 and other connecting routes. You may have seen that as 
you passed Gascoyne, saw the pipe.
    The Chairman. Yeah. I sure did.
    Mr. Klewin. That's the railroad I'm referring to and that 
transportation all goes on Highway 12 and then to the 
locations.
    In local distributing in Bowman, for example, Colorado 
Tubular is a company that relocated here from Colorado, 
expanded here, just off US Highway 12, west of Bowman. The pipe 
inventory is shipped into Bowman from the distribution yards 
located in Texas, Oklahoma, Wyoming, and Nebraska.
    Colorado Tubular has received a 135 truckloads of pipe rod 
and tubing during the month of July 2010 in the Bowman yard. 
The route to Bowman was west on US 85 and US 12. Keep in mind 
these trucks did have to return to the place of origin, most 
likely using the same routes.
    In July 2010, Colorado Tubular moved 97 shipments of pipe 
in the Williston Basin to locations south, west, and north 
using both 12 and 85.
    Wind energy is another truck-intensive industry impacting 
Highways 12 and 85. Wind industry has been expanding into 
Western Bowman County with the 19.5 megawatts of wind energy at 
Cedar Hill. I need to make a correction to my testimony. Cedar 
Hill was developed by Montana Dakota Utilities and I have that 
on the next boiler point. So that particular expansion or that 
wind energy was developed by Montana Dakota Utilities.
    The Chairman. At Cedar Hill?
    Mr. Klewin. Yes.
    The Chairman. OK.
    Mr. Klewin. Another proposed wind project, Diamond Willow, 
will be located in Eastern Montana and will be served by US 
Highway 12.
    It takes approximately eight oversized trucks per tower to 
haul the major components of each wind tower, not including the 
rebar, concrete, road materials, water, crane, and electrical 
components. North Dakota's growth, due to its wind potential, 
will lead to ever-increasing stress for platforms, substations, 
and transmission systems.
    North Dakota is currently Number 10 in wind energy 
development and has the potential to be Number 1 in the nation. 
This potential development will put additional stress on an 
already-antiquated and stressed highway system.
    And, finally, tourism. Two popular national attractions, 
Mount Rushmore to the south and Theodore Roosevelt National 
Park to the north, are both located on the Theodore Roosevelt 
Expressway and connected to the east and west by US 12.
    Unfortunately, US 12 and 85 are narrow two-lane highways 
and were never designed for these loads and this kind of 
traffic. They are simply not adequate to carry the existing 
traffic along with trucks carrying freight through the region, 
trucks carrying food to our major cities, vehicles carrying 
tourists, and vehicles carrying our citizens to their jobs, 
healthcare, and schools. It is in this mix of vehicles and 
patterns of movement that increases our accident rates so 
significantly.
    If our economy is to continue to grow, these inadequate 
roads must be upgraded to modern four-lane highways capable of 
safely serving local, regional, and national needs. The new 
Federal transportation bill must provide the policies and 
resources to make this a reality, not only in this region but 
in other rural areas across America, as well.
    The sanctity and integrity of the Federal Highway Trust 
Fund be preserved and the Trust Fund must have adequate 
resources to meet the needs of rural areas as well as large 
metropolitan areas.
    It is also imperative that the transportation bill, as well 
as any climate change legislation Congress might enact, 
recognize that rural areas are different than major 
metropolitan areas and that additional highway capacity in 
rural America is critical if these areas are to be a part of 
the national and global economies.
    Senator Conrad, this concludes my testimony, but thank you 
for this opportunity to testify. Working together as North 
Dakotans and as Americans, we hope we can improve the surface 
transportation in this region and North Dakota can compete 
economically in a changing world economy.
    [The prepared statement of Mr. Klewin follows:]

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    The Chairman. Thank you, Cal. Thank you not only for your 
testimony but especially my thanks for your leadership over the 
years on developing this corridor. This is important certainly 
to our state, certainly to these communities, but I really 
believe it's important to the country, as well.
    If we do map, as you have done, and show where the major 
agricultural production of America is, where the major energy 
production of America is, it's right on this corridor and 
that's something we have to continue to educate our colleagues 
about because it is going to take a significantly increased 
investment if we're going to do everything we could do to help 
our country reduce its dependence on foreign energy and develop 
the agricultural potential we have as well as our wind energy 
potential which you quite rightly indicate we're Number 10 now 
in actual production but we're Number 1 in potential.
    So I think, as you have done, anybody that examines this 
closely, it just jumps out at you the need for additional 
investment here.
    Let me go back to, if I could, for a moment to the 
Director, Director Ziegler.
    When we say there the Trust Fund is producing $31 billion a 
year, that's based on a gas tax at what level?
    Mr. Ziegler. Mr. Chairman, that is based on a Federal gas 
tax of 18.4 cents per gallon.
    The Chairman. So 18.4 cents is producing $31 billion a year 
in revenue. To get to the level of funding that you and your 
colleagues have determined is important, which is $78 billion, 
that's roughly two and a half times, if my math is right, 
roughly two and a half times what the current Trust Fund is 
producing. Is that your understanding?
    Mr. Ziegler. Mr. Chairman, that is correct.
    The Chairman. So if we did it all on gas tax, and I'm not 
suggesting we do, and I know you're not suggesting that we do, 
two and a half times 18.4 cents would be 36 and 9, 45 cents, 
about 46 cents a gallon, something like that, am I right?
    Mr. Ziegler. [Confirmed by Nodding.]
    The Chairman. So 46 cents a gallon, if it was all to be 
done on gas tax--now again I want to emphasize I don't favor 
that. Director Ziegler is not testifying supporting that. 
That's not the point here.
    I'm trying to put in perspective, if it was all to be done 
on gas tax where we'd have to go. It really doesn't make sense 
to do it all on gas tax for the reasons the Director's 
outlined. The gas tax is increasingly disconnected from the 
need and it's increasingly disconnected from the cost of the 
cost.
    Why do I say that? Because of all the reasons Director 
Ziegler gave. When you increase the mileage of automobiles, 
when you're increasingly going to have vehicles that don't use 
gasoline at all, the Chevy Volt for 40 miles is going to pay 
nothing in gas tax, nothing. Most commutes in the country are 
less than 40 miles, are they not, Director Ziegler?
    Mr. Ziegler. Mr. Chairman, we heard the General Motors 
President actually speak to that. The Chevy Volt was designed 
with the idea in mind that the average worker travels 30 miles 
to and from a job. That's why they went with 40 to be sure they 
got there and back, so they could plug it back in.
    The Chairman. Well, that really goes right to the point. So 
we've got a reality that is increasingly disconnected from the 
funding source, the reality of the need increasingly 
disconnected from the funding source.
    Director Ziegler, can you review what your organization, 
who are the Directors of Transportation around the country, 
have talked about in terms of alternatives to using the gas tax 
as the sole provider of revenue?
    Mr. Ziegler. Yes, I can, Mr. Chairman. The SafetyLou, the 
bill that expired September 30th, 2009, required that a 
commission for transportation policy and funding be set up. 
That commission went around the country, I believe they had 
four or five hearings. I testified on one of those hearings, 
the one in Minneapolis, April 2007, and what their conclusion 
was that there isn't one particular revenue source that can or 
should be used.
    Mr. Chairman, as you indicated, the gas tax, we already 
recognize the fact that we're going to get more fuel efficiency 
out of vehicles, more electric vehicles. So they talked a lot 
about gas tax was one, even though it's decreasing. They talked 
about VMT, which is Vehicle Miles Traveled, and so there's two 
states, Oregon and Minnesota. Oregon has completed their pilot 
study on VMT.
    What that means is that there's something on the vehicle 
that records and at every fill, gasoline fill you record as to 
how many miles you traveled and you pay taxes accordingly. So 
that's another----
    The Chairman. So this would be--just help me understand 
because I remember from a previous hearing you testifying on 
this vehicle mile travel concept.
    There would be something in your vehicle that would keep 
track of how many miles you've gone and you would pay based on 
vehicle miles, not on--you wouldn't be paying gas tax the way 
we do now?
    Mr. Ziegler. That is correct.
    The Chairman. Or maybe it'd be some combination?
    Mr. Ziegler. It could be a combination, Mr. Chairman, but 
that is the idea. There's a tracking device on the vehicle that 
says how many miles you've traveled.
    The Chairman. OK.
    Mr. Ziegler. Then there are others. Public/private 
partnerships and those the Secretary, current Secretary of 
Transportation is also talking about those. Mr. Chairman, the 
State of North Dakota is doing public/public partnerships.
    Cities of Fargo and West Fargo helped us build the last 
interchange that was built on 9th Street in between Fargo and 
West Fargo. Fargo, the city of, is also helping the Department 
of Transportation pay for the added lane on I-94. So that's a 
significant public/public partnership that we have with Fargo 
and West Fargo.
    All the urban areas that we've built, whether it's at 
Wahpeton, whether it's at Bowman, there is local participation 
up to the amount of 20 percent, but those communities and those 
public/public partnerships and the public/private partnerships 
that the Secretary of Transportation's talking about would have 
more investment from the private sector.
    The Chairman. If we were looking at--one of the things 
that's been recommended is toll roads and when I was in Mott 
earlier today, they told me on the Enchanted Highway, for 
example, that somebody had recommended to them toll roads. 
Well, you know, that doesn't work out here for lots of reasons, 
but, Director Ziegler, can you tell us why? Tolls have been 
analyzed here, right?
    Mr. Ziegler. Mr. Chairman, that was about the fourth or 
fifth item that the commission talked about, was toll roads, 
and here in North Dakota we don't have enough traffic to 
support the system with toll roads alone, and kind of 
facetiously, Mr. Chairman, I made the statement that if we 
started tolling our roads, our section lines would get pretty 
heavy use.
    But the fact is that we don't have enough vehicles to pay 
for the roads.
    The Chairman. And is there a rule of thumb, Director 
Ziegler, with respect to, on this issue of toll roads, at what 
level of traffic you have to have to make that a practical 
alternative?
    Mr. Ziegler. Mr. Chairman, what our department has studied 
is what it takes just to maintain our system. When we finished 
with our last budget, we analyzed what it's going to cost us to 
just maintain it. Those are the orange trucks, the materials 
that they use, and that does not include the investment in the 
infrastructure, but it takes 2,700 vehicles a day to make that 
happen.
    The Chairman. 2,700 vehicles a day just to--that's the gas 
tax return on those vehicles----
    Mr. Ziegler. That is correct.
    The Chairman [continuing]. Just to do the maintenance.
    Mr. Ziegler. Just to do the maintenance.
    The Chairman. One other thing I should have to enter the 
record is the rule of thumb with respect to four-laning.
    I know there are rules of thumb for this in transportation 
circles. Can you help us understand what is the rule, the basic 
rule of thumb to justify four-laning, the level of traffic?
    Mr. Ziegler. Mr. Chairman, different states have different 
rules of thumb and I know that South Dakota is at 6,000 
vehicles a day. Our neighbors south, South Dakota, I talked to 
their director recently, they're at 10,000 vehicles a day. 
Minnesota's at 12,000 vehicles a day. Our AASHTO, our 
Association, studies those types of things and they recommend 
between 4 and 12,000 vehicles. You take a look at Super 2 and 
after 12,000, you look at four-laning.
    The Chairman. After 12,000. Now just to put that in 
perspective, what do we have on 85 and Highway 12?
    Mr. Ziegler. 85 and Highway 12? Looking back on the chart, 
on 85, South Dakota 294, we're at an average of 1,302 vehicles 
per day. The high is 3,758 and the high is right here in Bowman 
proper where, as you can see if you drive around the city, 
there's an influence of each one of the communities where 
people are traveling to businesses, back and forth, 
restaurants, schools, churches, and those types of things, but 
that's within the communities. So that's--but we work on the 
basis of averages.
    So from South Dakota to I-94, it's 1,300 average. I-94 to 
Watford City it's 1,748 average and that includes trucks, and 
then Watford City to Williston is 2,828, and that was one of 
the reasons that I had recommended a Super 2 so that we could 
get some quicker action so that we could get cars to be able to 
pass all the caravans of trucks that we have.
    The Chairman. OK. Let me just say this. We have just a few 
minutes left in this hearing. If there's anybody here in the 
audience that would like to provide testimony to the committee, 
we will leave the record open for 10 days, but if somebody 
would want to stand and be recognized now to make a statement 
for the record, we'd be happy to take that testimony at this 
point.
    Yes, sir. If you'd identify yourself for the record and who 
you're affiliated with or if you're just representing yourself?
    Mr. Bowman. Senator Conrad, I'm Senator Bowman. All of 
Highway 12 is within my district and three-fourths of 85. So 
I'm currently familiar with the traffic, but the one thing 
that's been left out of this discussion is that the potential 
even for Bowman's oil, after the pressure goes down, 
ConocoPhillips said they're going to come in and re-energize 
the field.
    Well, here we go with all this traffic again and all these 
new trucks and all this equipment is going to be back in here. 
What's the benefit of that? A lot more production for a lot 
longer time and that also has its toll on the roads that we're 
discussing.
    We haven't even talked about that up north yet because 
we're just seeing the beginning of production, but the long 
term from what I've read, we're going to see this for a long, 
long time and then we don't know how much commerce is going to 
be developed because of the huge vast amount of oil. That can 
lead to a lot more truck traffic or other traffic down the road 
in 10 or 15 years.
    Are we preparing ourselves for the future or are we only 
going to talk about that? I think it's important that we start 
to visualize the future out here and what great potential we 
have.
    With that, I thank you.
    The Chairman. Thank you, Senator Bowman, and I think the 
point you're making is very important because so much of what 
is done in terms of building is based on historic counts, isn't 
it, and with the point that you're making, which we really have 
to pay attention to, is where's all this headed?
    Mr. Bowman. Correct.
    The Chairman. When we've got, by probably the most 
conservative estimate, 4.5 billion barrels that's recoverable 
between Bakken and Three Forks, I say that's very conservative. 
I believe it is substantially more than that that's going to 
prove to be recoverable.
    So we really have to not only look in the rearview mirror, 
we got to look in the windshield at where we're headed, and I 
think that's the point Senator Bowman is making here, and we 
better be paying attention to where this is all headed because 
it'll be upon us and then we're reacting and we'll be behind 
the curve. I think that's the point Senator Bowman is making 
and he's exactly right.
    Francis, would you like to respond?
    Mr. Ziegler. Mr. Chairman, Senator Bowman's comments are 
right on. We certainly need to look ahead and when I look 
ahead, Mr. Chairman, there are times when there's an 
overwhelming feeling, the fact that the entire state's 
infrastructure system's suffering, whether it's in the oil 
country, whether it's in the Devils Lake area, Pothole Region, 
or where we were last week at Wahpeton.
    We have just an overwhelming job and I guess the best start 
that I can suggest is that we get a transportation bill, a 
long-term bill that will address the funding needs that we 
have.
    The Chairman. Let me just conclude the hearing on this 
note. Direct Ziegler's pointed out what some of the more urban 
states are trying to do. They are trying to, in effect, wall 
off a big chunk of highway spending and transit spending for 
them because the current formula recognizes that we've got a 
national transportation structure and that the more rural 
sparsely populated places of the country need more money. We 
get $2 for every dollar we send in.
    The more urban parts of the country see that and they want 
to get money that has traditionally come to us. I mean that's 
what this is about. So they have come up with this new 
proposal, I could say--call it something else, but I'll call it 
a proposal and they're trying to wall off money for communities 
that have 500,000 people and more.
    Those of us who represent more rural areas have said, OK, 
if you're going to do that, you got to dedicate at least a 
third of it to rural areas and that's the proposal that Senator 
Barrasso and I introduced before this most recent break in 
Congress. We have 11 of our colleagues have joined us, about 
evenly divided between Republicans and Democrats, all from more 
rural parts of the state.
    But, look, we understand. The House is based on population. 
The membership is based on population. So California's got more 
than 50 representatives in the House of Representatives. North 
Dakota's got one. So we've got to use our position in the 
Senate where every state gets two in order to get any kind of 
fair result. That's just reality and so that's why these 
hearings are important.
    I want to thank all of the witnesses for taking their time 
to be here today, to help us build the record. I want to thank 
Senator Bowman for your testimony, as well, and to indicate 
we're going to be a very tough fight.
    Before we conclude, Francis or any of the other witnesses, 
any final comment you'd want to make for the record?
    Mr. Ziegler. Mr. Chairman, again, I appreciate the 
opportunity to testify to you and your committee and certainly 
look forward to working with you for a long-term transportation 
bill.
    The Chairman. Yeah. We're going to have a challenge.
    Anything else you'd like to add, Mayor James or Cal?
    Mr. Klewin. Just quickly. One of the things that we're 
trying to do as far as the Theodore Roosevelt Expressway and 
one of the things that I think you are familiar with, we're 
working through a corridor management plan right now, taking a 
look at some of the things, the potential for economic 
development, issues as far as transportation, and that's what 
we're trying to do, is look into the future----
    The Chairman. Yeah.
    Mr. Klewin [continuing]. And get a vision of that and we're 
working on that as we can with our alliance and showing the 
entire corridor and hopefully we'll get a vision of what the 
potential is with that corridor management plan.
    The Chairman. Thank you for that and thank all of the 
witnesses. Director Ziegler, Mayor James, Cal, thank you very, 
very much. Thanks all of you for being here, and we'll declare 
the hearing adjourned.
    [Whereupon, at 2:09 p.m., the hearing was adjourned]


               FIELD HEARING: STUMP LAKE FLOODING ISSUES

                        FRIDAY, AUGUST 27, 2010


                                       U.S. Senate,
                                    Committee on the Budget
                                               Lakota, North Dakota

    The committee met, pursuant to notice, at 9:19 a.m. in the 
Sunlac Inn, 310 4th Avenue, SE, Lakota, ND 58344, Hon. Kent 
Conrad, chairman of the committee, presiding.
    Present: Senator Conrad.
    [presiding].

              OPENING STATEMENT OF SENATOR CONRAD

    The Chairman. The hearing will come to order. I want to 
welcome everyone this morning to this hearing of the Senate 
Budget Committee. This is an official hearing of the committee 
and so we will be operating by the Rules of the U.S. Senate.
    An official record of this hearing is being kept. The title 
of this hearing is The Devils Lake Basin Flooding Disaster: A 
Stump Lake Perspective.

[GRAPHIC] [TIFF OMITTED] T8154.427


    I want to begin by welcoming our distinguished witnesses 
here today. Todd Sando, the State Engineer for the State Water 
Commission, no longer the Acting State Engineer but now the 
fully fledged State Engineer. Congratulations, Todd, and it's 
good to have you here.
    Odell Flaagan, the Chairman of the Nelson County Board of 
Commissioners. Ben Varnson, the Chairman and Manager of the 
Upper Sheyenne Water Resource Board. Sharon Young, the 
Emergency Manager for Nelson County.
    Welcome to all of you. Thank you for testifying. I look 
forward to hearing from each of you and look forward very much 
to filling out the record in the series of hearings that we 
have been holding on the crisis in the Devils Lake Basin.
    As you know, we have held hearings in Devils Lake. We have 
held hearings in Valley City. We have had a hearing in Lisbon. 
We have had a hearing in West Fargo, and now Stump Lake 
completes this series of hearings.
    There will be a critically important meeting in Washington 
on September 3rd and everyone now has agreed to attend that 
meeting or be represented at that meeting, both upstream and 
downstream, the state leadership, the Governor, the 
congressional delegation, as well as the full membership of the 
Federal task force.
    As a result of the flooding, we know that tens of thousands 
of acres of productive farmland have been flooded and hundreds 
of homes have had to be moved. The transportation network, 
including the roads and rail line, has been disrupted and the 
local economy continues to take a hit.

[GRAPHIC] [TIFF OMITTED] T8154.428


    Here are NASA photographs showing the dramatic increase in 
the size of Stump Lake between August 1984 and September of 
2009. I don't know if those in the back can see it but this 
shows the very dramatic expansion of Stump Lake.

