This article is brought to you by Stanton Dodson, CEO & Chairman at Duke Aerospace Holdings and Chairman at Great Dakota Energy.
The states of Montana and North Dakota have traditionally relied upon wheat and cattle to fuel their economy. The agricultural industry in these states has sustained them for generations…until the oil boom that followed the discovery and exploitation of the Bakken Basin generated billions in investments in land acquisition, exploration, and production.
Oil Invigorates the State’s Economy
Certain areas in the Bakken Basin were the first to experience the unprecedented growth following the discovery and development of Bakken Basin’s massive oil reserve. From numerous towns such as Williston, Sidney and Waterford City, signs of the economic boom are clear and present: higher pay, thousands of job openings in a week, businesses that are earning better than they did before the recession, businesses that are mushrooming, and the states’ lowest unemployment rates in decades. The local Wal-Mart and McDonald’s are some of the busiest in the country, the latter even losing people to the big oil companies that always have vacancies for residents and newcomers alike.
One major concern for the local and state leaders is the unprecedented surge in development. Reports from counties all over North Dakota indicate a gradual and continuous population growth, so much so that local residents are concerned about maxing out their sewage system’s capacity. Traffic has also become a major problem. People that are coming from other states to look for a job in North Dakota are forced to sleep in their vehicles for lack of accommodations. Even hotels are booked entirely for the oil company employees.
Bakken Oil Boom Reaching Farther
Many oil companies spud new oil rigs every year, venturing farther in search of oil. This opens opportunities for other areas outside of the counties of Williams, Towner, and McKenzie – the hotspots so far. Other counties, such as Flathead County in Montana, are also taking a bite of the oil boom; per recent estimates, there are over 700 Flathead residents currently part of the oil workforce, even as oil companies continue to hire from neighboring areas. While this looks good at first, some analysts fear that they would experience a decrease in population coupled by increase in unemployment levels in the county, especially once the hotspot counties’ housing and infrastructure are able to accommodate workers and their families from Flathead.
For this reason, other counties are now gearing up for the boom as well. Montana West is organizing an event to do exactly that. Slated to run on January 2012, the event dubbed as “Economic Future for Flathead” hopes to disseminate information on the effects of the Bakken Oil Boom to Montana’s economy. The aim is to become better prepared for the possible positive and negative effects of the oil boom to the local economy. They also fear how the oil boom’s decline could affect the local communities; history has proven that when booms decline, once-flourishing areas can turn into ghost towns.
According to an August 2011 report from the Energy Policy Research Foundation, in 1995 the US Geological Survey made an initial estimate of 151 million technically recoverable barrels of oil in the Bakken Formation. But in 2008 that measurement was revised and increased to 4.3 billion barrels due to the rising confidence in early results of Bakken drilling, successful application of new technology, an influx of investment by independents, and high initial production rates. In the span of just two years, the volume of oil per day being produced rose from 138,000 barrels per day to now more than 450,000 barrels per day. With such constant increases, it is easy to that any estimate made subsequently is likely to be much higher than 4.3 billion barrels. As of January 2011, North Dakota state officials declared that in their state alone, there are 11 billion barrels of technically recoverable oil.
Copyright Stanton Dodson, Great Dakota Energy.