Dispatch from the Oil Patch

The roadside is strewn with tire caps ejected from a continuous procession of tanker trucks that raise a gravel fog that partially obscures seemingly endless oil drilling rigs and pumps—a glimpse into some post-apocalyptic hellscape? No, actually, this is business as usual in western North Dakota above the Bakken Formation—a 24,000 sq. mi. 10,000 ft. deep oil deposit that could yield up to 4.3 billion barrels of oil.

The only immediate catch is oil has to be priced at $75/barrel or higher for the extraction process to be commercially viable.

The boom is so big that North Dakota has not only avoided the recession that has gripped, to varying degrees, the rest of the U.S., but has witnessed an influx of billions of dollars and thousands of jobs into the state economy.

If Minnesotans consider themselves fortunate that the state unemployment rate is just 7.2% (compared to the 9.1% national rate) then North Dakotans have to be ecstatic that theirs is a miniscule 3.5%.

But, when commerce is pushed to hyper-speed, problems can occur, and North Dakota is no exception. A housing shortage that has inspired a proliferation of “man camps”—an impromptu and often mishmash of campers and fifth wheel and livestock trailers—that may meet minimum shelter requirements, but do not necessarily provide adequate protection from North Dakota’s harsh winters.

Lagging infrastructure improvements and replacement have proven problematic as well. Stretches of road, sometimes many miles in length, have given way to oiled dirt as asphalt surfaces have become impossible to maintain under the immense weight of oil transport trucks.

But, the Peace Garden state’s growing pains pale in comparison to the global implications of continued use of fossil fuels.

The North Dakota, national, and international, petro-extraction boom relies principally on hydraulic fracturing—a process that involves injecting billions of gallons of water containing often unspecified chemicals into rock formations.

In spite of what industry flaks would have the public believe, there are a myriad of ways that this process threatens water quality—a situation that a rapidly expanding global population (over a billion of which currently do not have access to clean drinking water) cannot tolerate.

Already water supplies in drought ravaged Texas have been significantly reduced by oil and gas extraction usage. With the world just coming off of the warmest six month, the warmest year and the warmest ten years on record, it seems incomprehensible that carbon-centric energy exploration and usage is actually increasing.

As NASA lead climatologist Dr. James Hansen recently said of another petro-boom—the Canadian tar sands and accompanying Keystone pipeline: “Phase out of emissions from coal is itself an enormous challenge. However, if the tar sands are thrown into the mix it is essentially game over.”

Like “clean coal” and “safe nuclear”, the current oil “boom” is another nail in Mother Earth's coffin—no matter how large short-term gains may appear to be.

Posted in Economic Development | Related Topics: Economic Growth  Economic Recession  Environment  Job Growth 

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