[GRAPHIC] [TIFF OMITTED] T8154.429


    Since 1996, Stump Lake has risen more than 50 feet. In 
1999, Devils Lake began to flow into Stump Lake and in 2007 the 
lakes equalized. Since then, the combined lakes have continued 
to rise, reaching a record elevation this year of 1,452 feet. 
The lake is now within six feet of the natural overflow. 
Finding solutions to prevent an uncontrolled overflow is in 
everyone's best interest.

[GRAPHIC] [TIFF OMITTED] T8154.430


    The next slides tell us what the experts are saying about 
the continuation of this wet cycle. They are saying that there 
is no way to predict exactly when a normal cycle will return, 
but they have told us there is a 72 percent chance that the wet 
cycle will continue for 10 years or more, a 37 percent chance 
it will continue for at least 30 years, and a 14 percent chance 
that it will continue for at least 60 years.

[GRAPHIC] [TIFF OMITTED] T8154.391


    Simulations show a substantial risk that the lake will 
reach the spill elevation of 1,458 feet. When this flooding 
crisis began, we worked cooperatively on a three-pronged 
strategy: upper basin storage, protecting infrastructure, and 
the construction of an outlet. It is a strategy that we have 
pursued aggressively.
    So far we have secured more than $700 million in Federal 
resources that have been allocated to protect the region and 
there will be an additional $200 million spent this year for a 
total of more than $900 million in Federal resources. Over $400 
million to keep the road network intact. There has been FEMA 
expenditures of more than $84 million repairing damage to 
public infrastructure.

[GRAPHIC] [TIFF OMITTED] T8154.384


    The Corps of Engineers has spent $200 million since 1993 on 
the levee and evaluation of the Federal outlet and other 
protective measures.
    Just parenthetically, I want to say that in 2000-2001, the 
delegation secured agreement for a Federal outlet of 300 cfs. 
The cost at that time was over $200 million. When we shared 
that information--and, by the way, we got initial funding for 
the construction of that outlet, as well. When we shared that 
information with the state and local leadership, they 
determined that a 35 percent share of that $200 million was 
more than they can afford. Their share would have been $72 
million.
    I regret very much that we did not go forward with that 
Federal outlet. We had the Federal funding secured. We had the 
approval of every level of the Federal Government, including 
the Council on Environmental Quality, but the determination was 
made that 72 million of state and local costs was simply too 
much, that a state outlet could be constructed for less, and, 
of course, it could be constructed for less.
    But, of course, it was also an outlet with much less 
capacity. The initial capacity of the state outlet was a 100 
cfs, now increased to 250 cfs. The Federal outlet at 300 cfs, 
if that had been in place for these years, would have made a 
meaningful difference, but there's no sense looking back 
because we've got to deal with what is today and what is today 
is we have the state outlet at 250 cfs and it is moving a 
substantial amount of water. Anyone who doubts that need only 
go look at the state outlet to see how much water is being 
moved.
    There are many options to be considered and the options 
going forward include what can we do about additional 
protective measures, including raising roads and the levee, 
relocating threatened structures, providing other 
infrastructure protection. We can focus on maximizing operation 
of the state outlet. We can construct an east end outlet and/or 
control structure via the Jerusalem or Tolna Coulee.

[GRAPHIC] [TIFF OMITTED] T8154.387


    We are re-examining upper basin storage, although I think 
it's quite clear that Mother Nature has done a pretty big job 
of upper basin storage. This lake has expanded from 49,000 
acres to a 180,000 acres. That's a huge amount of storage just 
in the lake and, of course, anybody who's gone north, and I 
think probably everyone in this room has, knows how much of the 
wetlands have been already filled by these incredibly wet 
conditions.

[GRAPHIC] [TIFF OMITTED] T8154.429


    Finally, should discharges out of the west end of the lake 
be enhanced and, if so, what are the best options to accomplish 
that? So there are many options to be considered and it will 
take time and a coordinated effort to choose the best ones 
going forward, and it will require close consultation and 
cooperation with downstream interests, as well.
    This is now much more than a Devils Lake Basin crisis. This 
is a crisis that threatens not only upstream but downstream, as 
well, and we've tried to make that point in hearings in Valley 
City and West Fargo and Lisbon, helping them see what could 
happen to them if there's an uncontrolled release of water 
here.
    Since the May Flood Summit, the Administration has convened 
a working group at our request to evaluate all options and 
everything has been on the table, including every kind of 
suggestion that has come to us, everything from armoring the 
coulee on the east end to additional west end outlet and 
capacity to moving water to the oil fields of Western North 
Dakota. We've also looked at piping water directly over to the 
Red. So every conceivable option is being evaluated.

[GRAPHIC] [TIFF OMITTED] T8154.386


    The working group at the Federal level has representation 
from all of the relevant Federal agencies, including the Corps 
of Engineers, and in fact is led by the Corps of Engineers, 
FEMA, the Department of Transportation, USDA, the Bureau of 
Indian Affairs, the Environmental Protection Agency, the U.S. 
Geological Survey, and others.
    As I've indicated before, the group's recommendations are 
now anticipated in September. We'd given them a deadline of 
September 9th. They were on track to report by September 7th, 
but in coordination and consultation with all of the relevant 
players, we have decided that it is critically important before 
they reach conclusion that we have another meeting in 
Washington on September 3rd and we have been advised, if we 
choose to do that, that that will put back the report until 
approximately September 20th.
    So we had to make a decision. Would we prefer to have a 
conference call and keep to the reporting date of September 7th 
or did we think it was so important that we have an additional 
face to face meeting on September 3rd which was the only date 
that we could coordinate everyone's schedules, that the final 
report be put off to September 20th? We made the decision that 
it was so important that we have everyone together face to face 
that we would do the meeting on September 3rd, even though we 
know that that puts off the report until probably September 
20th.
    I know there are those here today who favor an outlet at 
the Tolna Coulee. This option is being carefully considered by 
the working group and is clearly one of the options that is 
before us.
    I look forward to hearing this area's perspectives today 
and intend to share what we learn at this hearing with all the 
participants.
    With that, we'll turn to our witnesses and again want to 
thank them very much for being here today. Thank all of those 
who are in attendance, as well.
    Let me just say this is an official hearing. That means we 
follow the Rules of the U.S. Senate and the Rules are this. 
Number 1, that each of the witnesses is recognized in turn, 
that they are given a full chance to express their views, that 
we don't express openly our agreement or disagreement with the 
views expressed, so that people feel that they can express 
their views fully and clearly without fear of being shouted at 
or harangued. That's one of the rules that we follow.
    Second rule that we follow is that when the witnesses are 
done and the questioning period is done, we will open it up for 
public comment. That is, for additional testimony. If somebody 
wants to stand and be recognized and give their name, they will 
be permitted to testify, as well.
    So those are the Rules that we will follow today. With 
that, Todd, welcome. Good to have you here, and why don't you 
proceed with your testimony?

STATEMENT OF TODD SANDO, P.E., NORTH DAKOTA STATE ENGINEER, AND 
   CHIEF ENGINEER-SECRETARY TO THE NORTH DAKOTA STATE WATER 
                           COMMISSION

    Mr. Sando. OK. Thank you, Senator. My name's Todd Sando. 
I'm the State Engineer and Chief Engineer and Secretary to the 
State Water Commission.
    I've been able to speak before you at four of the five 
hearings that started July 8th in Devils Lake and now almost 2 
months later we're here at Stump Lake. So my comments today, 
I'll just summarize them, they'll be more related to the east 
end and dealing with Tolna Coulee and Stump Lake.
    Just for a little background, I just want to point----
    The Chairman. Can I just interrupt you for 1 minute because 
I want to----
    Mr. Sando. Sure.
    The Chairman [continuing]. Introduce Andrea Trevnick who is 
here representing the Governor? Andrea, why don't you stand? 
Andrea is the Senior Policy Analyst, I believe, for the 
Governor, and has been at others of our hearings. Of course, 
the Governor's been at all of our hearings so far, could not be 
with us today, but we're very glad that Andrea's here.
    Thank you. I apologize. Go ahead, Todd.
    Mr. Sando. OK. No problem. As you know, Devils Lake 
flooding is one of our most critical issues in the state of 
North Dakota and we've been at this for 17 years, fighting this 
flood, and as you pointed out with your graphs, you pointed out 
how Stump Lake has risen dramatically, from 1,401 up to 1,452.
    We've been working toward, like you said, a three- pronged 
solution and Stump Lake and Tolna Coulee is a critical part of 
our solutions for alleviating the flood situation here at 
Devils Lake and as you know, since 1993, lake after lake has 
been consumed by Devils Lake and it's been spreading and 
spreading and now, you know, Stump Lake is part of Devils Lake, 
as well as Chain Lakes, Lake Alice, Lake Irvine, Dry Lake, 
Pelican Lake. They've all been consumed by Devils Lake, and 
we're approaching the natural overflow elevation and that is at 
1,458.
    East Stump Lake and West Stump Lake are the bottom of the 
Devils Lake chain. So all the water moves from west to east and 
has been filling up all the Chain Lakes to the north and now 
it's filled up Stump Lake and the current elevation of Devils 
Lake is at 1,451.6. So the last few weeks we've had some 
significant evaporation, so that's been good, some winds. It's 
been running hard at 250 cfs, so we peaked out at 1,452. We're 
at 1,451.6 right now.
    The issue at Tolna Coulee is all the divides at 1,412. A 
couple of years ago there's a lot of sediment that's been 
deposited and it was up around 1,459. The city of Devils Lakes 
bought the Tolna Coulee where it comes out of East Stump Lake 
and they did a project there. They lowered the divide elevation 
by removing the sediment that's accumulated since statehood and 
they lowered that from 1,459 to 1,458. So that's what the 
elevation is right now, the natural elevation that's been 
determined is 1,458. So we're about six feet from overflow.
    And the issue at hand with Tolna Coulee is a lot of it has 
to do with the water quality issues, too. As you know, Stump 
Lake has sulfate levels of 2,500 mg/l, where the main part of 
the lake and where we're been taking water off of ground lake 
for the west end, all that is like 575 mg/l. So one of the 
issues we've had is receiving waters downstream which is the 
Sheyenne River where we've been taking water out of Devils Lake 
and we had a standard on the Upper Sheyenne of 450 mg/l and we 
had emergency rule put in place last year when we started 
running the outlet nonstop at a 100 cfs.
    The emergency rule was able to put water with sulfate 
levels up to 750 mg/l. So we----
    The Chairman. So let's go over this math once again, Todd, 
because it's very important that we understand the different 
sulfate levels.
    This lake, I think, kind of defies the common understanding 
of what a lake would be like. You know, in my mind's eye, the 
quality of water in a lake would be pretty much from one part 
of the lake to another. That's not the case in this lake, is 
it?
    Mr. Sando. That's correct. Most of the fresh water that 
comes in to the lake comes in through Mahvay Coulee, the 
northwest end of the lake, comes through the Chain of Lakes or 
through Channel A, through Dry Lake. So the fresher water comes 
in that way. So the fresher water is in the northwest and as 
you move from West Bay to Main Bay to East Bay to East Devils 
Lake to East Stump Lake to--the water quality deteriorates and 
the levels of sulfate increase. So there is a dramatic 
difference from one end of the lake to the other.
    The Chairman. Let me just say people in the back are having 
a hard time hearing. So if you can speak directly into the 
microphone as you can, can people hear that in the back? That's 
OK? OK. So even hold it up would be fine, Todd.
    So let me ask you this. Let's go over the numbers again. 
Sulfate levels in the west part of Devils Lake are what?
    Mr. Sando. OK. Currently, sulfate levels at Brown Lake in 
the west part of the lake are at 575 mg/l or it's equivalent to 
ppm, too.
    The Chairman. 575 ppm. That's sulfate levels in the western 
part of the lake which is where the state outlet is.
    Mr. Sando. That's correct.
    The Chairman. You are permitted to go to 750 ppm of 
sulfates?
    Mr. Sando. Yep. That's why we have the emergency rule in 
place for the Upper Sheyenne to one mile below Lake Ashtabula. 
We can go up to 750 mg/l and we haven't had to push up to that 
because Devils Lake water is only 575.
    The Chairman. OK. And why is there a limit on sulfates at 
750 ppm?
    Mr. Sando. It's related to municipal domestic use and to 
the environment and it's an environmental and also issue with 
water quality for using for municipal irrigation, for all the 
other types of purposes downstream.
    The Chairman. And what would be wrong with having higher 
levels of sulfates than the 750 ppm?
    Mr. Sando. Higher than 750? You know, that's monitored by 
the health department and the health department has primacy 
over, EPA over the program for water quality standards. Above 
750, I don't know what the criteria are. I really couldn't 
answer those questions. It'd have to be the state health 
department.
    The Chairman. At previous hearings, the state health 
department has said the general rule of thumb is you don't want 
to go above 450 sulfate levels, that 750 is something that we 
can handle in terms of water treatment downstream, but when you 
go above that, you begin to have question about health issues 
and the ability of people's systems to handle those higher 
sulfate levels, and, you know, the problem is if you go 
substantially higher, you then risk people getting sick 
downstream.
    So what are the sulfate levels out of Stump Lake, according 
to your measurements?
    Mr. Sando. Our measurements, USGS does the measurements for 
us and most recent readings are 2,500 mg/l or ppm in Stump 
Lake.
    The Chairman. OK. And in terms of places in between, so it 
goes from 575 ppm in the west to 2,500 in Stump Lake, how about 
places in between?
    Mr. Sando. OK. We've been looking at the Main Lake and East 
Devils Lake and as you move from, you know, east back toward 
the west, the water quality does start improving and, for 
example, East Devils Lake, the sulfate levels in East Devils 
Lake are about 1,100 ppm. So that's significantly different 
than the 2,500 ppm in Stump Lake.
    The Chairman. OK. Please continue.
    Mr. Sando. OK. Regarding that, you know, when we're talking 
sulfate levels, since the standard is this 750, we're unable to 
discharge water above that number because--so right now, with 
the standards the way they are in the Sheyenne River, we 
wouldn't be able to discharge any water from Stump Lake through 
Tolna Coulee and actually would not be able to discharge water 
from East Devils Lake unless, you know, we had water to blend 
and mix with it to bring it down to 750.
    So what we've been doing for the last couple years, we've 
built that outlet on the west end and we initially built it for 
a 100 cfs. That completed construction in 2005. We were able to 
get a little bit of water up, but because of the constraints, 
the constraints at that time were 450, and we could hardly get 
any water out the west end outlet.
    In fact, in 2006 we were unable to even turn the west end 
outlet on. So in 2006 we did not even move any water out of 
Devils Lake. Then 2007 came and we started discharging a little 
bit of water and 2008 got a little bit more out. Then in the 
Winter of 2009, as everyone knows, that was one of our worst 
winters on record and we had record inflows into Devils Lake. 
We had 590,000 acre feed enter Devils Lake and the lake came up 
three feet and the emergency just got really, really critical.
    So at that point, that's when we started to design upsizing 
the outlet to go from a 100 cfs to 250 cfs and this past winter 
we constructed it, did winter construction and upsized the 
outlet from a 100 to 250 cfs and in June we started operations, 
additional operations by discharging 250 cfs instead of 100. So 
since the middle of June we've been running at 250 cfs. So 
we've been getting a significant amount of water out.
    As you know, you know, this has been ongoing for 17 years 
and the lake's up 30 feet and there's only six more feet to go. 
We're kind of behind the eight ball now and the probabilities 
and risks, I've testified about that, how the risks of the 
overflow's very significant.
    The Chairman. What--I think it's important that you repeat 
that testimony here that you provided at previous hearings with 
respect to the risk.
    Mr. Sando. OK. Regarding risk, the stochastic model that 
the Federal Government, USGS, has been modeling Devils Lake 
with and they show that there's a 13 percent probability that 
Devils Lake could overflow in the next--within the next 20 
years.
    The Chairman. A 13 percent chance, 1-3.
    Mr. Sando. Yeah.
    The Chairman. You know, it seems odd to many of us that the 
odds--that they put the odds that low, given the fact the lake 
went up three and a half feet last year, went up two feet this 
year.
    How do they come up with the calculation that there's only 
a 13 percent chance that there is an uncontrolled release of 
water?
    Mr. Sando. The period of record's very critical in 
determining, you know, the risk and what the statistics show 
and they've been actually showing 1980 to current. So they 
actually--their statistics include a drought period, 1988 to 
1992. 1988 was a very severe drought and that's back when 
Devils Lake was down around 1,422 and we're worried about a 
major fish kill and so the GS has been using that 1980 to 2000, 
that 30-year period, as their record.
    So that's why the probabilities look lower. In fact, now 
the GS has even taken another look at it, just taking wet 
years, 1993 to current, and the statistics and risk is even 
higher. I think the numbers are over 20 percent chance if you 
use the wetter period of it overflowing, not this 13 percent 
number, but they didn't want to be seen as, you know, kind of 
like cooking the books and just taking the worst years. So they 
put in the 1980's drought with their statistics.
    The Chairman. Can I just say this? I mean, it just seems to 
me they're not dealing with reality and I've seen this year 
after year after year. Their predictions have been wrong by a 
huge factor. Over and over they say you've got a 1:100 chance 
of it going up X feet and we do it. I mean, I went through this 
in a previous meeting. Their predictions of what the odds were 
about this lake going up and they have been so far off, they're 
not even in the same ballpark as to what's happened.
    So I think one message we need to send today is they need 
to throw these models out. They've been wrong by a country mile 
year after year after year. So I personally put about zero 
credibility behind their estimates. We know in 4,000 years of 
history that this lake has gone over three times and we are on 
the exact same trend line as what we've seen before.
    So this notion that there's only a 13 percent risk to me 
just lacks credibility and I know that's not your prediction. 
I'm not faulting you for that. This is a message we need to 
send to USGS. As far as I'm concerned, it just has no 
credibility.
    Mr. Sando. And that's why they did look at a wetter period 
now, too, to see what the potential is for overflow and the 
lake continuing to rise and they have to look at all the 
different--I mean, they look at 10,000 different traces. So 
they've looked at a whole range. I'm not here to defend them or 
anything, but that's how they develop it.
    It's not actual forecasts that they think the lake's going 
to do that in a given year. They just say, OK, here's the 
probabilities based on the longer-term trend. It's not----
    The Chairman. If we get predictions from them, I mean, I've 
read them at previous meetings, their predictions of what the 
lake would do and repeatedly--I mean, I remember at one point 
we had 3 years in a row where they said it was a 100:1 shot 
that it would go up that much and we've done it. So they've got 
year by year predictions and none of them have been right. I 
mean not even close to being right.
    Mr. Sando. OK. Continuing on then to talking about this 
risk, even this last 2 months, the probabilities have changed 
even in their model. Their models, I had testified earlier, if 
you had operated at 250 cfs in conjunction with the conditions 
out there, there's a 9-percent--we'd reduce the risk from 13 to 
9 percent--I mean to 7 percent.
    Well, now that the summer's been wet all summer long and 
the lake's stayed, you know, high all summer, the risk now has 
gone from a 7-percent in my earlier testimonies to 9 percent, 
even with a 250 cfs outlet, and that does include the 1980's 
drought period, too. So the risk is very high and, you know, 
when we develop floodplains, we're worried about a 1-percent 
risk.
    So that's why, you know, not to defend the GS and 
everything but when we start seeing numbers, you know, double 
digit numbers, it's an extremely high risk.
    The Chairman. The other thing I just want to say before we 
go further, I want to make sure, Tracy, that when we have the 
meeting in September 3rd, that we have the year-by-years of 
what they said was the chance of the lake going up by the 
amounts that it has and that we have that for a presentation 
because if we don't start out with the proper evaluation of the 
risk, we're not going to make the right decisions about how we 
avoid what would be a catastrophe not only here but for 
everybody downstream, as well.
    Mr. Sando. OK. That kind of explains the risk and what's 
been happening, getting back to things that are on the table. 
As I testified earlier, we'd like to try to move additional 
water out the west end, you know, upsizing, longer periods of 
operation.
    We'd also like to do something else somewhere out the east 
end and I want to talk about that a little bit more, what some 
of the options are there. Like you said, everything's on the 
table. We're looking every direction out in Devils Lake Basin 
to try and move water, if it's the Forest River, if it's the 
Goose River, if it's the Sheyenne River, if it's the Souris 
River.
    So we've been doing a lot of analyzing and one of them 
that's been kind of coming to the forefront is trying to get 
water out of East Devils Lake because the water quality is 
significantly different there than actually in Stump Lake. So 
we've been looking at trying to design a gravity channel and 
I'd really like the Federal task force to give that very good 
consideration, trying to take water out of East Devils Lake 
through the Black Slough Area.
    You can follow right through the Black Slough. That is 
another area that the lake has overflowed in the last 10,000 
years. The elevations there are higher than Tolna Coulee. Tolna 
Coulee is at 1,458. We think the Black Slough Area's at 1,465. 
So it's like seven feet higher over in that area.
    The Chairman. And how much are we pumping? To what height 
are we pumping on the west end?
    Mr. Sando. We're--OK. To answer that question, we're 
actually pumping it over a hundred-foot hill. So there's a 
hundred feet that we're going up.
    The Chairman. And that's expensive to pump water.
    Mr. Sando. Right.
    The Chairman. So if we could come out of East Devils Lake, 
we'd only have to pump up 10 feet?
    Mr. Sando. If we could come out of East Devils Lake, I 
mean, you could have--if it's at 65, ideally, I think we'd look 
at trying to cut a gravity channel so it would just flow out 
and naturally put a control structure of some type, a gate on 
it, and let it come out that way, and then there wouldn't be 
any operating costs with electricity. For example, our west end 
outlet right now, it costs us $2 million a year just in 
electricity to run the outlet. It's $325,000 a month for 250.
    So if we go upsize the west end, let's say if we want to 
double it, it'd cost us $4 million a year just in electricity 
costs just to run the outlet. So that's why we've been--we're 
trying to look at getting further to the east where we don't 
have such hurdles of, you know, high hills and lifting so much 
water out. But as you move from west to east, the water quality 
deteriorates.
    So I think it's a good balance over at East Devils Lake, 
you know. The water quality's at 1,100. The lift isn't much 
there. So we can get the water out a lot easier. So I'd really 
like the Federal task force to really give that a closer 
consideration.
    The Chairman. OK.
    Mr. Sando. In conclusion, Tolna Coulee, there's a lot of 
different perspectives out there. I just want to mention 
downstream people, we've got to take them into consideration, 
too. They are really concerned about the amount of water that 
would come out of Tolna Coulee and the quality of water. So 
there's people downstream that are interested in hardening 
Tolna Coulee at the 1,458 elevation. There's even people out 
there that would like to see it higher.
    The people in the Devils Lake Region would like to see a 
controlled structure/outlet out at Tolna Coulee and they'd like 
to see it lower. As you'll hear from additional testimony 
today, you know, different perspectives. So it's one of our 
most difficult decisions that needs to be made in water 
resources in our state right now, how to handle Tolna Coulee 
and how to get the water out, because it impacts people in so 
many different ways, from the people in the Devils Lake Region 
to the people downstream. So it's going to have--we're going to 
have to find some type of happy medium, but it's a tough 
decision.
    So as of right now, there's been resolutions from all 
different sides on this issue, from legislature, even the Water 
Commission staff, Water Commission members, you know, wanting 
to do certain things, and as you'll hear today, there's a lot 
of different perspectives.
    So that concludes my testimony.
    [The prepared statement of Mr. Sando follows:]

