homepage logo

Berginski: 6 downsides of N.D. oil boom

By Staff | Feb 21, 2014

The doll hairs (clams, bones, greenbacks, etc.) are present in North Dakota, especially in the Bakken region. With an unemployment rate lower than even the national average (2.7 percent according to Reuters), tales of fast food workers getting triple figure sign-on bonuses (well, $300) and gas station attendants supposedly pulling down $50,000 a year, it’s no wonder people are coming up here. We’ve gone from a state people mainly fly over to a state where jobs are.

But for every good thing, there’s a bad, and the bad has really started coming to light.

1. Homelessness. In the early days of the oil boom there were reports of people camping in Wal-Mart parking lots. Now things have gotten worse. Stories in both Reuters and Time have reports of people living in their cars right now, when the weather is unpredictable. And if they’re not living in their cars, then they’re living under bridges or even sleeping in stairwells.

And those are just people coming here. According to a Fiscal Times article, even some longtime residents of Williston are homeless too. The city of Williston doesn’t have a homeless shelter (A makeshift shelter at a Lutheran church was forced to shut down for not having showers.), and even the local Salvation Army has been buying bus tickets to get people to leave.

Both outlets have reported that last year homelessness in the state increased by 200 percent. 200! If that number doesn’t surprise, shock or even disconcert you, continue reading.

2. Rent. According to an Apartment Guide study mentioned in an Associated Press article, the average rent for a one-bedroom apartment in Williston costs over $2,000 a month. That’s more than what it would apparently cost in New York! But that’s not the only place in North Dakota where rent has gone up.

On the Apartment Guide website, if you look up Minot, the top results would show quadruple figures too, not quite as steep as Williston but it’s still a hefty chunk of change. In Dickinson, the rent on average is $1,733 a month, outranking even a metropolis like Boston in Apartment Guide’s study. Out east, say in Fargo, it’s a different story. I could get a one bedroom, one bath for less than $500 a month!

Housing is in demand, which is why rent has gone up, but there is no way an average family can afford rent in the boomtowns (unless one or both spouses are employed in the energy sector).

3. Mining an explosive. Bakken

oil has been involved

in at least two major explosions in 2013,

one in Casselton

and one in Canada (the latter of which killed and injured people). Trains aren’t the only thing blowing up. Explosions have occurred on the rigs, too.

Bakken crude has been found to be extremely volatile. It’s not a matter of if there will be another explosion, it’s a matter of when.

4. Medical shortage. As N.D. columnist Lloyd Omdahl and other outlets have reported, there are a lot of people moving to Williston, and there there’s only one hospital and not enough doctors to handle possible increases in medical care needs. Is it my imagination, or is it starting to sound like the thought of all those dollars coming in superseded the need to think of any and all possible outcomes and crises?

5. Jobs. While we’re on the subject of dollars, let’s talk about jobs. Remember I said in the introduction there are stories of fast food workers getting $300 sign-on bonuses? There’s a reason for that: fast food places in that area, and other places, need workers. There were places paying more than twice the minimum wage an hour to entice potential employees, but let’s be real. If there’s jobs where one can make $30 an hour or more, then why would anyone want to work at McDonalds?

6. It’s only temporary. As long as there’s oil in the Bakken shale to be fracked, the oil boom will continue. According to a Slate article, there are 700 billion barrels of oil combined in the Bakken and Eagle Ford (Texas) formations, and two trillion barrels in the Green River formation (under Colorado, Utah and Wyoming). But only 1-2 percent of the oil in the former can be recovered with current technology, while in the latter what’s found has to be cooked before it can even be considered “oil”.

But booms eventually go bust. An article by a nonprofit group called the Post Carbon Institute-a Santa Rosa, Calif., based 501(c)3 think-tank dedicated to climate change and energy sustainability and equity-said that the Energy Information Administration’s “Annual Energy Outlook” predicts that U.S. oil production will reach over 9 million barrels per day by 2019, but by 2021 it will start to decline. By 2040 the US will only produce about 7.5 million barrels per day.

Tight oil, like what the Bakken crude is considered, is a different story. Production is set to peak by 2016-17, and, if more wells are drilled and producing, then 11 billion barrels could be recovered by 2035. “If” being the operative word. If production falls and the oil runs out, the jobs, and the people seeking them may not be here for long.

Please Enter Your Facebook App ID. Required for FB Comments. Click here for FB Comments Settings page