Fracking Boom

Reading an article recently about fracking in North Dakota piqued my interest and sent me down an internet rabbit hole.  It’s a fascinating story.

Hydraulic shale oil fracturing (more commonly known as fracking) is having a dramatic effect on the U.S. energy industry.  As a result of fracking U.S. domestic oil production continues to skyrocket and experts are predicting that the U.S. will surpass Saudi Arabia as the world’s largest oil producer within the next few years.  U.S. oil exports are four times greater than they were a decade ago, shrinking the trade deficit.

North Dakota is at the epicenter of the fracking explosion.  Last year it passed Alaska to become the second largest oil-producing state in the country and some experts predict that within twenty years it will surpass Texas.

Fracking has brought an astonishing economic boom to North Dakota. Thousands of new wells are being drilled every year.  Fracking is estimated to be responsible for creating 2,000 new millionaires per year in the state.  In a recent post I mentioned the skyrocketing prices of farmland in the Dakotas.  Many landowners are receiving royalties of $50,000 to $100,000 per month.  The average annual income in Montvail County has doubled over the past five years and is still rising.  It is now among the top 100 counties in the nation in income per person.  The state tax surplus for this year alone is close to $2 billion.

Of course booms like that come with a price, overcrowding highways, schools and hospitals and driving up prices for everyone.

Describing the fracking boom town Williston, a journalist wrote:  “There’s not a motel room to be had in the city, housing prices are double what they were a year ago ($300,000 for a two-bedroom home), and the daily onslaught of new arrivals is reduced to living in their cars, RVs, sporadic tent cities or the rapidly proliferating “man camps” – clusters of trailers in an open field that pack in oil patch workers dormitory style, sometimes six to a room. Access to running water and simple sanitation is so rare that public businesses have had to lock their bathrooms to discourage makeshift sponge baths or the dumping of wastewater.”  Another reporter describes the effect on Watford City in similar terms, “A population that in the past two years has soared from about 1,700 to at least 6,000 and perhaps as many as 10,000. A housing shortage so acute that men—and it’s still mostly men—are forced to sleep in their trucks or in overpriced motels; pay “gouge-zone” fees to park their campers, RVs, and house trailers; or live in one of the expensive prefab, dormlike “man camps” that serve as instant but sterile bedroom communities for towns and work sites. Streets clotted with noisy, exhaust-belching tanker trucks, gravel trucks, flatbeds, dump trucks, service trucks, and—the personal vehicle of choice in the oil patch—oversize, gas-gorging pickups. More crime, more highway accidents, more medical emergencies. People on fixed incomes forced to move because they can’t afford steep rent hikes. Overtaxed water and sewer systems. Prostitution. Registered sex offenders at large in the community.” A resident of Stanley commented, “When I graduated in 1970 my class had 70 students.  Now the high school gets 120 to 130 new students each year.”

Obviously there are also concerns about the environmental consequences of fracking. Many worry about contamination of the water supply, seismic dispruption and the emission of vast amounts of carbon.  So much natural gas is being flared off the wells that from space North Dakota is lit up like Chicago these days.

2013-10-17-flaring2

drilling

Recently some reports have come out questioning the previous estimates on of the amount of oil that can be extracted from beneath North Dakota. Whatever the amount, it is finite.  All booms end eventually.

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10 comments on “Fracking Boom

  1. And when the boom ends, things will take a major adjustment for that town. I know folks who are there, wrangling an existence for themselves in these conditions and I know those who are making out like bandits also over this situation. It’s not unlike coal mining towns created in the ’50’s where the company store was in place and coupons were given to be spent there. “I owe my soul to the company store” all over again …

    But then it never really went anywhere, it’s new name is Wal-mart…

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    • Bill says:

      As I was reading the stories about what’s happening I thought of the old coal mining towns too. The ones largely abandoned now, inhabited only by a few poor people with polluted drinking water.

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  2. bobraxton says:

    Af frack (the white goose)

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  3. shoreacres says:

    The line of demarcation is fascinating. Though it doesn’t follow the Mississippi precisely, it’s clear where “east” and “west” divide – and which portions would be considered part of “flyover country”.

    I’ve heard interviews on the radio with young guys who’ve accepted the call to “go north”. Their reports support what you say – phenomenal growth, high salaries, difficult living conditions and a frontier/boom town environment. One guy said many of them accept it just as they would a posting to Saudi – you go, keep your head down, do your work, get paid and wait until you feel you’ve made enough to go home.

    I don’t know if this has occurred to anyone else, but that’s precisely the attitude of many migrant agricultural and construction workers in this area. I’m not saying it’s good or bad, right or wrong – I just think it’s interesting.

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    • Bill says:

      I was completely unaware of the boomtown phenomenon. I’d knew a little about fracking but had no idea this was happening to North Dakota. I remember having lots of trouble finding jobs during the recession of the late 70s/early 80s. My brother and I seriously considered going to Texas, where we heard there were lots of jobs. If this kind of thing was happening in North Dakota then we might have gone there. But if I got caught up in this I’d have exactly the attitude you mention. The comparison to seasonal workers is interesting. I know the men who work for my neighbor have their own farms back home. Some of them save up the money they make and use it to improve their farms (which I greatly respect). One bought a tractor this year to take back home.

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  4. EllaDee says:

    Fracking is a scary story. Australia is being fracked as well… despite the endless environmental issues associated with it… http://www.lockthegate.org.au/fracking. Money talks.

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    • Bill says:

      I had no idea it was happening in Australia. My wife knew a lot more about it than me, but I’ve just discovered this. What it’s doing to North Dakota is just wild.

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