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    The Chairman. OK. Thank you, Todd. Thank you very much.
    Next, we'll go to Odell Flaagan. Odell, the Chairman of the 
Nelson County Commissioners and Park Board.
    Welcome, Odell. Thank you. Let me just say before you begin 
how much I appreciate the extraordinary amount of effort and 
time that you have dedicated to this issue.
    Year after year after year, you have been unflagging in 
coming to the meetings, giving Nelson County perspective to 
these difficult issues, and I just want to publicly thank you 
for your long leadership on these issues.

     STATEMENT OF ODELL FLAAGEN, CHAIRMAN OF NELSON COUNTY 
                  COMMISSIONERS AND PARK BOARD

    Mr. Flaagan. Thank you, Senator. Honorable Senator Conrad 
and Committee Members, for the record, my name is Odell 
Flaagan, Chairman of the Nelson County Commission and Park 
Board.
    I'm here today to discuss the flooding issues of Stump Lake 
and Nelson County. Our first roads went underwater on May 25th, 
2005, at 1425. Today, these roads are 27 feet underwater at 52. 
We have lost many farms, including thousands of acres of 
tillable farmlands, since the lake started to rise.
    On August 4th, 2010, we have 573,083 acre feet of water in 
Stump Lake that covers 16,756 acres. We have lost many 
thousands of dollars to property tax due to decreased land 
values. We have one east-west county road left in the north 
side of Stump Lake which is in trouble, causing concerns about 
the accessibility to fire, ambulance, school buses, mail 
carriers, and agricultural base.
    As of today, we have three new housing units being built in 
the South Shores of Stump Lake, one major camping park on the 
north side, and our county park which has 85 permanent 
campsites and 45 additional weekend sites.
    A major concern of the developers in the county is we don't 
want the lake to become a lagoon or a holding pond in Nelson 
County. Nelson County is proposing to the State Water 
Commission and the Corps of Engineers to build a control 
structure in the Tolna Coulee just northwest of Tolna on our 
County Road 4, Leval Township, Section 29 and 30. This location 
is approximately one and a half miles southeast of the property 
owned by the city of Devils Lake.
    The proposed outlet would be at 1,446 to 48, so the water 
would stay at a natural flow for the Jerusalem Coulee and the 
West Outlet of Stump Lake. We feel that if the outlet breaks 
out naturally, we would lose three major roads north and east 
of Tolna, including the railroad trestle, and eventually take 
every road between Stump Lake and West Fargo.
    Nelson County feels that the cheapest way to avoid this 
scenario is to have no pumping costs and the State of North 
Dakota to control the flow of water in the Sheyenne River. This 
letter is to clarify the views of Nelson County Commission 
regarding Stump Lake.
    We support control structure in the Tolna Coulee outlet at 
Sump Lake and the gradual drawdown of the water to 1,447 and 
48. We do not support the armoring of the Tolna Coulee at the 
present elevation. The Tolna Coulee is a natural outlet to 
Stump Lake and would not require any pumping costs. The 
drawdown of water to this elevation of 1,447 would free up 
about 50,000 acres of agricultural land in the Devils Lake-
Stump Lake Basin that is currently flooded.
    We, the Commission of Nelson County, strongly support the 
control structure on the Tolna Coulee and do not support the 
armoring of the Tolna Coulee. We ask for your support.
    Thank you for your time and cooperation, Senator Conrad and 
Committee Members. We appreciate your time and support given to 
us in Nelson County.
    [The prepared statement of Mr. Flaagan follows:]

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    The Chairman. Thank you, Odell. Thank you very much for 
that important testimony, and now we'll go to our other 
witnesses. We appreciate very much their being here, as well.
    Ben Varnson, the Chairman and Manager of the Upper Sheyenne 
River Joint Water Resource Board.

    STATEMENT OF BEN VARNSON, CHAIRMAN, NELSON COUNTY WATER 
                       RESOURCE DISTRICT

    Mr. Varnson. Thank you, Senator. Apparently I wear several 
hats. I'm a member of the Nelson County Water Resource District 
and vis a vis Chairman. I'm a representative and serve on the 
Upper Sheyenne Joint Board where I am also Chairman of the 11 
counties that make up that Upper Sheyenne and Symbollio Dam to 
Sheridan County, as you well know, and I'm pleased to represent 
those folks, as well.
    This is a brief overview from our Water Resource District 
that I will present to you at this time. Following this 
presentation, there is a resolution that the Red River Joint 
Board, that we are also members of and serve on, and the Upper 
Sheyenne are accompanying my remarks. I won't be reading that 
but that should also be placed in the record.
    The Chairman. Without objection, that will be part of the 
record.
    Mr. Varnson. Thank you, sir. The Nelson County Water 
Resource District has in the past and will continue to help our 
region and county from adverse impacts caused by flooding. We 
will continue to work in concert with our watershed partners, 
the Red River Joint Board, the Upper Sheyenne Joint Board, the 
Devils Lake Basin Joint Board, into the future.
    Our County Water Resource District is a member of all of 
these three joint boards. Most recently, the Nelson County 
Water Board helped develop and approved the Red River Joint 
Water Resource Board's support of a resolution for a Devils 
Lake structural outlet. The Upper Sheyenne Joint Board has 
written a letter of concurrence of this resolution. A copy of 
this resolution, as previously stated, is accompanying these 
brief remarks.
    Our county has for the past 15 years been proactive in the 
need of a cleanout of the Tolna Coulee. We have been involved 
with minor work on and below that outlet divide. We have helped 
facilitate meetings with downstream folks, including Valley 
City, Cass County, and the city of Devils Lake, to name a few.
    Stump Lake began filling in 1993 with heavy rains. This 
extreme wet cycle has continued and weather experts report that 
it may continue five-10 years out, as you very eloquently 
portrayed at the beginning of the hearing, or for future years.
    In 1993 and the few years that followed, our Water Resource 
District was challenged with replacing a washed- out culvert in 
Dutch Point Road resulting from heavy rains. At that time the 
water elevation of Stump Lake was 1,396. Today, there are over 
30 miles of township and county roads that are presently lost 
to Stump Lake. Our records show maybe 10 more miles than what 
may more accurately be portrayed in other documents, but in our 
view our work with landowners and so forth, section lines and 
other prairie trails, we enhance that mileage.
    The water has risen approximately 56 feet to its present 
elevation of almost 1,452. Landowners, farmers, and ranchers 
continue to feel these negative impacts. Financial and other 
personal losses are devastating families here and in the entire 
region.
    Programs need to be adjusted fast to make dollars available 
to compensate the people who are losing all or large portions 
of their livelihoods. A recent finding is that CRP enrollments 
may not be available if water looks to be permanent. This must 
be corrected now because these landowners need to pasture for 
the new condition of their land. It is important that this be 
handled correctly and not be too shortsighted.
    Any measures to help landowners for income lost during a 
disaster, such as this, seems to get removed. It is our hope 
that this will be corrected as agriculture and recreation 
development need to be balanced.
    Nelson County Water Resource District supports the economic 
development of Stump Lake and the surrounding area but we need 
a wise review of water elevations and a natural water course 
release. Our Board has supported using the Tolna Coulee and a 
control protection plan from 1,447 to 52 elevation. We have 
been delayed by bad judgments and avoidance as to what may 
happen in a natural and serious discharge of water. This is 
certainly now an Eastern North Dakota dilemma.
    This concludes my remarks, along with the resolution 
previously mentioned.
    Thank you, Senator.
    [The prepared statement of Mr. Varnson follows:]

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    The Chairman. Thank you, Ben. Thank you very much for that 
important testimony, and next we'll go to Sharon Young, who is 
the Head of Emergency Management here in Nelson County.
    Welcome and please proceed, Sharon.

  STATEMENT OF SHARON YOUNG, EMERGENCY MANAGER, NELSON COUNTY 
                      EMERGENCY MANAGEMENT

    Ms. Young. Thank you. Thank you, Senator Conrad. For the 
record, my name is Sharon Young, and I'm the Emergency Manager 
here at Nelson County.
    I thank you for this opportunity to present some testimony 
about the flooding issues and their impact within the Nelson 
County portion of the Devils Lake Basin and in particular the 
Stump Lake area.
    I also thank you for this opportunity to provide input as 
you work toward a plan of action to deal with the chronic 
flooding and the threat of an uncontrolled spill to the 
Sheyenne River.
    I'm more or less going to give you some history, Senator 
Conrad. Here are some of the things that have gone on in our 
county since I've become emergency manager.
    Stump Lake was at an elevation of 1,414.6 when I became 
Nelson County's emergency manager in October of 2003. Earlier 
this summer, as it's already been testified, it reached an all-
time high of 1,452.1 on June 27th. That's an increase of 37 and 
a half feet in the time that I've been emergency manager.
    The lake has risen almost 50 feet since the wet cycle began 
in 1993 and in just the past 2 years it has risen almost five 
feet with an increase of 77,477 acre feet, an increase of 1,855 
acres. That's almost three sections of land that have 
disappeared under the water in just these last 2 years.
    Stump Lake flooding has taken homes, farm buildings, and 
productive ag land, along with its property tax valuation. Area 
residents have lost portions of their livelihood with little or 
no compensation for their loss. Some have relocated to nearby 
farmsteads and some have actually had to move their homes.
    The lake has devoured 18 miles of county and township 
roads. We have citizens that are traveling many miles out of 
their way because all their roads are either closed or 
underwater. County Road 23 north of the lake will be lost next 
if the water rises another two feet. The elevation of that road 
is 1,454.5. This is a major route between Lakota and Tolna and 
is very important also for our emergency responders.
    Flooding has resulted in increased response time for 
ambulance, fire, and law enforcement vehicles and also 
increased our travel distances for school bus routes, mail 
routes, and getting to work and for our farmers getting to and 
from their fields.
    Flooding has caused some mental health issues related to 
long-term stress. We have experienced problems with water on 
private driveways, water in basements, and the accompanying 
mold, mildew, and cleanup issues, damage to electrical systems, 
plumbing systems, furnaces, water heaters, appliances, 
furniture, and carpet. We have had requests for pumps and 
sandbags by citizens trying to fight the flood fight.
    Rising Stump Lake has also created issues at Stump Lake 
Park. Stump Lake Park is county-owned and as such is a critical 
source of revenue for Nelson County. Over 16,000 people use our 
park annually, enjoying the park's 100 campsites, three ball 
diamonds, docks, fishing stations, cafe, pavilion, and Pioneer 
Village.
    The county has spent over $200,000 on improvements over the 
last few years and the park property, its buildings and 
infrastructure are currently valued at two million. Our 90-
year-old pavilion is a historic landmark and was recently added 
to the National Register of Historic Places.
    Much of Northern Nelson County, which is also in the Devils 
Lake Basin, has been flooding for more than a decade, also a 
result of the prolonged wet cycle. The flooding has washed out 
roads, flooded crops and forced some rural residents from their 
homes.
    Over the past several years, Lake Loretta and McHugh Slough 
have spread over thousands of acres of land. The high water 
table in this part of the county has taxed water and sewer 
systems in the city of Michigan. The city has a drain that 
moves water from town to Lake Loretta in the northwest and in 
May, heavy rains along with lagoon problems, caused a water 
emergency wherein that city was without water for over a week.
    With that said as far as historical things, Nelson County 
has had Presidential declarations in 1993, 1994, 1995, 1996, 
1997, 1998, 1999, 2000, 2001, and we skipped till 2004, 2005, 
and last in 2009 and 2010, all for flooding and ground 
saturation. We have received public assistance for each of 
those years but individual assistance for only two.
    With all that said, though, Nelson County has been 
proactive in its approach to the flood fight. In 2005, the 
County Commission and others lobbied the legislature for 
funding and received a half million earmarked for Nelson County 
flooding, over half of which was used for road repairs and the 
other half for water management projects.
    In November of 2009, again because of numerous flooding 
problems, Nelson County residents voted their approval to 
increase by 10 mils to fund the maintenance of our farm-to-
market roads.
    The county also contracted with the Red River Regional 
Council and the U.S. Department of Agriculture in May of 2009 
to develop the Stump Lake Master Plan. The purpose of this 
document was to review the existing park facilities and make 
recommendations on how to develop future activities. Relocation 
of the pavilion and the cafe were addressed in this plan.
    Nelson County has recently requested assistance from the 
U.S. Corps of Engineers, Army Corps of Engineers, in 
constructing a permanent levee in Stump Lake Park. HESCO 
barrier was installed in May of 2009 and does provide 
protection to 1,453 but this is a temporary solution and the 
HESCO barrier began leaking and eroding this spring due to wave 
action.
    Governor Hoeven has sent a letter on our behalf to the 
Corps requesting flood protection techniques, emergency 
construction methods and inspection of existing flood projects.
    Nelson County has supported and sponsored a buyout or home 
acquisition through the hazard mitigation grant for one of our 
residents with historic flooding. Our county has obtained and 
prepositioned sandbags, Red Cross cleanup kits and maintained a 
close working association with the Red Cross, the Salvation 
Army, and the other voluntary organizations active in disaster.
    Our County Road Department and its road superintendent and 
staff have worked diligently maintaining and repairing our 
roads, working within the oftentimes cumbersome parameters of 
FEMA requirements.
    The last proactive measure I'm going to mention is that 
recently our landowners voted to approve a $2.6 million 
Michigan spillway control project to divert pooling sheet water 
away from that city and also relieve about 40,000 acres of ag 
land and rural road flooding.
    This project is estimated to lower the level of Lake 
Loretta by about seven feet and if the spillway can operate at 
50 cubic feet per second, it will remove about 18,000 acre feet 
annually.
    In conclusion, the state faces water quantity and water 
quality challenges in its quest for a workable solution to 
Devils Lake flooding. Ground saturation level is so high that 
we are just a couple rains, heavy rains away from a possible 
uncontrolled overflow. We need a control structure on the 
natural outlet from Stump Lake to Tolna Coulee to the Sheyenne 
River to manage water releases.
    When I first became emergency manager, one of my tasks was 
to go through the things in the office from the past years and 
to sort through and reorganize the office. I have an entire 
file drawer full of past studies done on the Devils Lake Basin, 
the Devils Lake flooding situation.
    Studies provide important information to those having to 
make big decisions and those trying to come up with the best 
solution that is best for all but we've just about run out of 
time for more studies.
    Senator Conrad and your Committee Members, we need your 
help now. We need to be a part of the solution here, too. 
Nelson County asks for your support of a control structure on 
the Tolna Coulee.
    Thank you for your time and effort.
    [The prepared statement of Ms. Young follows:]

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    The Chairman. Thank you, Sharon, for really excellent 
testimony. I wish every member of the task force could have 
heard that for themselves and hear the testimony of this panel. 
It is very powerful about what's happened here in Nelson County 
and the risk that exists to even further damage. I think it 
just is clear as it can be from the testimony of this panel.
    Let me ask if there's any further comment that any of the 
witnesses here would want to make before we open it for 
testimony from those who are here in the audience. Odell?
    Mr. Flaagan. Senator, yes. I've had this comment that you 
heard before. It's not the quality of water that's killing us 
in Stump Lake. It's the quantity and something's got to be done 
with that.
    The Chairman. Yeah. You know, it is an enormously 
complicated situation, isn't it, because we have so many 
different interests and they're weighing in now with 
resolutions, as you quite appropriately have. We've got a need 
to prevent an uncontrolled release out of the east end.
    I think all of us would agree on that. I think downstream, 
not unanimously, there are people who have testified at these 
hearings in opposition to doing that. They just want to armor 
the Tolna Coulee. That is not a solution. That is not a 
solution.
    Water will find a way to move and we all know that and so 
just armoring Tolna Coulee, I must say with respect to those 
downstream who've advocated that, that is not a solution to the 
problems that we confront here. There are other outlets from 
this lake, other than through Stump Lake and the Tolna Coulee. 
We know that. So I just don't see--some are saying just armor 
Tolna Coulee. That doesn't solve the problem.
    Second. We have the issue here of the Stump Lake now being 
full and, you know, what is the future?
    Odell, you had in your testimony very clearly, you want 
this just to become a stagnant lake that's not refreshed. Its 
water quality is not improved by the natural flow of this lake. 
That is a legitimate, very legitimate concern, and in fairness 
to the downstream, it is also fair to say they have a 
legitimate concern about the quality of water coming toward 
them.
    Already, we are spending millions of dollars to upgrade the 
water treatment at Valley City, but we know this water, if it 
comes out either side the lake, goes downstream and will have 
an effect on water quality and water quality is hugely 
important to everyone.
    So this is a very complicated set of issues and enormous 
resources have already been spent. As I indicated, the Federal 
Government has already spent $700 million, by the end of this 
year will have spent 900 million. Some have said, well, that's 
a waste of money. I disagree. If we hadn't spent that money, 
Devils Lake would be under 20 feet of water today. If we hadn't 
done these things, Devils Lake would be cutoff already, and I 
do wish that the Federal outlet had been constructed. I wish 
that had been done.
    I think the 70 million that would have been state and local 
costs would have been money well spent, but, look, the decision 
was made to go in a different direction. We got to deal with 
what is. We got to deal with the circumstance we face now, and 
the circumstance we face now at 1,452 feet or close to that 
really requires urgent action.
    It requires urgent action to move water. That's in all of 
our interests. That's in the interest of Devils Lake. That's in 
the interest of Stump Lake. That's in the interest of Ramsay 
County, of Nelson County, and of every county downstream.
    As I tried to emphasize in the hearings in Valley City and 
the hearings in Lisbon and the hearings in West Fargo, we are 
all in this together. We are all in this together. Anybody 
downstream that thinks, well, you can just wall the water off 
up here and it's not coming their way, I'll tell you that's not 
what history tells us. That is not what history tells us.
    So we together have to find actions that we can take and 
that is the agenda for the September 3rd meeting in Washington 
that many of you will participate in.
    Let me now open it to those who are here in the audience. 
If anybody would like to provide testimony under the Rules, 
stand, be recognized, give your name, who you represent. If you 
just represent yourself, so state, and then say for the record. 
We'd ask you to confine it 2 minutes. Say whatever you think is 
important to be part of this record.
    Would anybody like to be recognized? Let me just indicate I 
will also leave the hearing record open for 10 days. So if you 
want to send a letter, you want to send--doesn't have to be a 
formal letter. If you want to jot down some notes about what 
you think should be done, I would be happy to make that part of 
the formal record, and as I say I will leave the record open 
for 10 days so that people have an opportunity. If you leave 
here and you think, gee, I wish I would have said this or I 
wish I'd haveten this on to the record, you don't have to 
provide it to us today to be included.
    Would anybody like to be recognized? Yes. Yes, sir.
    Mr. Berg. Senator, I'm Harold Berg from Lakota. I think, as 
you wonder about accountability and the rise of this lake, 
you're right on target. It's faulty data. I suggest to you that 
the people who are providing that data ought to be taken into 
consideration. We may need a period of time of change which 
would totally modify all of the projections because the climate 
has changed in this county.
    When I became a citizen here in 1993,
    [off microphone] and I'd suggest that whoever has some 
expertise ought to think about that factor, as well, as they 
consider the probability of the rise of this lake.
    I think you are right that we can't depend on the old data. 
It is based on history, recurrent history, and that is not 
adequate. We have no basis for knowing what's going to happen.
    The Chairman. Well, I thank you for that. I hope I've been 
as clear as I can be. I personally have no confidence in the 
projections on what the level of risk is. I don't believe it's 
a 13 percent risk. I don't believe it's a 20 percent risk. I 
believe it is approaching a 100 percent level of risk.
    Now I can't quantify that, but I look at history and the 
scientists tell us at least three times in 4,000 years this 
lake has gone through a cycle where it's had an uncontrolled 
release of water and I think it's just irresponsible to be 
betting against that happening.
    You know, I mean, I hear--I am so tired of hearing people 
tell me this lake's going to stop rising. I mean, how long have 
we heard that? It's going to stop rising. Well, it hasn't. It 
hasn't stopped rising and if you do a map and you show the 
trajectory that this lake has followed at least three times in 
4,000 year, we are right on that trajectory.
    So to me, this notion that we can bet on this lake going to 
stop some way, well, it stopped between 2000-2008. That gave a 
lot of ammunition to those who have told us over the years it's 
going to stop rising.
    The problem is it was filling up Stump Lake. So sure it 
quit rising. Stump Lake, the water all coming in to Stump Lake. 
Stump Lake went up 50 feet. Now Stump Lake's full. Where's it 
going now?
    So we've got to deal with reality, not what we hope, not 
what we wish it were. We've got to deal with what is happening.
    Others who might want to--yes?
    Ms. Quom. I'm Darlene Quom, and I live by the lake. You 
said we're in all this together. To me, if they send it out the 
east, the south end of East Stump Lake, you're abandoning Stump 
Lake. We need a lagoon. If you send the water where it's 
intended to go, just the way it's going now, to Tolna Coulee, 
put a control structure in there so we can protect the 
downstream people, it would freshen our lake with fresh water 
flow through, eventually it would improve our water quality 
more. It's been improving over the years. It would be a win-win 
situation for the people around Stump Lake. We could develop 
land. We could contribute to our economic aspect of what 
happens around the lake. We could develop our fishery. We could 
do a lot of things, but as the way it is now, we don't know 
what's going to happen.
    We may be ending up with a lagoon or we may end up with no 
water. We may end up with God only knows, but to me it's the 
common sense approach of let it go the way God intended it to 
go and the quality will only improve. As I learned in General 
Science in 8th Grade, that moving water purifies itself.
    There may be a time when it's not so good but eventually it 
would freshen and everybody would benefit.
    The Chairman. OK. All right. Thank you. Yes, ma'am?
    Ms. Clute. I'm Delores Clute, and I'm on the City Council.
    The Chairman. Could you spell your name for the transcriber 
so they get it right?
    Ms. Clute. C-l-u-t-e.
    The Chairman. C-l-u-t-e. All right.
    Ms. Clute. And I'm also--my son and I are landowners and 
I've sat and watched this lake get just like a giant coming 
along and I can talk of water down where--my farm is right 
across the south end of Stump Lake Park and down on our area, 
there are two fresh water lakes now that are underwater. The 
springs have come up underneath and all along the west of our 
land, our spring's fresh water.
    We have a government well on the south end of our yard. 
It's the best water. Two of them in North Dakota. That's one 
well that's the best water and that's the water that's coming 
up in Stump Lake at that south end, but they have never taken a 
sample out of that south end.
    Also, I watched the water come up to our farmstead this 
summer, starting with a little tiny spot like this, due to the 
tornado that went through here and over the summer it just 
spread. So now it's going out into the farmland on the south of 
the road. It's gone up to our buildings which have been in our 
family for four generations and I know it's a problem for 
everybody.
    This spring I had, since 1993, all the studies of the 
engineers and they talk about this high. I'm sorry but I burned 
them all because they didn't do anything and so I'm sorry but 
it's awful to me and there's no stopping it and at the rate 
we're losing roads now, we might as well get out of Tolna 
pretty soon. Those people, Darlene, are like four-five miles 
from town. They drive 18 miles to get to town. Farmers can't 
get to their fields. It's a terrible situation.
    The Chairman. That's very good testimony. Thank you for 
doing it.
    Anyone else that would want to be recognized? Yes, sir.
    Mr. Uglem. Hi. I'm Don Uglem. I have a question.
    The Chairman. Can you just spell for the record?
    Mr. Uglem. U-g-l-e-m. As far as water quality of the lake, 
what's the water quality actually going to be like after the 
water leaves Devils Lake at 1,450? I assume that it's still 
going to be relatively the same.
    Mr. Sando. I can try to answer that. Every year what 
happens at Lake Ashtabula, it freshens up when you get the snow 
melt in the spring time. So the water quality in Ashtabula Lake 
this spring was between 2 and 250 mg/l ppm.
    As we've been operating the outlet this summer now, the 
water at Cooperstown and the headwaters in Lake Ashtabula, the 
salinity levels are changing and the sulfate levels are in the 
low 400's now.
    So what happens, you know, we're going to have to monitor 
that closely as the fall goes along because we had the issue of 
450 standard below Balt Hill Dam. So what will happen this 
winter when Lake Ashtabula freezes, the concentration of 
sulfates even goes higher then and so we'll have our highest 
levels in the winter time and then when the ice goes back out 
next spring we'll get inflow again that will refreshen 
Ashtabula and the whole cycle will start again with the way 
we're operating the outlet.
    Mr. Uglem. When you talk about hardening Tolna Coulee, 
wouldn't it be better to put in a little flow pipe dam so that 
when you have excess salinity you could use--it could go--it 
could freshen Stump Lake to some extent by letting out some 
higher-level salt water to blend with the spring flow or 
whatever after spring flow? And also going east, if you could 
put in a small flow that wouldn't probably affect the Goose 
River or the Forest River, that you could start getting some 
water out of the lake? Doesn't have to be a big yield, just get 
started getting the salinity out and the further it goes down 
each year.
    Mr. Sando. Those are very good points because the water 
quality in Stump Lake has been freshening all along. As you 
look, when the lake was back at 1,396, it was well over 10,000 
ppm. Now we're down to 2,500. So if you can bleed water and 
move water out of Stump Lake, it will continue to freshen. So 
that's correct.
    The Chairman. I'll tell you one thing that I've been 
persuaded of from all these hearings is I think we've got to 
have a multipronged approach. I think we've got to move, 
continue to move water out of the west end, maybe even increase 
that.
    I think we've also got to move water out of the east end 
for all the reasons that have been given here. It really--I 
don't think it would be good to, as Odell says, create a lagoon 
or a pond out of Stump Lake. It needs to be naturally freshened 
and move water out, but we're going to have to do that and not 
have a big problem downstream. We're going to have to blend.
    So the more I hear, the more I see, the more convinced I am 
that we need to blend west end water that's at 500 with water 
out of the east end and maybe even we need to be taking water 
not only from Stump Lake but we need to be maybe taking some 
water from east end of Devils Lake. That's at about, what, 
1,100, Todd?
    You know, the more I hear, I don't think just a one 
approach works here. I think we're going to have to continue to 
take water out of the west end, which gives us water that's 
below the 750 ppm limit, take water out of Stump Lake, so that 
continues to be refreshed, so that doesn't become stagnant, 
take water maybe even out of east end of Devils Lake, so that 
the combined effect is we move more water, blend it to make 
sure we meet the water quality standards, and at the same time 
meet some of the objections of downstream people because 
they've got a legitimate concern about water quality and, of 
course, water quality affects us all.
    Anyone else that wants to be recognized? Yes, sir.
    Mr. Eagen. Thank you, Senator Conrad, for giving this 
matter your attention. I'm Bob Eagen from Tolna. I've served 
many years on the Town and City Council. For many years I've 
operated the bank at Tolna.
    I don't think anyone here today would argue of the adverse 
effects of this flooding, how it's impacted our communities. 
Farmers, landowners, homeowners live on the lake, it's impacted 
everyone. Fire departments, emergency services.
    One of the things that's getting passed over, I believe, is 
the unimaginable economic opportunity that this lake has given 
us. For years, our community, the city of Tolna, the bank, has 
tried to operate with less and less and less, less students in 
our schools, less, less, less. How do we grow in a shrinking 
market?
    Some years ago, we quietly accepted water coming from 
Devils Lake into Stump Lake without raising opposition to hold 
that water back. We've accepted that water and taken our lumps.
    We're in a position right now to make something good out of 
something that's evil. This lake, like the development that's 
been on Devils Lake, has driven our community to a community 
that it wouldn't have been without it. Yes, a lot of farmland 
has been lost but it's lost. Short of lowering the lake, that 
land is not coming back.
    Now, an approach to lower the level of the lake to some 
acceptable level and to bring water through the whole system, 
everyone in this region would--it seems that money has never 
been the obstacle in fighting the Devils Lake flooding, whether 
it's building a west end outlet, increasing dyke levels in 
Devils Lake.
    I don't know how the dyke's going to hold water back the 
way it is. I would hate to be sleeping below a 20-foot wall of 
water. I couldn't do it.
    Anyway, my point is I think we have an opportunity here for 
this community to finally strive toward growing rather than 
shrinking. We are already seeing that happen, whether it's 
traffic through this hotel that we're in right now, traffic 
through the Tolna area, housing developments being built. We've 
got about 75 houses, lots being plotted right now for 
development.
    I realize that----
    The Chairman. And where are those, Bob?
    Mr. Eagen. There's one development right directly north of 
Tolna, two and a half miles. There's another development 
approximately 10 miles northeast of Tolna, and then the 
Eichland development which is about 15 miles northeast of Tolna 
just on Highway 1 North, and the Shrader Capsize north of town, 
there's another proposed campsite of Tolna of a hundred units.
    The Chairman. And why are those things happening?
    Mr. Eagen. Because our lake has become one of the best 
fisheries in the country.
    The Chairman. So it makes it attractive for people to 
develop?
    Mr. Eagen. Absolutely. We see boats come through our main 
street every morning from Iowa, South Dakota, Minnesota, all 
over the country, and even downstream people are coming to 
Tolna to go fishing. So it isn't the--the science says the 
quality it is what it is but it does support the magnificent 
fishery and homes are being built. People are moving to our 
community, not just fishermen but people are moving here.
    The Chairman. So part of this response, I don't want to put 
words in your mouth, but what I hear you saying is part of this 
response needs to be to, while we're dealing with the flood 
threat, to take advantage of the opportunity that's been 
presented, as well.
    Mr. Eagen. We've accepted the devastation already. Let's do 
something good with it.
    The Chairman. OK. And, Bob, can you spell your last name, 
so they get it for the record.
    Mr. Eagen. Eagen, E-a-g-e-n.
    The Chairman. Yes, sir. Thank you very much. Anyone else 
that wants to be recognized? Yes, ma'am?
    Ms. Schmidt. Janice Schmidt from Petersburg. I just want to 
acknowledge the research that's been done to move water to 
Western North Dakota. There's a shortage of water out there.
    The Chairman. A great deal of research has now been done 
because one of the ideas that was given to us fairly early on 
in this process was that. So that is part of what the Federal 
team is reviewing, to see if it would be feasible to take water 
out of the west end of the lake for the oil fields in Western 
North Dakota.
    There are major challenges to that, the geography of our 
state and the high lift that's required to get to Western North 
Dakota and the pumping costs associated with that, but that is 
being very closely analyzed.
    Any other? I know that we are to be out of here in 5 
minutes, but I want to make sure if there's anybody else who 
wants to be recognized. Yes, sir?
    Mr. Johnson. I'm Roger Johnson. I'm on the high part of the 
Tolna Coulee of Devils Lake and I saw on a sheet of paper where 
a separate outfit took soil or water samples and they were down 
to 800 and some, 7 and 800.
    Mr. Flaagan. I can answer that, Senator.
    The Chairman. Odell.
    Mr. Flaagan. We had our Water Commission take some the 
other day. We sent them to Northwood and they give us some 
reports back and they forgot to tell us you got to multiply 
them by three cause Bruce Inglehart from the Water Commission 
called us and we didn't know at the time but that's what it 
comes out. So it comes out to about 2,400. So it was a mistake. 
We talked to Northwood and they said they should explain it to 
us and they didn't and State Water Commission caught it and it 
is true it's multiplied by three, comes out about right.
    The Chairman. OK.
    Mr. Johnson. And there's a slough that had been marked all 
summer long and that had struck higher than it ever has been 
and it's only about a quarter of a mile from the lake. I've 
never seen it stay up that high for this time of the year. 
There must be water coming in from underneath.
    The Chairman. OK. Anyone else that would want to be 
recognized, and again I want to repeat if you leave here and 
you say, gee, I wish I would have said something, if I had some 
idea that I want to make sure that they think about, don't 
hesitate to get in touch with my offices and we'll make it part 
of the record. It doesn't have to be a formal letter. If you 
just jot down some notes about something that you're thinking 
about, we'll make sure it becomes part of the record.
    [No response.]
    The Chairman. All right. Anything, Todd, Odell, Ben, 
Sharon, anything you'd like to add?
    Mr. Varnson. Senator, there's a comment. As we work with 
our neighboring counties, Water Resource Districts and Road 
Departments, about 20 minutes ago some comments were mentioned 
regarding something newly developing concerns east of Devils 
Lake or Ramsay County coming through Nelson, Western Walsh.
    The term that's coming to mind is that the whole region 
outside and near the lakes, north of Devils and Stump Lake, is 
liquefying. Our roads are--railroads are--well, the 
infrastructure and the water isn't seeping through these minor 
watersheds but help needs to be looked at and I know drainage 
should not go into Stump Lake or Devils Lake but a view of 
releasing water over roadways may need to take place. It's not 
going to get any better.
    The Chairman. You know, I was in Candu yesterday and they 
tell me there, they're seeing effects of the water table 
rising, pressure on basements, water in basements that haven't 
had water before. It's like the whole watershed is just, you 
know, chock-a-block full of water, and, you know, it's creating 
issues in places that we've not previously seen it.
    Mr. Varnson. Thank you.
    The Chairman. Any other last-minute?
    [No response.]
    The Chairman. All right. Thank you very much. Thank you, 
Todd. Thank you, Odell. Thank you, Ben. Thank you, Sharon, for 
your testifying. Thanks, all of you, for being here. Thanks to 
everyone who stood up and was recognized and provided 
additional testimony. I appreciate that very much.
    With that, the hearing will stand adjourned.
    [Whereupon, at 11:30 a.m., the hearing was adjourned.]


                       WRITING THE NEXT FARM BILL

                              ----------                              


                        MONDAY, OCTOBER 11, 2010


                                       U.S. Senate,
                                    Committee on the Budget
                                                       Mohall, N.D.
    The committee met, pursuant to notice, at 1:05 p.m. in the 
Mohall Emergency Services Facility Community Room, 104 Central 
Avenue North, Mohall, North Dakota 58761, Hon. Kent Conrad, 
chairman of the committee, presiding.
    Present: Senator Conrad.
    [presiding].

              OPENING STATEMENT OF SENATOR CONRAD

    The Chairman. Hearing will come to order.
    I want to welcome everyone here today. This is a hearing--
official hearing of the U.S. Senate Budget Committee. As an 
official hearing, we will be operating under the rules of the 
U.S. Senate. An official record is being kept.
    The title of this hearing is Writing the Next Farm Bill. 
I'm pleased to say this is the very first hearing in North 
Dakota looking ahead to the next farm bill. So this is the 
beginning of a long process we're beginning right here in 
Mohall--Mohall.
    I want to begin by wel--welcoming our distinguished 
witnesses today: Robert Carlson, President of the North Dakota 
Farmers Union; Scott Backes, a farmer from Glenburn; Larry 
Neubauer, President of the U.S. Durum Growers Association; 
Steve Edwardson, Executive Director of the North Dakota Barley 
Council; Ryan Pederson, Northern Canola Growers Association 
President; and Jeff Oberholtzer, a Director with the National 
Sunflower Association.
    This is truly a distinguished panel, and I am deeply 
appreciative that you've all agreed to testify here today.
    Before I turn to our witnesses, I'd like to just reflect on 
the last farm bill and how important and good it has been for 
North Dakota. During the August recess, I visited 45 counties 
across North Dakota, and what I saw in every corner of our 
state was that North Dakota is looking as prosperous as I've 
ever seen it.
    Now, one of the reasons is we've got the development of the 
Bakken Formation, and only God can take credit for that. None 
of us had a thing to do with placing that oil under our ground, 
but thank goodness for it.
    But we also have the agricultural sector, and agriculture 
is still the No. 1 part of our economy. The farm bill plays a 
big role in how effective agriculture--the agricultural economy 
is for our state. And I'm pleased to report to you that North 
Dakota came out No. 1 in terms of per capita payments under the 
farm bill, and we are No. 1 by a big margin. The next state, 
South Dakota, they got half as much per capita as we get. So 
we're talking $700 million in a year flowing to North Dakota 
producers through the farm bill.
    This is absolutely the best farm bill we've ever had for 
North Dakota, and part of the reason was--was, of course, 
Congressman Pomeroy and I were at the table; Congressman 
Pomeroy, because he is on both the Agricultural Committee and 
the Ways and Means Committee that provides some of the money to 
fund the farm bill, and I was there in my role on the Finance 
Committee, senior member there, senior member on the 
Agriculture Committee, and Chairman of the Budget Committee.
    Always before, it's been the Southerners at the table when 
the final farm bill was written. This time, Congressman Pomeroy 
and I were there, joined by Collin Peterson, our neighbor in 
Minnesota, Chairman of the House Agriculture Committee, and, of 
course, Max Baucus, Chairman of the Finance Committee. So the 
first time ever, we had Northerners in the final negotiations, 
not just a group of Southerners, and it made a profound 
difference in the result.

[GRAPHIC] [TIFF OMITTED] T8154.360


    The 2008 farm bill has been a big win for farm and ranch 
families. Our per capita payments are $2,628 per person per 
year; again, more than double second-place South Dakota. And 
according to USDA data, since 2000, farm safety net payments 
accounted for almost 50 percent of net farm income in North 
Dakota. Let me repeat that. Those who are running around the 
countryside saying, ``Well, let's just eliminate the farm 
program,'' what would the consequence be in North Dakota? It 
would reduce farm income, if the past is any guide, by 50 
percent. Fifty percent of net farm income is accounted for by 
payments under the farm bill.

[GRAPHIC] [TIFF OMITTED] T8154.361


    As a state, agriculture leads North Dakota's economic 
engine. We lead the Nation in the production of 15 different 
crops, including wheat, barley, sunflowers, canola, dry edible 
peas, crops that are familiar to growers right here in Renville 
County.
    In 2009, North Dakota's farm and ranch families produced 
almost $7.3 billion in crops, livestock, and other agricultural 
goods on 32,000 farms. Producers also paid 4.8 billion for 
various farm inputs, hired labor, land rent, interest payments. 
North Dakota exported almost 3.2 billion in agricultural 
commodities in 2009.
    Now, just in 2009 the total domestic state product for 
North Dakota, the total economic output of this state, was $32 
billion. Agriculture, 7.3 billion.
    By the way, payments and remittances by the Federal 
Government, $8.6 billion in 2009. Twenty-five percent of this 
state's economy are payments from the Federal Government: 
Social security, Medicare, farm program payments, activity at 
our air bases, highway construction, education. And anybody 
that doesn't think the Federal Government is playing a huge 
role in the economic lifeblood of North Dakota just hasn't done 
their homework, and agriculture is critically important to our 
long-range economic prosperity.

[GRAPHIC] [TIFF OMITTED] T8154.362


    The importance of agriculture is no different here in 
Renville County. Crop and livestock sales totaled 150 million 
in Renville County in 2008. Renville County produced 7 million 
bushels of barley on 95,000 acres, enough to produce almost 2.6 
billion bottles of beer, and that's why I've asked Scott Backes 
here to testify.
    [Laughter.]
    The Chairman. No, that's not true. That's a joke. But isn't 
that amazing? That's a lot of beer, even in Renville County, 
2.6 billion bottles of beer.
    Renville County also produced almost 86 million pounds of 
canola and 58 million pounds of sunflowers. Those are big 
numbers, and Renville County can be justifiably proud of how 
productive they've been.
    But as good as these numbers are, we all know that 
sometimes our hopes for a bumper crop fall short and producers 
need a backstop. Here in North Dakota, things aren't any 
different. From floods to droughts, we have seen it all, and 
North Dakota farmers need help when Mother Nature turns against 
us.
    Even though it seems like we just passed the last farm 
bill, we're beginning to see the debate on the 2012 farm bill 
already begin to take shape. No surprise, Chairman Peterson has 
told me he helps--he hopes to write most of the bill next year. 
Now, that will be very unusual if it happens because usually 
farm bills are delayed, not written ahead of time, but Chairman 
Peterson has already talked to me about what he thinks is the 
importance of moving quickly.
    And there is an important reason to move quickly, and that 
is the budget pressure that we are going to be under. Make no 
mistake, I think we all understand that we're on an 
unsustainable force as a country with our deficits and debt. I 
am part of the commission, the Fiscal Commission. There are 18 
of us given the responsibility to come up with a plan to deal 
with our debt. We have been given the responsibility to come up 
with a plan by December 1, and I'm spending a great deal of my 
time in the work of that commission.
    And, you know, every part of the Federal budget is being 
scrutinized for cuts, and it is going to have to be done 
because we are borrowing 40 cents of every dollar we spend. 
That cannot be continued. We understand at a time of economic 
downturn, Federal Government has to step forward; otherwise, 
we'd have faced a collapse.
    But now, we're going to have to turn our attention to focus 
on bringing down the deficit and the debt, and every part of 
the budget is being scrutinized. I can testify to that because 
I've been working at least 1 day a week on the work of this 
commission.

[GRAPHIC] [TIFF OMITTED] T8154.363


    It's important--so important that we share the facts of the 
farm bill with our colleagues. How much of the Federal budget 
is devoted to supporting farm income? As a percentage of total 
Federal spending, farm programs, crop insurance, disaster 
assistance make up less than one-half of 1 percent of Federal 
spending. Said another way, for every dollar the Federal 
Government spends, less than half of a penny, one-half of a 
penny, goes for farm programs. These programs provide our 
country with the safest, most affordable, most abundant food 
supply on the face of the earth. One-half of one cent is a 
pretty good deal for the taxpayers of this country.

[GRAPHIC] [TIFF OMITTED] T8154.364


    Another misconception that we face is where is the money 
going? Most people seem to think that a large majority of farm 
bill spending goes to support farm and ranch families. They 
could not be more wrong. The numbers tell a very different 
story. As you can see, for the current fiscal year, almost four 
out of every five farm bill dollars goes to support nutrition 
programs. Farm supports, crop insurance, the disaster programs 
account for less than 18 percent, one eight, 18 percent of the 
farm bill.
    Here you see it, nutrition programs are absorbing 76.9 
percent of all the money that's in the farm bill. So if you 
have your friends in more urban states say, ``Oh, all that 
money's going to farm and ranch families,'' no, it's not. The 
money is being spread all across the Nation in every district. 
In every part of every state, those nutrition dollars are 
flowing. 76.9 percent of the farm bill spending is for 
nutrition programs that go into every community, large and 
small, all across the country.
    And I want to emphasize, when we wrote this farm bill, we 
did not add one penny to the debt. It is completely paid for. 
In fact, we more than paid for it. We actually helped reduce 
the deficit a little bit because we produced more savings and 
more pay-fors than we did impose cost. So anybody tells you the 
farm bill is adding to the deficit and the debt, no, it is not. 
That is absolutely untrue. We didn't add a dime to the deficit, 
and I'm proud of it.
    If you listen to the critics, you'd never know that almost 
80 percent of the farm bill goes to support the nutritional 
needs of our citizens. The way they describe it, the farm bill 
only supports corporate agribusiness millionaires. The facts 
and the--and the--the details tell a very different story.

[GRAPHIC] [TIFF OMITTED] T8154.365


    It's also worth noting how our biggest competitors, the 
Europeans, subsidize their producers. If you make a--an equal 
comparison what we do for our producers and what they do for 
theirs, here is the comparison according to the international 
scorekeeper, the OECD, the Organisation for Economic Co-
operation and Development. They are the international 
scorekeepers on farm support. Here's what they report: The 
United States, $23 billion in farm support for 2008; the 
European Union, $150 billion. That is more than six times as 
much what the Europeans are doing for their producers compared 
to what we're doing for ours.
    So don't let anybody tell you that somehow the United 
States is out there buying these markets. The fact is we are 
trying to provide somewhat of a fair fighting chance for our 
producers up against the European juggernaut, which truly is 
out trying to buy these markets.
    As you can see, we face many challenges as we enter this 
farm bill debate, but as producers, you have an incredibly good 
story to tell. You produce the safest, most affordable, most 
abundant food supply in the world. You contribute enormously to 
our economic well-being. Not only does agriculture have a 
positive trade balance, but agriculture has weathered the 
economic downturn much better than other industries.
    Now I'd like to hear from our witnesses about what they 
think of the current farm bill and what they think we should do 
for the future. Establishing common objectives and priorities 
will give us an advantage once formal negotiations begin. 
That's why today's hearing is so important, the very first 
hearing on the farm bill in the state of North Dakota, and 
we're doing it right here in Renville County.
    With that, I'd like to turn to our distinguished witnesses, 
and we'll start with Robert Carlson. My intention is to go 
right down the table, so we go to you next, Scott, and then 
we'll go to Steve and right on down. We'll have the testimony 
from each of you and then we'll open it up to questions, and 
we'll also have time at the end to hear from people who are 
here in the audience, any testimony that you might want to 
provide.
    With that, Robert, we turn to you. Welcome.

 STATEMENT OF ROBERT CARLSON, PRESIDENT, NORTH DAKOTA FARMERS 
                 UNION, JAMESTOWN, NORTH DAKOTA

    Mr. Carlson. Well, thank you very much, Senator Conrad, and 
welcome to this beautiful part of North Dakota, which is near 
where my farm is, just across the line in Ward County. So we're 
glad that you came up and we're glad that Scott Backes arranged 
the day to be so nice for us to all be here.
    On a--on a serious note, thank you, Senator Conrad, along 
with Congressman Pomeroy, for the work you did in getting the 
SURE program included in the farm bill. That was a major step 
forward to get a permanent disaster program and, as I'm sure 
you know, it has really paid off for North Dakota. I just heard 
on the news driving up here this morning, on the farm news, 
that North Dakota, for the 2008 year, received almost $250 
million in SURE payments, and included in that is something we 
don't think about too often, and that is that about 80--a 
little over $80 million of that total was stimulus--so-called 
stimulus money. So that has been very important, especially for 
the livestock producers in our state and in--actually, to all 
of animal--agriculture, in particular, to have that SURE 
program included. So thanks for that, and I sure hope we can 
continue that in this upcoming farm bill. I think it's very 
important to maintaining a base of family farm agriculture and 
ranching in the United States and--and in North Dakota as well.
    To answer your question about the farm bill, I think the 
2007 farm bill is working well and I think it's popular. I 
think that we were very fortunate to get that bill passed with 
the elements that are in it in 2007. Looking ahead, I think if 
you ask most North Dakota farmers what they want, they'd say, 
``Let's just continue that.'' I recognize, though, that the 
political realities and the budget realities are a little bit 
different this time around, so we may need to look at spending 
that money that we have in the farm bill a little bit smarter 
and we may need to view the politics of getting it passed a 
little bit--a little bit differently. So I think looking ahead, 
we need to continue the safety net for SURE in a new farm bill.
    New factors in the mix since 2007 are that we do have a 
tight budget, as everybody recognizes, and so we should--we 
should, I think with justification, protect agriculture's 
baseline in the budget. And I know that sounds sort of 
technical to most of us in North Dakota, but in the budget 
process in Washington, protecting what is in the baseline--and 
the baseline is where you sort of start in negotiations on a 
new spending bill with Congress--is very important, and if we 
have that historical precedent, it usually gives us some--some 
credibility going in to fight for the number that you've gotten 
before. So I think we need to protect the baseline.
    Our members would like to see a change in the farm program 
in that the money that's in the baseline for direct payments be 
rolled into counter-cyclical and loan rate improvements so that 
we get paid when prices are poor and we need the help and not 
get an automatic direct payment.
    Now, I know we like to get--and, as a farmer, I can't say 
that I ever threw away the check I got in the mailbox, either, 
for a direct payment, but I think in the upcoming budget, if we 
have to give someplace, that would be a place to give. Not give 
the money up, but put it into the loan rate or into the 
counter-cyclical payment so that we get those payments when we 
really need them. And in the years when prices are good, like 
they've been generally for the last 3 years, we wouldn't get so 
much in terms of price support.
    Second thing I think we need to be sensitive to are the 
press reports. I think you alluded to, Senator, about certain 
individuals or corporate interests who haveten multimillion 
dollar payments under the farm program, and that's always good 
fodder for the news. I know that it doesn't amount to much in 
the aggregate, but it makes us look bad as--as farmers. I think 
the--the payment limits on direct payments and on counter-
cyclical payments are good limits; however, on the loan--on the 
loan program, that's basically unlimited. I think we need to 
look at doing some kind of a targeted program for those loan--
the loan program.
    I recognize, at the same time, that the South needs to be 
appreciated, if I can put it that way. We need to--we need 
their support to pass the farm bill, so I know it isn't--it 
isn't easy to pick a number. But I do know that we can't 
continually stand the bad publicity of people manipulating 
rules and collecting amounts beyond congressional intent.
    On the second part of what I have to say, and I'll try to 
keep within my time--or I will keep within my time limits, I 
suppose this message, Senator, is maybe really more for farmers 
and ranchers and my--my fellow farm leaders at this table and 
other places, and that would be a message that there's a lot at 
stake for farmers and ranchers in a new farm bill. There's a 
lot at stake in this election because the upcoming Congress 
will write the new farm bill.
    We've done quite well in agriculture in North Dakota since 
2007. There have been exceptions, and I know there will 
probably be some of you who will call me right after this 
meeting and tell me that you're an exception, but, generally, 
since 2007, we've had pretty good production, we've had pretty 
good prices, we've done quite well. We shouldn't allow that to 
lull us into complacency. We shouldn't--we shouldn't, if we're 
kind of so-called fat and happy, not pay attention to what's 
going on as we write a new farm bill because historically we 
need it. And I have lived through at least three times when we 
thought we were in a new plateau and a new era when prices rose 
and we thought this is going to continue and every time we 
thought that, we've been proven wrong and it's come close to 
bringing us to disaster: The late 1970's, one case; after the 
1996 farm bill, another case. We thought the future was paved 
with gold. We overproduced, we wrecked the markets, and we had 
nowhere to turn because all we had gotten in that 1996 farm 
bill were decoupled payments. And I spent the next four or 5 
years as the new president of North Dakota Farmers Union going 
and trying to get emergency payments or disaster payments, and 
that wasn't any fun, and I--I don't want to go back to that. So 
let's not take our eye off this farm bill.
    And I think, further, we need to tell voters about farming 
and tell them what a good deal for them that ag programs are, 
not just for farmers, but for the whole country. And I'm 
worried about the revival of antigovernment sentiment, which 
has sort of morphed now. Nothing new about antigovernment 
sentiment, I guess, but the fact that it's kind of morphed into 
a political movement is new. It's not wrong. It's not wrong for 
citizens in a democracy to take their goals and try to make a 
political movement out of it. There's nothing wrong with that. 
But I think there is wrong--something wrong with the sentiment 
that's behind it or the assumptions or the history that they're 
trying to show.
    Their cry is get the government out of everything, 
deregulate all economic activity, including agriculture. To 
them, I would say when was the last time that agriculture let 
you down? When was the last time you went hungry? When was the 
last time you went to the grocery store and there wasn't bread 
on the shelf, or milk or sugar, or meat in the meat case? Well, 
the answer is never. Ag has never let you down.
    Why is that? It's because almost since the founding of this 
country, we have had the Federal Government involved in 
agriculture. In the early--very early 1800's, of course, we had 
the Louisiana Purchase. President Jefferson purchased that so 
that--he thought it would be hundreds of years in which farmers 
could move westward. Well, it didn't take us that long, but it 
took us a few generations to populate and--and make 
agricultural land out of the West, including North Dakota. 
We've had, in the 1800's, import tariffs and quotas to protect 
agriculture. In the 1850's we had a giant leap forward with 
government support for ag when President Lincoln established 
the agricultural land-grant university system, college system 
for ag experiment stations, established the U.S. Department of 
Agriculture, I think in 1862 or something like that, and 
created, of course, the Homestead Act that many of our 
ancestors--or predecessors used to begin farming. So we've had 
at least 150 years of very active government involvement in 
agriculture.
    Since then, we've added food inspection services. We've 
added export promotion. We've had programs to manage surplus 
production. We've had dozens of programs to support, preserve, 
and improve ag production in this country, and it has worked. 
We've had a history of using the Federal Government to support 
farmers and ranchers and it has assured consumers of a 
bountiful and affordable food supply. There's nothing more 
important to a society than food security. We have it. We 
should be grateful for it. We shouldn't--if I can use a 
colloquialism, we shouldn't screw it up. It would be extremely 
foolish to threaten that food security by losing a farm program 
in 2012.
    And if we sit idly by because we're contented right now and 
let this nascent antigovernment movement set the agenda for the 
next Congress, we'll pay a heavy price in North Dakota. Let's 
not forget that the last farm bill got passed over President 
Bush's veto twice. Thanks to congressional leadership, we got 
it passed over a veto. So elections do matter.
    Senator Conrad, we look forward at Farmers Union to working 
with you and other Members of Congress as we develop this new 
farm bill, and I'll be happy to, I guess, answer questions or 
assist on that in any way.
    Thank you very much.
    [The prepared statement of Mr. Carlson follows:]

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    The Chairman. Thank you. Next we'll go to Scott Backes. 
Scott, welcome and please go ahead with your testimony.

STATEMENT OF SCOTT BACKES, NORTH DAKOTA FARMER, GLENBURN, NORTH 
                             DAKOTA

    Mr. Backes. Thank you for having this field hearing today, 
Senator. I've been farming in the Glenburn area for 
approximately 35 years, and I'm testifying today in support of 
the farm bill, particularly the last one that you helped pass.
    The safety net has helped farmers re--remain viable. Some 
years, you are going to--in some years in farming, you're going 
to have certain crops don't do well--very well and you're 
simply going to take a loss, but the farm safety net, 
particularly the preventive plant portion of it that was 
implemented after the last farm bill, is used in the event of a 
catastrophic loss of a crop, such as hail, fire, or wind or 
severe flooding.
    And in farming there's always the unknown, such as a 
hailstorm that wipes out two-thirds of your crop or 17 inches 
of rain in 2009 and 30 inches of rain on my farm in 2010.
    If--if--if you don't have a Federal crop program in place 
to cover you in the event of a catastrophic failure, you will 
not survive financially. It cannot be done. Young farmers that 
there's a lot less of these days cannot get loans to--to seed 
their crops unless their father or somebody else is willing to, 
you know, back them up, and that's why that portion of the farm 
bill is very--what I feel is the most important portion of it. 
It helps farmers in the time of catastrophic failures remain 
viable and remain on land, because we have nowhere else to 
turn, Senator. There is no private insurance that will come 
out, aside from just hail insurance, to back me up in the case 
of a failure. And all's we have right now of that portion is--
is what we use and it's not designed to make money on. It's 
designed to give you three-quarters back of your expenses and 
to keep you viable on the land for the next year.
    Thank you.
    [The prepared statement of Mr. Backes follows:]

    [GRAPHIC] [TIFF OMITTED] T8154.366
    

    The Chairman. Well, I think a critically important point. 
I--I just want to stop at this point because I want to rivet 
the point Scott's making.
    We have to preserve crop insurance. Without crop insurance, 
we cannot get financing. What Scott is saying, and I think said 
very well, is if we didn't have crop insurance assistance, when 
we do suffer a crop failure because of natural disaster, what 
happens? Without crop insurance as a foundation, you wouldn't 
get the financing to begin with.
    And the lenders have made this very clear to us. I mean 
just saying testimony I have had on the previous farm bill all 
across North Dakota, the major lenders have made it very clear 
to us without that crop insurance backstop and, frankly, 
without a good disaster program, financing would be infinitely 
harder to get and only those with the highest equity positions 
would be able to secure the financing that's needed.
    So the--the--the point Scott's making here is absolutely 
critical.
    Let's go to Steve Edwardson, representing the North Dakota 
Barley Council. He is the executive director. Welcome, Steve, 
and please proceed.

 STATEMENT OF STEVE EDWARDSON, EXECUTIVE ADMINISTRATOR, NORTH 
           DAKOTA BARLEY COUNCIL, FARGO, NORTH DAKOTA

    Mr. Edwardson. Thank you, Senator, and thank you very much, 
of course, for the opportunity to--to be able to provide 
testimony and--and, hopefully, some facts and figures that are 
helpful as we start to move forward to the--to the next farm 
bill.
    I've basically taken my remarks and tried to put them into 
I hope what is somewhat of a story format. I want to look with 
barley, just briefly review some of the trends we've had, what 
farm policy is toward barley and how it's impacted it, and then 
looking ahead toward risk management mostly through improved 
crop insurance programs because this is the direction that 
we'll clearly need to be moving.
    Just a little history lesson here on some of the trends. 
First off, as far as barley production goes, North Dakota is 
the major player. Thirty-five percent of U.S. production; we 
are the--are the largest producer in the nation. But 
nationally, we have watched our production drop. In the mid-
1980's we produced, as a nation, approximately 600 million 
bushels. In 2010, we were down to around 200 million bushels. 
That's a 65 percent drop in the past approximately 25 years. 
That's--that's significant.
    Acres harvested. Mid-1980's, 11.4 million acres were 
harvested in the U.S. This year, 2.4 million acres harvested in 
the U.S. North Dakota used to raise over 4 million and we're--
we're well under that. Our acres followed a very similar story, 
and we've seen our acres come from, oh, that late 1990's, when 
we thought things would turn around, to a million and a half to 
2 million acres. This year we were at 650,000 harvested acres 
in the state. So we've dropped off.
    And what--what's caused some of this? Well, part of it is 
we've seen less utilization of feed barley, more shifting 
toward corn. We've seen more efficiency in malt extraction, 
malting technology. Competition in the global marketplace for 
feed barley exports has been equally difficult. We've seen our 
own production trends drop. We've dropped--as a state, we've 
dropped 50 percent in our--in our production since 2008. So 
we're starting to see inductive volatility in this marketplace.
    Prices have been volatile as well. I--I found this 
interesting that in January of 2006, malt barley price was at 
$2.10 a bushel in this particular region and feed barley was at 
$1.25. By February of 2008, we were at approximately 5.50 a 
bushel for feed barley and over $7 a bushel for--or up to $7 a 
bushel for malt. Now our trend is similar. We're still in the 
two- to three-dollar range between both crops. So we--we're 
starting to see more volatility in the marketplace, but we've 
got to try to stabilize that somehow.
    If we look at Federal farm program spending, as--as it--as 
you've clearly pointed out, the farm programs are relatively 
minor in the big--in the big scheme of the budget, and of the 
farm program payments, barley is--receives approximately 2 
percent of total farm program expenditures. So we're--we're--
we're down toward the bottom.
    Direct payments, those account for roughly 84 percent of 
the farm program payments that are allocated to barley; and the 
marketing loans, they're a good tool. It was raised from $1.85 
to $1.95 a bushel in the last farm bill and it generates some 
cash-flow while the growers wait for the markets to improve, 
but they're used relatively sporadically. Strengthening and 
rebalancing of that program, it's a good start that we probably 
need to take another look at in this next go-around.
    If we look at our farm bill, trying to harmonize the 
components, we think from a grower's standpoint would--would 
make some sense. ACRE has its place. SURE has its place. The 
loan programs, crop insurance all individually provide a safety 
net that, if harmonized maybe a little bit more comprehensively 
and holistically, could provide a--hopefully, something that's 
more stable and secure, maybe a little easier for USDA to 
administer, because we have to look at it through those--
through their eyes too.
    Risk management tools. I think every grower in the room 
would--would agree that without crop insurance, trying to have 
operating capital is just about an impossibility. But we've 
seen a change in barley because in the 1980's the majority of 
barley planted in the U.S. was utilized for feed. Now 
approximately two-thirds of the barley planted in the United 
States is utilized for malting and brewing purposes. And as 
that has shifted, we're shifting in our--our pricing mechanisms 
as well.
    If we're going to integrate that with risk management, 
there's basically three things that we need to consider, and 
this would work for barley, but is a consideration for--for any 
crop in the farm program. Particularly with regard to--that's 
probably a little more barley specific is price. Risk 
Management Agency current--currently utilizes an antiquated 
formula where they take the Chicago Board of Trade December 
corn futures, multiply it by a factor of .821, and that becomes 
the barley price. That's OK, but we need better--we just simply 
have to do new research to re--revitalize that price 
derivation. That decision that was made was right at the time 
of the mid-1980's when you had 10 to 15 million acres of barley 
in the U.S. When you're under 3 million and it's become more 
specialized, that--that factor has to be reevaluated. Corn may 
not be the best proxy crop on comparison. It may be spring 
wheat or something else. So we're starting to actually take 
some steps in that direction.
    Visiting with growers, most will indicate that one thing 
they need to protect is the gross margin. We try to protect the 
yield. We try to protect price or gross revenue by--through 
some type of a revenue assurance with a price-yield 
combination. But being able to protect the margin is absolutely 
critical. And some of the next generation crop insurance 
products that need to be considered and are currently being--
being considered would look at a way to indirectly insure some 
of the energy costs because the volatility occurs in the 
fertilizer, the fuel, a lot of those particular areas where 
growers just have absolutely no control over it. Think of the 
fuel price spikes in 2005 and what that did to a lot of people, 
especially at harvesttime.
    Mar--margin coverage concept for spring wheat. Currently 
we've got something like that in the development, and that's 
largely thanks to the efforts of yourself and Congressman 
Pomeroy in changing Section 508(h) of the Ag Risk Protection 
Act of 2000, and we got that changed through the last farm 
bill. That was--that was critical and--and, as growers, we 
thank you for that. That was--that's--we're starting to get a 
good step in the right direction. But as spring wheat achieves 
something, it will be good for the other crops. We think barley 
needs to have something similar, maybe not identical, but sim--
similar.
    Finally, disaster. Don't have to tell the growers in 
Renville County that--I know Scott would probably like to have 
lakefront property on his 17 inches of--of--of rain, but 
probably not right out his backyard. We know those 
environmental conditions, it's beyond the growers' control. 
There's not much--there's nothing they can really do about it. 
SURE is a very good step. Taking SURE and harmonizing it a 
little bit more closely with crop insurance may provide that 
balancing act that--that we need to get this to move forward in 
a--in a good, positive manner.
    Holistic safety net, absolutely critical, and the risk 
management products, coupled with our current system, we're 
guardedly optimistic that we're looking at a good future, but 
we--we do need the safety net in place.
    So with that, I close. I thank you for this opportunity. 
I'll entertain questions.
    [The prepared statement of Mr. Edwardson follows:]

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    The Chairman. Thank you. Thank you, Steve, very much. 
Excellent testimony.
    Let's go next to Larry Neubauer, U.S. Durum Growers 
Association President. Welcome.

  STATEMENT OF LARRY NEUBAUER, PRESIDENT, U.S. DURUM GROWERS 
              ASSOCIATION, BOTTINEAU, NORTH DAKOTA

    Mr. Neubauer. Thank you, Senator Conrad, for the 
opportunity to testify today. I'm going to--I represent durum 
today. I want to point out that I am a third-generation farmer 
from Bottineau and I have four children, all of which have 
participated in crop production in their years coming up 
through high school, junior high, and on. This particular year, 
I can honestly say that three of my sons out of three raised 
durum, so we have a perspective. I guess I believe in promoting 
durum.
    One of the biggest concerns that durum has been focused on 
in the last several years is the declining acreage that's been 
seeded of durum in the United States, primarily in North 
Dakota. And there is a factor that has been responsible for 
most of this and it is Fusarium head--head blight or scab.
    There is not a genetic answer to this yet for durum, as 
there is with spring wheat. So our association looked in--very 
hard trying to find ways to lower that risk or offset the risk 
or some opportunities here to ensure that durum would be 
produced in North Dakota.
    Historically, North Dakota produced 90 percent of the durum 
in the United States. Currently, we are down to just under 70 
percent. The decrease has been in North Dakota. The Desert 
Southwest has maintained their acres.
    Not only is durum important to us as producers, but to the 
state of North Dakota. North Dakota mills more than 85,000 
bushels a day of durum and--and is the home to several pasta 
plants.
    A little background on Fusarium and our efforts to combat 
the problem. I'm going to address you, Senator, and with thanks 
for championing our Durum Wheat Quality Program in the last 
farm bill, and not only getting it in the farm bill, but the 
efforts of you and your staff. I have to personally mention 
John Fuher. And----
    The Chairman. Gee, I wish you hadn't done that because I'm 
just in salary negotiations with John and, you know, anything 
positive you say about him here will probably be thrown right 
back at me when I get back.
    [Laughter.]
    Mr. Neubauer. He has--he's been very helpful.
    [Laughter.]
    Mr. Neubauer. There, John, I told him I would take--told 
you I would take care of you.
    [Laughter.]
    Mr. Neubauer. Also with your--the efforts of your 
colleagues. Senator Dorgan has been very helpful in the money 
side of getting this program.
    This program was authorized for $3 million this particular 
year. The regulations finally got put in place for 
implementation of this program this summer. This is a very--in 
the heart of durum area. There are probably several producers 
here that has used the Durum Wheat Quality Program this year. 
We look forward to the continuation of this.
    We do hope that in the next farm bill that this program 
could be continued, and I guess it's our request if there is 
some way that it could be with the lack of having to have 
annual appropriations requests because what--for the people in 
the--here, we annually request--make a request with 
applications and go through the process and a lot of times a 
decision from Washington on how much of the up to $10 million 
that's in the program, farm bill, how much of that will we get, 
and it's difficult to take to the producers. It's--you know, 
the producers want to know when it's fungicide application 
time, ``Is''--you know, ``Is this program in effect? Will there 
be dollars here for me this year?'' So--and I have not heard 
any final data on--on how many request dollars there were this 
year, if the $3 million was consumed. I assume it is and look 
forward to more usage of it in the future.
    Another factor declining--or contributing to the decline of 
durum production was the lack of adequate price coverage and 
crop insurance products for durum. Steve highlighted some of 
these crops and--and the problem of price coverage. One thing 
that--that the Durum Growers have done is we went to RMA and we 
talked to them, explaining to them that historically durum has 
a price premium in the marketplace over spring wheat, and their 
factoring or their formulas for determining pricing of these 
price selections for durum kind of got muddled when there were 
no futures for durum in the Minneapolis Grain Exchange.
    So what we did is we did a study. We had Dr. Won Koo in--at 
NDSU went through and--and with the help of the North Dakota 
Wheat Commission and mills in--in the state of North Dakota, 
which we have more than one, and we determined the historical 
price premium for durum, and understanding that, yes, sometimes 
durum is worth less than spring wheat; sometimes it is worth 
more. But historically, we came up with a number in that 16 to 
18 percent.
    So it prompted RMA to do their own study, and in 
conversations with--and dialog with them, they did agree to 
address this. It did not get for the revenue and the APH 
products in 1909 because they have a different time factor of 
when they have to be discovered for their price. But in 1909, 
we did see a 95-cent price premium for durum with the APH 
product of crop insurance. For 2010, the price premium on the 
revenue side was $1.03 a bushel and on the APH side was $1.10. 
And they have indicated to us that--that they have their--their 
formula. They won't, of course, disclose what it is, but they 
were comfortable going forward with this and, needless to say, 
there was a lot of scrutiny that they come under before 
approving it.
    I think that maybe this is something for barley to look at, 
malt versus feed. I mean there are some examples that we can 
learn from each other on.
    I think that both of these policy and program changes can 
encourage and incentivize farmers to raise durum.
    You know, pasta industry, we think of here locally where we 
have some in-state pasta. We have limited knowledge of out-of-
state. There are actually pasta milling industries in Arizona, 
California, Montana, North Dakota, Wisconsin, Missouri, 
Virginia, Iowa, South Carolina, and Minnesota. And I think it's 
important for all commodities that we look for these states and 
these key people that can provide assistance for these. It's 
not just the raw product. We have to look into the--the end 
product or into the industry side of it.
    One thing that, I guess, looking at the--what we'd like to 
see going forward is we, too, voice adequate crop insurance 
coverage. There is some concern that crop insurance quality 
factors don't necessarily mirror those used by the government 
for loans and LDPs. I do know that falling numbers is going to 
be in--addressed in crop insurance for 2011. That's an example 
of how we can, you know, look at addressing some of these 
differences.
    I had mentioned the Durum Wheat Quality Fact--Program.
    We also support a permanent disaster program, whether it be 
a combination of--of--of current ones that are implemented, but 
I think the--the big message from producers on the disaster 
programs are, whether it's the livestock program that covered a 
lot of losses in two--a little over 2 years ago in the 
Southwest or if it's the SURE program that targeted more on the 
crop side of it, if there's a disaster program, we need to see 
it be implementable soon after the disaster. You know, these 2 
years later created a lot of economic burdens for--for 
producers.
    We have also always advocated higher loan rates. I know 
Steve kind of touched on loan rates for barley, you know, 
indicating a slight increase, but, still, it's just kind of 
temporary.
    One thing that was mentioned last that--for the 2007-8 farm 
bill, there was a mention from the--from leadership to the 
commodity groups, like for wheat, for instance, asking would we 
be look--satisfied with a $5 loan rate? Needless to say, we 
didn't take a $5 loan rate.
    Is this loan rate important? We believe it is. For our 
commodity especially, durum, last year and this year, the 
commodity prices have been less than the loan rate and there 
have been--in 2009, there was over a hundred million dollars 
worth of loan deficiency payments that were paid out to 
producers of durum. That hundred million dollars was very 
critical to durum producers. This year with LDP being a--
received by producers and the fact that durum loan rate is an 
option there for revenue, the--durum believes that the loan 
rate is very important and that maybe the direct payments are 
of much of a less importance.
    It was mentioned here that if the direct payments were--I 
think Robert Carlson mentioned that if the direct payments 
were--were withheld and still kept as far as baseline, but use 
that to fund other angles here for disaster, I guess that's 
what durum would support.
    So we appreciate--appreciate your invite to this hearing 
for us to testify and understand that the environment in any 
congressional arena is leaning continually toward more 
hostility toward ag, and if there's anything that we can do to 
assist or work with other commodity groups, we're--we're fully 
willing.
    [The prepared statement of Mr. Neubauer follows:]

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    [GRAPHIC] [TIFF OMITTED] T8154.434
    

    The Chairman. Well, thank you.
    On that point, let me just say that I think our unity is 
more important than ever before. It is absolutely critically 
important that agriculture America stand together as we work on 
this new farm bill.
    We did in the last farm bill more successfully than I have 
ever seen. It was pretty good the previous farm bill; even 
better in the most recent one. It is absolutely essential. If 
we--if we look ahead here at what we confront, with the budget 
pressure on the one side and the increasing demands to be 
included in the farm bill on the other, because, you know, now 
crops that were never program crops are asking to be included, 
and we're seeing a growing momentum in that direction. We're 
going to see tremendous pressure on the nutrition side.
    So you've put it all together. We face, I think, one of the 
toughest challenges we'll ever have in writing this next farm 
bill. Already we're down, John tells me today, $5.9 billion on 
the baseline. What Robert started by discussing is the 
baseline. That is, if you continued the programs as they are, 
what would it cost? That is the baseline. We are 5.9 billion 
below that already because of the changes to crop insurance. 
And we don't get credit for those savings. That doesn't--that 
money does not come back to us. That money goes into the 
general fund of the United States.
    So we've already lost almost $6 billion off of the 
baseline. The baseline is roughly $140 billion. So we've 
already taken a substantial hit before we ever begin to write a 
new farm bill, and it's important for people to understand 
that.
    Next we'll go to Jeff Oberholtzer, National Sunflower 
Association Director. Welcome. It's good to have you here, and 
I think you're attired in the right color and ready to go.

  STATEMENT OF JEFF OBERHOLTZER, DIRECTOR, NATIONAL SUNFLOWER 
               ASSOCIATION, MOHALL, NORTH DAKOTA

    Mr. Oberholtzer. Yeah, thank you, Senator, for the 
opportunity to speak at this hearing today.
    The National Sunflower Association is a combined grower and 
industry commodity group representing growers from the Canadian 
border all the way to southern Texas. At this time, we have not 
formulated any specific recommendations for the new farm bill--
for the next farm bill, but we have agreed to general 
principles.
    First of all, the board is made up of five--growers from 
five different states and five industry representatives from 
the processors and com--seed company side. We all have agreed, 
too, that the current farm bill is working in providing a 
safety net for sunflower producers and the crops that fall in 
the rotation.
    Obviously, it is much easier to come to a general agreement 
when the environment and when the com--commodity--commodity 
prices are higher than the established loan--loan rates and 
target prices.
    The following are some specific points I'd like to address 
that the board of directors have agreed to.
    The first one is crop insurance. This is the No. 1 tool for 
sunflower producers to use to protect farm income. Further 
strengthening of crop insurance programs will be supported by 
the NSA. We have worked hard to make crop insurance relevant to 
our producers.
    Some key provisions that have made the program more 
workable is the separate insurance programs for confection and 
oil-type sunflowers. Also, RMA maintained the revenue assurance 
program after they initially recommended it to be eliminated. 
Also, RMA increased the revenue value of oil-type sunflowers 
after acreage was shifted to the higher value NuSun type.
    The second one is direct payments. There is a general 
agreement among the board that direct payments should be 
reinvented if this is the lightning rod for farm program 
opponents. Obviously, no one is going to want to give up the 
income stream that comes from direct payments, but if it's 
viewed negatively by the public, then some readjustments should 
be made. We would support redirecting at least a portion of 
these payments to further strengthen crop insurance programs or 
possibly SURE and ACRE programs.
    The third one is counter-cyclical program. The structure of 
this program for minor oilseeds largely eliminates an income 
support for sunflowers. It--this program does have a safety net 
potential, but does need to be redefined. And at this time 
we're not sure if that will be necessary.
    The fourth one is ACRE. Overall, this program has good 
merits and potential, but it does need some tinkering to make 
it more appealing to producers. Participation in this program 
has been disappointing.
    Some suggestions that the board has come up with for 
possible improvements is breaking down state boundaries where 
state geographies are highly diverse. An example of this can be 
northern and southern Minnesota. And also maybe having crop 
reporting districts to more represent the demographics of the 
area.
    And another point is reduce the administration oversight, 
if possible, of the ACRE program. The board did hear a lot of 
producers report that the amount of paperwork required is one 
of the reasons they opted out of the program.
    And adjust T yields to recognize rotation for crops like 
sunflowers where it's only grown every fourth or fifth year.
    The fifth one is the SURE and disaster programs. We have 
not had much experience with the SURE program, but do give 
Congress high marks for putting in a permanent disaster 
program. We do--we do assume amendments can be made to this 
program to make it a better overall program. But we do believe 
the recent commitment of funds to cover a portion of 2008 
losses incurred by some producers is a bad precedent and could 
jeop--easily jeopardize meaningful and needed programs in the 
future.
    The sixth is market loans. This program has proven itself 
as a key provision in providing a safety net. However, the 
established loan levels are too low. We understand budget 
implications and the WTO compliance issues. This has not been 
discussed in detail, but our organization may be willing to 
support a higher loan rate in exchange for reduced direct 
payments.
    Overall, the existing farm program is working well. We are 
sensitive to the amount of money that was taken from the 
baseline and hope that further reductions will not be 
necessary. It is important that all commodities be treated 
equally to eliminate nonmarket planting signals.
    As a young farmer, I am sensitive to what my urban friends 
think of farm program budgets. The future looks very bright for 
production agriculture with record crops combined with record 
demand and attractive prices. But I'm fully aware that 
production and market disasters do occur. For that reason, a 
Federal safety net and insurance program is required to keep me 
producing for an ever-increasing hungry world.
    The Chairman. Very----
    Mr. Oberholtzer. Thank you.
    [The prepared statement of Mr. Oberholtzer follows:]

    [GRAPHIC] [TIFF OMITTED] T8154.376
    

    [GRAPHIC] [TIFF OMITTED] T8154.377
    

    The Chairman. Very, very good testimony. I appreciate it, 
Jeff. I take to heart very much the suggestions of you and your 
board. I think they're right on point, and thank you for it.
    Next we'll go to Ryan Pederson, the Northern Canola Growers 
Association President. Good to have you here.

STATEMENT OF RYAN PEDERSON, PRESIDENT, NORTHERN CANOLA GROWERS 
ASSOCIATION, VICE PRESIDENT, U.S. CANOLA ASSOCIATION, ROLETTE, 
                          NORTH DAKOTA

    Mr. Pederson. Good afternoon. Thank you for inviting us. 
And if I may take a moment--you complimented Jeff's shirt--I'd 
like to compliment Steve on his exquisite eye for fashion, if 
you will.
    [Laughter.]
    The Chairman. I noticed that you guys coordinated before. 
I--I thought we probably should have you two seated together.
    Mr. Pederson. Well, John said this was a dress code, so----
    The Chairman. Well, yeah. Yeah.
    Mr. Pederson [continuing]. In his e-mail, so----
    Mr. Edwardson. Part of the small grains Mafia.
    Mr. Pederson. But, no, thank you again. I'm Ryan Pederson. 
I farm in Rolette, North Dakota, in partnership with my father. 
We do canola, wheat, barley, soybeans, and have done flax in 
the past. I currently serve as President of the Northern Canola 
Growers, Vice President of the U.S. Canola Association. I would 
just like to take a few minutes to share our ideas in the next 
farm bill as we move forward.
    As many of us know, canola has enjoyed good press lately 
for being a healthy vegetable oil and as the country moves into 
the health-consciousness and the trans-fat ban, we need canola 
oil, sunflower oil, and currently we have to import canola oil 
to meet the U.S. demand. Over the past 10 years, canola has 
seen a wide variation of planted acres. This year we had over 
one and a half million acres, similar to what we saw in 2000. 
But during this 10-year period, we have had acres down as low 
as 700,000.
    And if we're going to satisfy this demand the American 
consumers put on our crop, we need to figure out ways to 
stabilize production and increase it, and that's what our 
organization has been working on.
    But we also understand that as Congress moves forward in 
writing the next farm bill, we have a responsibility to make 
recommendations to a farm bill that's going to be defensible to 
the American public and to be efficient. And with that, I just 
have some ideas on the current provisions in the farm bill.
    First, marketing loans. We need to make sure, No. 1, 
they're equitable. As I mentioned, in the middle of the decade 
our acres really suffered, half of what we have now, and some 
of that could be tied into nonmarket signals that were given to 
other crops as far as planting intentions. And we need to make 
sure that as we look at loan rates--and hopefully we're able to 
adjust them higher because right now they're kind of a 
nonfactor in our farm--they need to be equitable so crops are 
grown based on what the market is demanding, not what the loan 
rates suggest. So that would be our suggestion on that.
    The next one, I think the most important one, is crop 
insurance. We need an adequate crop insurance. Crop insurance 
is good now, but there's always room for improvement. You know, 
in this area, it was really hit with spring rain, and for my 
crop, canola, it's not--no crop needs to be mudded in, but 
canola really suffers if you try to mud it in. And we've been 
working with RMA to try to extend the planting dates for canola 
and it's a bit of a struggle. And the struggle with canola, 
it's a relatively young crop as far as genetic breeding. We're 
just now getting into seeding hybrids and as these hybrids come 
onto the market, they can handle summer heat better than the 
open-pollinateds could in the past and we need to work with RMA 
and they need to understand that the genetics are changing so 
we can put our seeding dates later and still expect good 
yields.
    The next one, and when I wrote this, I wasn't sure how the 
rest of the panel would be, and I'm--I guess I'm relieved, but 
it's direct payments. Like Robert Carlson said, we always like 
getting the direct payments, but they are tough to defend, you 
know, and if direct payments need to come out, we definitely 
want them redistributed into risk management, counter-cyclical-
type activity because that's--that's what we're going to need 
moving forward.
    And as far as the ACRE program goes, a lot of farmers I 
talked to said they didn't go into it because it was confusing. 
Some farmers didn't think so, but most of them thought it was 
confusing. You have the state trigger, your local trigger, and, 
as Jeff said, we think maybe let's get--get it more down to a 
smaller recording area instead of just the whole state level.
    And, also, the reduction in loan rates concerns certain 
farmers, so that would be something to look at.
    The Chairman. Could I stop you right on the point on ACRE, 
because I don't want to lose this point, and as I--I think it's 
very, very important for the hearing record.
    ACRE, I think, as a concept, has enormous potential. The 
problem is there is a tremendous difference if it's applied 
nationally, at the state level, or closer to home. The closer 
to home it gets, the more expensive it becomes. That's the 
reality that we have to confront here.
    We had a tremendous fight behind the scenes on ACRE because 
some wanted to impose it as a national program. That would have 
been potentially a disaster for us because we have more 
variability in production than the ``I'' states, Indiana, Iowa, 
Illinois. They would love to have a national program. But you 
think about what it could mean to us. If we had severe losses 
here, but we were being measured by a national standard, we 
might get nothing. We might get nothing. The rest of the 
country does well, we have a disaster, we get nothing. And, 
believe me, these guys understood exactly who was going to be 
the beneficiary and who was going to be left holding the bag, 
those who were advocating and pushing this.
    So we really have to have our heads up when we go into 
these negotiations and into this fight with respect to how it's 
applied. We insisted on at least a state level, and we knew all 
along that we would be better off with a smaller reporting 
subset. I mean that--that really is what you need to have to 
make this program make the most sense. Because even at a state 
level, you could have most of the state do well, one part of 
the state do poorly, and, you know, you not get anything, you 
not get any help.
    So this--this is something that we've got to be very, very 
sensitive to as we go into this fight. And I wanted to make the 
point as you raised it so it's very clear on the hearing record 
that out here we get it. We understand what the implications 
are for us and we're not going to buy a pig in a poke. We're 
not going to have, you know, the big national boys roll in here 
and write us up for a program that then leaves us holding the 
bag if we just have a regional or a subregional failure.
    So just enough said, but I wanted to make sure that's on 
the record at this point.
    Mr. Pederson. Absolutely, and we appreciate it--appreciate 
that.
    Next one is SURE. My only thoughts on SURE, it's--it's 
great to have it in there, but it brings up a point that was 
brought up earlier. As we move forward on these farm bills, we 
need to make sure that our county offices are supported 
adequately. In our county, we still have producers, myself 
included, that don't know if we qualified for the SURE. And 
it's not that they're not doing their job. It's just they need 
to be supported to have the staff and the infrastructure there. 
So these disaster bills or programs, if they come and you get 
the check 2 years later, the damage is already done.
    Finally, I'd like to talk about something of a commodity 
title, but on a conservation title. Programs like CSP have been 
gaining popularity and I can see them as being more easily 
defendable because, as a farmer, in order to qualify for these, 
we need to make capital investments in our farm, whether it be 
different machineries or different planting techniques, and 
they're--they're defendable that way and it's doing what we've 
always done as farmers, taking care of our natural resources. 
But when we look at funding these, we need to make sure that 
the funding there doesn't come at the expense of the commodity 
title and that they aren't--they're not counter-cyclical. So 
they need to be, you know, thought of that way.
    And then the only other thing is when these programs are 
written, we can't punish the producers who are already doing 
conservation, you know, and only give the money to the 
producers who start doing it after the program's out, but----
    In summary, you started the hearing very well in saying 
that North Dakota is as prosperous as you've seen it, and I 
think as farmers, as we help with the farm bill, we can't deny 
that. I think it would be foolish and somewhat selfish to do 
so. But whenever I start feeling too good, Dad reminds me that 
the 1980's weren't that far away. I don't remember them, but he 
does. And he said, ``Things aren't always going to be this 
good, and with the increase in input costs, we're one bad year 
away from having a disaster.'' So our top priority in this next 
farm bill would be risk management.
    Again, I appreciate the time.
    [The prepared statement of Mr. Pederson follows:]

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    [GRAPHIC] [TIFF OMITTED] T8154.379
    

    [GRAPHIC] [TIFF OMITTED] T8154.380
    

    The Chairman. Well, I think--I--I want--the testimony has 
been very consistent here today. I think it's about as clear as 
it can be. One after another of you have testified risk 
management is at the top of your list. Risk management. Witness 
after witness, risk management at the top of your list, and it 
really has to be.
    You know, it's always hard to know what we will confront 
when we go into a farm bill fight, but I don't think this farm 
bill is going to get any easier to write the more we wait.
    We always have those voices in a farm bill fight who say, 
``Wait. Wait.'' And in the last two bills, if we'd have 
followed their advice, it would have been a disaster for 
agriculture because in both cases, the money dried up, and had 
we waited, we would have been left with far less than what we 
were able to achieve.
    So I'm always very wary of those who counsel and suggest 
that we ought to delay, and I believe it's true again this 
time. We simply cannot wait.
    The thing with the budget of the United States is only 
going to get worse. What I mean by that is the pressure is only 
going to build because we're going to have to do more and more 
to rein in bud--budget deficits and debt as we go into the 
outer years. The next 2 years, there's going to be less 
pressure because people understand if you cut too quickly, you 
endanger putting the economy back in a recession. So we're 
probably going to get the best result sooner rather than later.
    And one thing I'd like to do is go to each of the witnesses 
and talk a little more about ACRE and the basic concept of a 
revenue program. A number of you--I think, Steve, you mentioned 
this, you used the word ``harmonize,'' as I recall. What do you 
mean by that?
    Mr. Edwardson. If you look at--if you look at ACRE, you 
look at SURE, you look at crop insurance, you look at direct 
payments, you look at the marketing program, each one in and of 
itself is a safety net in its own right.
    The discussions that we've been having amongst barley and 
others as well, if you have five general components that are 
attempting to do the same thing, but shore up the--the safety 
net in a different manner, is there a way to have those 
harmonized a little bit closer so that, one, there's no overlap 
in it and, No. 2, any program that would be maybe a little bit 
administratively cumbersome, you could remove that by letting 
one of the other programs provide the strength. So if you're--
if you're going to have a true net, all five of them, or six 
components, however you wish to view it, is fine. It's just a 
matter of looking at some of the administrative efficiencies in 
it, and that--that's one of the first steps I think we have to 
take.
    ACRE conceptually is a very good idea, and as--if I--if I 
look at it from an Iowa corn and soybean farmer where your 
variability of production is relatively minimal, it's a fairly 
straightforward thing. If I'm a North Dakota farmer that raises 
nine different crops, I've got a battle on my hands because 
that program is incredibly farm specific. You just can't give 
a--it put FSA in a very difficult situation because you cannot 
make an absolute blanket recommendation for all growers. Each 
grower had to sit down and try to almost outguess what the--
what the future was going to be, and I know my crystal ball is 
usually pretty cloudy, so it--it's difficult.
    The Chairman. OK.
    Mr. Edwardson. But that--that's our take on it.
    The Chairman. OK. I--I'd be interested in others' take on 
it, and then the reason I--I raise this is because conceptually 
it seems to have great promise and great potential, 
acknowledging the special challenges that we have here with any 
revenue assurance program. The--the concept of taking these 
disparate programs and harmonizing them in the sense of taking 
the resources and providing a program that is directed at 
assuring a revenue stream has at least superficially an 
attractiveness to it.
    Any other observations on that? Yeah, Larry.
    Mr. Neubauer. Senator, Larry Neubauer with the U.S. Durum 
Growers. We have discussed this as a board and a lot of the 
input that we get from our directors back, several concerns. 
One is that most of the crops up here that we raise--I mean on 
my farm, we raise five or six different crops in a rotation, 
and determining your--your yields are difficult when you don't 
get credit for consecutive--you know, the requirement for 
consecutive years of production for yield, and we might only 
have that crop on there once out of every three, 4 years.
    So it--it leaves a--a gap there of which we don't actually 
get credit for. We still have--we feel that we have our 
production, our yields, whether we raise them once out of 5 
years or if we raised them every year on the same unit.
    Another--another issue that comes up, I have 13 different 
landlords. Try to explain it--it was confusing. I--I couldn't 
really comfortably explain it to any of them. But the fact that 
it was locked in and that no changes in decision could be made 
rightfully scared a lot of them away and scared me from 
actually even introducing the topic to some of them.
    So I think, you know, there's continual change in not 
necessarily land ownership, but operating or--and that locking 
in is--is a very difficult thing, looking into the future, with 
a--without a clear crystal ball.
    The Chairman. Yeah, let me just say that as is, it's not 
the answer, but I tell you, I think there's going to be 
heightened interest in revenue assurance-type programs going 
forward for some of the reasons that Steve mentioned in talking 
about the need for harmonization because when you have these 
different attempts to provide safety-net treatment, there is 
complexity in that. There is confusion in that.
    Now, ACRE as it is has its own set of confusions and its 
own set of complexities, and I don't think, unless it is 
dramatically improved, will it be very attractive to people 
here. I mean what--what you just said is what I've heard all 
across the state of North Dakota, just too confusing. But the 
concept--the concept of a revenue assurance program is really 
what I'm trying to get at. Does it have appeal? Is it something 
we ought to pursue and see if we can perfect? That's really the 
question I have.
    Robert.
    Mr. Carlson. Well, we think a revenue program really has 
some merits, like you say, and--and that ACRE is worth working 
with. There are problems with it. The biggest one being--well, 
I think actually two of them are big problems. The biggest 
problem, perhaps, is--is that the--the--the trigger beyond your 
farm's trigger, the next trigger being the state, it--it's just 
too big of geographical area, like you say. Maybe the counties 
are too small for that to be cost effective. So what could be 
in between? Somebody in this panel suggested in their written 
testimony that it might be the crop reporting districts, of 
which there are nine in North Dakota. That--that's an 
interesting idea and that might be worth doing a little 
analysis on. So that's one issue.
    The Chairman. Who--whose testimony was that, crop 
reporting?
    Mr. Pederson. Jeff's.
    The Chairman. Jeff.
    Mr. Carlson. The----
    The Chairman. I saw that too.
    Mr. Carlson. Yeah. The other one is--is just plain 
information. Our organization did some information sessions on 
it, along with the FSA director, last year and there's just a 
lot--there's a lot of confusion about it. What Larry mentioned 
as far as the landlord is a really big issue. To go to an 
elderly landlord that you're maybe cash renting from and try to 
explain the SURE program is--well, it's just about impossible. 
So--so the administration part of it needs to be simplified.
    The other part is that it's got kind of a--in parts of 
North Dakota, it has a bad reputation now because for durum 
producers in northwest----
    The Chairman. You're talking about ACRE now?
    Mr. Carlson. ACRE.
    The Chairman. Yeah.
    Mr. Carlson. In northwest----
    Did I say something----
    The Chairman. You said SURE.
    Mr. Carlson. I meant ACRE. I'm sorry.
    The Chairman. I thought maybe you were trying to confuse 
me.
    Mr. Carlson. Well, I know that would be impossible, so I'd 
never try. No, I meant ACRE.
    And the other part of ACRE that--that gives it a little bit 
of a bad reputation is that in northwestern North Dakota some 
producers who were primarily durum producers signed up for ACRE 
thinking that their loan deficiency payments that they were 
eligible for would be reduced by 30 percent. They didn't 
understand that the loan rate, the top rate, would be reduced 
by 30 percent. So we had some calls at our office from some 
people that were pretty upset about that and as--you maybe 
heard about Montana. That happened there too.
    The Chairman. Mm-hmm.
    Mr. Carlson. So----
    The Chairman. And it's not hard to understand.
    Mr. Carlson. It's got some hurdles to--it has some hurdles 
to overcome, and you're right; your--your bottom line that it's 
not a good alternative the way it is is correct, but I think a 
revenue program is really worth working on.
    The Chairman. You know, one of the things we've talked 
about is holding--you--you remember preparation for the 2008 
farm bill, I held a summit, an agricultural summit. We had some 
of the top agricultural economists in the country. We had Larry 
Combest, the Chair--the former Chairman of the House 
Agriculture Committee, here and it was really a good kickoff to 
the national farm bill debate. We had all the top agricultural 
publications in the country there at that summit. We had 26 
Ph.D.s providing ideas, not that Ph.D.s have all the ideas on 
agriculture, but, certainly, there was a lot of out-of-the-box 
thinking that was helpful, I think, as we zeroed in on what we 
could actually achieve in the farm bill.
    We've been talking about having a--an agriculture summit 
next year here in North Dakota, bring in the major players from 
the committee, from the commodity groups, and really start 
talking about things we need to have more time to consider 
before we actually start writing the bill. And we--we talked 
about possibly doing this in the spring of next year. You know, 
re--remember, our--our summit leading into the 2008 farm bill 
was done in the fall. We--we need to consider when it's done. 
But I--I think it's absolutely essential that we provide kind 
of the thought leadership as well on writing that next farm 
bill.
    Any other observations from the panel? Anything that 
somebody heard somebody else say that they want to react to or 
anybody else have a--an observation with respect to a revenue 
program and whether that's worth pursuing at least conceptually 
as we prepare for the run-up to the next farm bill?
    Mr. Neubauer. I--I guess I would. I probably didn't 
directly state, but that's--the ACRE program was of a great 
interest to--to myself as a producer and to others that I'm 
aware of that I've talked to, and the--the concept of 
simplifying to, as Steve's indicated, you know, one type of 
safety net, but be it based on revenue of some--some structure, 
is, I think, producer-accepted widely across the state.
    The Chairman. You know, the devil's in the details, isn't 
it? I mean, really, the devil is in the details. That program, 
the way it is, is just too--you know, the distance between your 
farm gate to the state border, that doesn't work. But, you 
know, here--here's what we were faced with. We were faced with 
those who were trying to impose a national. I mean you talk 
about a big distance between, I know, our individual farms and 
the national borders. I mean, boy, I tell you, there--there's 
room for a real disaster for a state like ours that has so much 
variability.
    You know, the ``I'' states are just very different than we 
are. The ``I'' states, Indiana, Iowa, Illinois, they have much 
less at--at risk. Their crop insurance, totally different 
circumstance. And remember what they tried to do to us in the 
last farm bill. They tried to pull themselves out of the 
national insurance program, have a separate risk pool just for 
them. Well, wouldn't that have been sweet? And I said to them 
during the discussion, I said, ``Now, let me understand this. 
You want to take your low-risk situation, remove it from the 
pool that all the rest of us are part of, and then what happens 
to us and what happens to our rates?'' Do you know what their 
answer was? ``Nothing will happen to your rates. You'd all be 
ratable. It all will be treated''----
    And I--I said, ``Look, I may look like I don't get it, but 
I think I do. I think I know exactly what you guys are trying 
to do. You're trying to put yourselves into a preferential pool 
and leave all the rest of us out there with much higher levels 
of risk, much higher rates, much higher costs, and''--``and,'' 
you know, ``we aren't going for that.'' I mean we're the United 
States of America. We're not the Separate States of America, 
and we're not going to have a risk pool that's just the ``I'' 
states and all the rest of us are off on the side. But that's 
exactly what they tried to pull off in the last farm bill and, 
thank God, we were able to stop them.
    Any other--yeah, Scott.
    Mr. Backes. One other thing that doesn't pertain to 
insurance, but in writing the next farm bill, I'd like to see a 
clarification that would help me out in the wet years on Type 1 
wetlands, what is consistent sheetwater on my farm. I don't 
con--consider it a Type 1 wetland, but the government does. I 
believe this needs to be changed so we can move some of this 
sheetwater in times of torrential rains, either on the lowland 
or move it downstream. We need to have them basically make a 
redetermination of that.
    The Chairman. You know, let me just say it is one of the 
most frustrating parts of writing a farm bill because our 
experience with the realities of some of these definitions is 
so different from others in other parts of the country who have 
a different agenda. Let--let's----
    Mr. Backes. Mm-hmm.
    The Chairman [continuing]. Let's be very direct. They have 
a different agenda. And being able to--to move sheetwater, to 
me, is just common sense. But you know the fight that we have 
and it is a--it is--you--you--you talk about some tough fights 
that go on behind the scenes, these are the toughest of them 
all. I wish Scott Stofferahn was here. Scott, I think all of 
you know, was one of my two lead negotiators on the last bill, 
and we fought this behind the scenes for weeks and weeks and 
weeks.
    And, you know, the original Swampbuster--somebody was, 
yesterday, criticizing former Senator Andrews to me because 
Swampbuster got in the 1985 farm bill. And I said, you know, I 
went back and reviewed the record when I got to Senate 
Agriculture Committee to see if Senator Andrews had somehow let 
us down or misunderstood, and he did not. He was misled. He 
asked very directly in testimony before the committee, ``Would 
Swampbuster apply to North Dakota?'' He was assured in 
testimony that it would not. Well, we all know what happened. 
When the regulations were written, all of a sudden it did apply 
to North Dakota.
    So, you know, it's not my job to defend former Senator 
Andrews who I defeated in election in 1986, but in fairness to 
him, he was absolutely misled. He was told directly it would 
not apply to North Dakota.
    Mr. Backes. Mm-hmm.
    The Chairman. So we know. The--there--these people have a 
different agenda and--and, you know, they are--they can be very 
unreasonable in terms of the application and--and the result 
when we're out here on the farm and we're dealing with overly 
wet conditions, you know, I--I don't think they really 
understand the impact of the regulations they're imposing on 
us. But they're not reasonable.
    Mr. Backes. Those regulations were mostly brought on by 
direct aid payments. Once you don't have the direct aid 
payments anymore, you know, I wonder what they're going to 
start thinking if--you know, they're going to have to tie it to 
something else.
    The Chairman. Yeah.
    Mr. Backes. And that would be unfortunate if they were able 
to do that.
    The Chairman. Well, let's not--let's not--let's not help 
them figure that out.
    [Laughter.]
    The Chairman. I--this is one of the things we've got to be 
prepared to deal with in this next farm bill, to try to--look, 
we all understand there is a conservation ethic. I think we all 
share it. We believe in it. It's important, but it's got to be 
reasonable, you know. It--it's got to make some common sense. 
And some of these things defy common sense.
    Let's open it up to those who are in the audience. If 
there's anybody here that would like to testify, make a 
comment, we'd be happy to give you that opportunity at this 
point. Anybody that wants to be recognized, wants to give us 
some observations about writing the next farm bill, we'll be 
happy to listen.
    Senator O'Connell, good to have you here. Welcome.

   STATEMENT OF HON. DAVID O'CONNELL, NORTH DAKOTA SENATOR, 
                     LANSFORD, NORTH DAKOTA

    Senator O'Connell. Welcome to District 6, Senator. 
Excellent testimony you had here today. And Scott and I, our 
operations are about three miles apart, so I get all his 
sheetwater, you know, so----
    [Laughter.]
    Senator O'Connell. But all kidding aside, just so you're 
aware, some of the conditions that we faced in Bottineau and--
and Renville County up here is basically, I don't think a 
bushel of grain was ever trucked out of the field. 
Representative Hunskor is sitting here too. He runs a grain 
cart for our operation. And the grain carts have been stuck and 
there's a--a contractor from Maxbass that works in the oil 
field. Their winch truck has been out, and Scott can testify 
better to what I'd have because he's around the guys more than 
I am, that winch truck is out every day just about all day long 
because four-wheel-drive tractors can't pull these combines 
out.
    So, again, all the low areas are full of water yet, 
Senator. Normally we combine through them, but they're all full 
of water, and the sheetwater has flooded out. In my area, at 
least a third of the crop has been drowned out and you can't 
even get in there. I was on a payloader on Saturday. One scoop 
in and I dropped the front wheels all the way--way in. It took 
a four-wheel-drive tractor with triples on to get me out. So 
that's the kind of conditions we've got this year.
    By next summer or next spring with prevent plant and 
insurance, it's really going to be critical to--to this area. 
Quality control is going to be--quality is going to be another 
big area. I just helped a neighbor combine. Winter wheat had 
been laying on the ground for two--for 2 months now in windrows 
and it's green in the windrows that you're trying to pick up. 
So quality loss is going to be a big--a big area again.
    I don't know if rural water is going to be in the farm bill 
this time, Senator, or not, but the two ladies sitting in 
front--front of me from District 7, we were in Berthold last 
week and the NAWS project to bring rural water up through this 
whole area is really critical, Senator, so just to--I don't 
want to get you off--off track here, but----
    The Chairman. Don't get me started.
    Senator O'Connell. No, we won't.
    The Chairman. You know, we just had 2 days of negotiations 
with our Canadian neighbors to the north on NAWS, on Devils 
Lake, and other vexing water issues. The--the--the dike that 
they call a road up in Canada and on the northeastern part of 
our state, we showed them pictures of that road that they've 
got signs up don't drive on it. They don't want to drive on it 
because it's not a road. It's a dike. It's just as clear as it 
can be. Forty-four miles long and it's blocking the water on 
the North Dakota side.
    And NAWS, you can imagine the exchange going back and forth 
for 2 days on NAWS and Devils Lake. And, you know, this was a 
negotiation with the Ambassador from Canada, with the Premier 
from Manitoba, with the American ambassador to Canada, and the 
Governor and Congressman Pomeroy and Governor--Senator Dorgan 
and myself, and it was very, very intense and very intense on 
both Devils Lake and NAWS.
    Look, we--we think we've put in place the best treatment of 
water on NAWS and that water would go in an enclosed pipeline 
to a treatment facility that would deliver drinking-quality 
water. Now, that's the fact.
    And what they want to do is they want us to treat the water 
before it goes in the pipeline to drinking-quality status, then 
pipe it in a pipeline and treat it again. Wow! I mean you think 
about that. I said, ``Well, do you guys want to pay for it? I 
mean if this is so important to do, why don't you pay for it?'' 
And it gets pretty quiet when that gets to be the choice.
    Let me just say that I'm very aware of the conditions that 
you've had here. Really, some of the most difficult conditions 
in the state this year are right here. It's one of the reasons 
we wanted to come here for the first farm bill hearing.
    Others who might want to testify? Yes, sir.

     STATEMENT OF DEL GATES, DIRECTOR, U.S. DURUM GROWERS 
ASSOCIATION, AND DIRECTOR, NORTH DAKOTA CROP IMPROVEMENT & SEED 
               ASSOCIATION, MOHALL, NORTH DAKOTA

    Mr. Gates. Senator Conrad----
    The Chairman. If you could----
    Mr. Gates. --Del Gates.
    The Chairman. Yeah, if you'd identify yourself for the 
record so----
    Mr. Gates. Yep, Durum Grower Director, State Crop 
Improvement Director.
    One of the true--and--and I've had both. We've had prevent 
plant before and, well, we've had drowned-out. We've had to 
where you can seed wall to wall and everything. But one of the 
true tragedies of the--the crop insurance program is no 
protection on these drowned-out areas. That--you've got all the 
expense into it and there--there is a point in time where you 
do stop seeding. Because of prevent plant, the program, the 
benefits you can get from it, you say, ``Well, the heck with 
it,'' when there is people that are still trying to seed and 
then the rains come and drown that out, which there is no 
protection over.
    If you have 160 acres and lose 80 to--to drowned-out that's 
there, now you take your yield of 80 acres times that and--and 
produce that off 160 acres you've seeded. So that is a true--
true disaster all in all, and we need something to cover that, 
whether we've got--we can buy up to 70 percent on prevent 
plant, virtually, and you're a hundred percent coverage if 
you're fully seeded. Well, maybe there needs to be an 85 
percent or something in there to make the person go seed and 
try to get it. There needs to be a coverage in there for what 
drowns out.
    The Chairman. Yeah, I--I think you're exactly right. You 
know, all of these things get to be a negotiation where we've 
got a dollar amount we've got to hit; all right? And I can tell 
you we looked at 85 percent and we could not afford it in this 
bill. We set a standard early on that this bill had to be paid 
for. We're not going to add anything to the deficit. Nobody's 
going to be able to come and say to us, ``You in agriculture 
added to the deficit.'' And so that's really where this fell 
out because, obviously, if you have that intermediary step, 
it's additional cost, and, you know--but it makes perfect 
sense. We'll fight very hard in the next to try to--to provide 
that kind of intermediate step.
    Mr. Gates. One other point, I think, in this harmonization 
talks of all of these mechanisms working. I go back, I guess, a 
little bit to--to 2004 when we were down in your office with a 
disaster and then we were having such a hard time with RMA 
coming there and not listening to us when we wanted to separate 
the durum and the wheat yields out. They wanted to separate, 
but we still couldn't get identified yields on each one of 
those.
    The Chairman. Right. I remember it very well.
    Mr. Gates. Yep. And then in 2004, we had a teleconference--
--
    The Chairman. We actually got the RMA director fired over 
that.
    Mr. Gates. Well, we did that, yeah, but we also had a 
teleconference and that's what I--I tried getting that for so 
long. There had to be a board of farmers. And I think it was in 
August of 2004, we got a teleconference with the board that was 
crop improvement and they went down their list, and Keith 
Collins happened to even be sitting in there----
    The Chairman. Yeah, I remember that.
    Mr. Gates [continuing]. In the--in the room, yeah, as we 
were talking to him on the phone. But one of the things, the 
tobacco person says, ``Well, I'm a South''--``from South 
Carolina''--``Carolina. I'm a tobacco grower.'' And the one key 
one--everyone an--announced what they were, but one of the key 
ones was this guy from Iowa. He was a corn and bean farmer. And 
that's kind of the one I wanted to identify with. I said--
introduced myself then. I said, ``I'm Del Gates from Mohall, 
North Dakota, but,'' I said, ``I can't identify myself as a 
corn and bean grower because North Dakota is No. 1 in 14 
different crops and,'' I said, ``it's not by not growing 
them.''
    And little did we know that we would end up coming with T 
yields then. But he was the key one and I--I said--you know, I 
said, ``When you buy a quarter of land,'' I said, ``80 acres is 
seeded to''--``to beans and the other 80 acres is to corn 
and,'' I said, ``you rotate that so your history in 5 years is 
huge,'' you know. And I said, ``We don't do that. So,'' I said, 
``we need some other mechanism of backing.''
    Similar to like you say with the crop insurance. They want 
to be alone. Well, that's the part. Same with this ACRE 
program. I think we do need, now that we've got T yields, maybe 
go back to the farm. It may be a little bit--look a little bit 
complex, but the harmonization, we've got crop insurance to the 
farm----
    The Chairman. Yeah.
    Mr. Gates [continuing]. You know, to harmonize this and get 
it back to where the true economic return does come from so it 
is on how the producer does his job.
    The Chairman. You know, let me say this because I--I think 
it's an important point. Technology is going to change 
everything. With better technology, I think we're going to be 
able to get back to on a farm basis, which is really where it 
belongs, because then you're really--you're--you're--you're 
really at where the rubber meets the road. But we're not there 
yet. I mean, USDA's computer systems are in dreadful shape. You 
know, there was no money put into them for years and now we've 
got a lot of catching up to do. But with technology, we're 
going to be able to really fine-tune things in a way we haven't 
been able to do in the past, but it's going to take time, and I 
doubt very much it will be done in time for this next farm 
bill.
    Yeah----
    Mr. Gates. Even----
    The Chairman. --Del.
    Mr. Gates. Even if we could on those drowned-outs, just 
another thought, go to our T yields or something on that, get 
coverage for T yields on--on those--you know, those areas or 
whatever. Get the T yield at least thrown in----
    The Chairman. Yeah.
    Mr. Gates [continuing]. Instead of the actual yield going 
across----
    The Chairman. Yeah.
    Mr. Gates [continuing]. The whole----
    The Chairman. Yeah. No, I--I get it. It's a very good--it's 
a very rational point.
    Mr. Backes. Del, was--wasn't 1 year they had flooded acres 
program? Didn't we have 1 year of that at one time here several 
years ago and, I don't know, whatever happened to it?
    Mr. Gates. Well, I think if we could get--get declared a 
national disaster, then doesn't that flood program kind of kick 
in and then we'll be able to go back and----
    The Chairman. Yeah.
    Mr. Gates [continuing]. Kind of get credit?
    The Chairman. Yeah.
    Mr. Gates. But it has to be a national, if I'm not 
mistaken.
    The Chairman. Got to be national.
    Mr. Backes. You know, it can't be a statewide?
    The Chairman. Right.
    Mr. Backes. It's got to be a national?
    The Chairman. Right.
    Mr. Backes. OK. That's why.
    The Chairman. And God forbid we have a national. You know, 
let's pray we don't have it.
    Any other--anybody else that wants to provide testimony, 
give an observation? We want to make sure that everybody has a 
chance.

   STATEMENT OF BECKY BRAATEN, INSURANCE AGENT, FARM CREDIT 
        SERVICES OF NORTH DAKOTA, WESTHOPE, NORTH DAKOTA

    Ms. Braaten. Senator Conrad----
    The Chairman. Yeah.
    Ms. Braaten. --Becky Braaten with Farm Credit.
    The Chairman. Yeah.
    Ms. Braaten. I know several of the panel members have 
already addressed this, but I think the preservation of crop 
insurance is extremely important. Crop insurance already gave 
with the--you guys addressed----
    The Chairman. Oh, yes.
    Ms. Braaten [continuing]. This 6.9 billion off of the 
baseline, the SRA----
    The Chairman. Yeah.
    Ms. Braaten [continuing]. Negotiations.
    The complications that have come with crop insurance, the 
regulations, I think it's critically important that we maintain 
the program. It does work. Yes, there are some things that need 
to be addressed, like prevent plant, the drown-out acres. But, 
again, the SRA negotiations, crop insurance already gave.
    The Chairman. We already gave at the office.
    Ms. Braaten. Exactly.
    The Chairman. And we gave big-time----
    Ms. Braaten. And I appreciate you----
    The Chairman [continuing]. In terms of the baseline.
    Ms. Braaten. In terms of the baseline.
    The Chairman. In terms of the baseline, right.
    Ms. Braaten. Yes. Exactly.
    And I think it's critically important that we maintain the 
delivery service of the crop insurance program. I think if you 
talk to any of the farmers, competition is important, not only 
to keep the companies, but also the agents. And it's a very 
complicated program, and I think Ryon can attest with me here 
that coming into a year of the COMBO policy, it's not as easy 
as everybody says. Definitions have changed. Malt barley has 
changed. There's a lot of things out there, and I think we need 
to keep that service out there and make sure that the agents 
are in business to help all of the farmers, so----
    The Chairman. Well, that's an important point.
    Anyone else?

STATEMENT OF RYON BOEN, INSURANCE AGENT, WESTERN AGENCY, MINOT, 
                          NORTH DAKOTA

    Mr. Boen. Just to expand on that a little bit----
    The Chairman. And if you'd just give your name----
    Mr. Boen. Ryon----
    The Chairman [continuing]. So she----
    Mr. Boen. Ryon Boen.
    You know, you guys talked a lot about risk management and 
it sure--why is there--and some of this is a question, why is 
there risk management through FSA and RMA? And it's so 
duplicative. The--the clients just hate it. They--``Just 
whatever I can do to not go into the FSA office,'' is what I 
hear as a crop insurance agent all the time is, ``I just''--
``I've got to report my acres to you and then I've got to 
report it to them.''
    SURE and ACRE are trying to do similar things. They're 
extending the revenue protection period for sure, but really 
what they're just--they're both doing ostensibly the same thing 
and you could probably combine those programs, your $6 billion 
that--that got cut out. Is there that much duplication? 
Probably not, but you might get half of it back by figuring out 
a way to streamline it.
    I would--you know, the FSA offices were not geared up for 
this program. I would be in constant communication with those 
guys to understand it so I could explain it to my clients. My 
clients come to me to explain to them a program that I don't 
administer. But they--they're not equipped for these changes 
that are prescribed through these farm bills, either. I think 
the private delivery of crop insurance is much more geared up 
toward these dynamic changes because it's more--you know, it's 
just--it's just faster. You know, I think----
    The Chairman. You know, I--I--let--let me be very blunt 
here. There are people who want the farm program to fail, and 
one way to make it fail is to starve the FSA system so it can't 
be administered.
    Mr. Boen. Mm-hmm.
    The Chairman. And I've had senators tell me flat-out, not 
in public, but they've told me in private, that that is exactly 
what they're trying to do. They want the whole thing to fail 
because they absolutely don't believe in it.
    I--I had a farmer--or a senator tell me that we shouldn't 
farm in North Dakota. He's on the Agriculture Committee. I mean 
he flat-out told me we shouldn't be farming here. It's too 
marginal. I said, ``Have you ever been to the Red River Valley 
of North Dakota?''
    ``No.''
    I said, you know, ``When I was growing up, every time we 
drove through the Red River Valley, my grandfather used to say 
the same thing, 'Never been a crop failure in the Red River 
Valley,' '' and my grandfather would say the same thing every 
time we drove through.
    Now, this guy, I--I won't identify him further because I--I 
could tell you some more things that he said, but that would 
more further identify him. I mean he was dead-serious. I mean, 
and he said this to me more than once, ``You should not be 
farming in North Dakota.'' Wow! Now, that--that's kind of the 
thing we're up against here. We've got people who actually 
think like that.
    Yeah.
    Mr. Pederson. Ryan Pederson. To that point, I went to 
graduate school at Purdue, Indiana, and was at a speech with 
Senator Lugar and he made the same point, and I thought to 
myself----
    [Laughter.]
    The Chairman. OK.
    [Laughter.]
    The Chairman. OK. I was trying to protect him. Go ahead.
    Mr. Carlson. He said it to me once too.
    The Chairman. Huh? Did he?
    Mr. Carlson. He said it to me once too.
    The Chairman. Yeah, he--he said it--and he said it to me 
more than once.
    Mr. Carlson. But he apologized later. He apologized later.
    Mr. Pederson. But you know we've----
    The Chairman. He was--he was not kidding, either.
    Mr. Pederson. No, he wasn't, I mean.
    And we've talked about water issues. You ask the people in 
the ``I'' states where would they be without drain tile.
    Mr. Carlson. Yeah.
    Mr. Pederson. You know, they had it all done before any of 
these rules came in.
    Mr. Carlson. Yeah.
    Mr. Pederson. If they didn't have the drain tile, they'd 
probably be in worse shape than we are. I just think that----
    Mr. Backes. They're doing it now against the rules----
    Mr. Carlson. Yeah.
    Mr. Backes [continuing]. And nobody does anything about it, 
either.
    Mr. Carlson. No, they don't.
    Mr. Pederson. So it's--it's something to remind them of 
that----
    The Chairman. You know what he said to me, one of the 
things he said to me? Never been a crop failure on his farm. 
Never been a crop failure on his farm. Well, you know, you guys 
have been blessed. You've been blessed. But that is not all of 
American agriculture. And the idea that you would just say you 
don't farm in North Dakota, I mean, really, what would the 
consequence of that be? That is twenty--25 percent of this 
state's economy just out the window. And what would it mean to 
the country since we are the No. 1 producer in commodity after 
commodity? As I started my--my remarks today, 15 commodities, 
we're No. 1.
    So this idea that somehow North Dakota should not be an 
agricultural producer because there is risk to production here 
is, to me, absolutely detached from any economic reality. But, 
I mean, that--that is--that's the kind of thing that we're 
dealing with.
    Any other? I know that we've about come to the end of our 
time. I want to make sure anybody else that's got something 
they want to testify to has a chance.
    If not, I want to again thank this panel. I appreciate very 
much your participating. As we think about a summit on 
agricultural policy for next year, we'll be in conversation 
with all of you. Love to have you participate. I think it could 
be extremely important to farm bill deliberations to have North 
Dakota once again lead the way as we think through what the 
issues are.
    I want to thank everybody that's in attendance here today. 
We certainly appreciate that.
    With that, the hearing will be adjourned.
    [Whereupon, at 2:51 p.m., the hearing was adjourned.]

                                 
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