The North Dakota oil boom was the period of rapidly expanding oil extraction from the Bakken Formation in the state of North Dakota that lasted from the discovery of the Parshall Oil Field in 2006, and peaked in 2012, [1] [2] but with substantially less growth noted since 2015 due to a global decline in oil prices. [3]
The oil boom was largely due to the successful use of horizontal drilling and hydraulic fracturing, which made unconventional tight oil deposits recoverable. [4] Contributing to the boom was a push to commence drilling and production on oil and gas leases before the expiration of their primary term, commonly three to five years, at which time the leases would terminate unless a producing well was drilled on the lease. But once production was established, the leases continued as long as oil and gas were continually produced.
The boom created new jobs and economic growth in tandem with long-lasting negative effects, such as environmental degradation, pollution and infrastructure collapse. It dramatically increased the rate of sexual assault and other violent crime perpetrated by workers living in the area’s "man camps" against Indigenous women and children in neighboring reservations, exacerbating the ongoing Missing and Murdered Indigenous Women Crisis.
From 2008 to at least 2014, the North Dakota oil boom resulted in enough jobs to provide North Dakota with the lowest unemployment rate in the United States despite the Great Recession. [5] [6] in December 2011, at the height of the oil boom North Dakotas unemployment was only 3.5 percent, the lowest of any state in the US. [7] [8]
The boom gave North Dakota, a state with a 2013 population of about 725,000, a billion-dollar budget surplus. North Dakota had ranked 38th in per capita gross domestic product (GDP) in 2001, and rose steadily with the Bakken boom. It had a per capita GDP 29% above the national average by 2013. [9]
By 2012, income from oil royalties was reportedly paying many local mineral owners $50,000 to $60,000 per month, and some more than $100,000 per month. Bruce Gjovig, head of the UND Center for Innovation Foundation in Grand Forks, estimated that the boom was creating 2,000 millionaires per year in North Dakota. By 2010, the average income in Mountrail County more than doubled to $52,027, putting the county into the top 100 richest counties in the United States. [10]
The number of actively-drilling rigs in North Dakota peaked at 217 rigs in Spring 2012, with the rig count averaging 180-190 throughout 2013. [11] Each of the rigs is estimated to create roughly 125 new full-time jobs. This meant a total growth of around 25,000 jobs, including an extra 10,000 jobs for workers who lay pipes to producing wells and produce processing plants. [8] Some estimates predicted that North Dakota could have as many as 48,000 new wells, with drilling taking place over the next two to three decades.[ citation needed ]
The Bakken boom propelled North Dakota into the top ranks of oil-producing states. By 2007, North Dakota ranked 8th among the states in oil production. In 2008, the state overtook Wyoming and New Mexico; in 2009 it outproduced Louisiana and Oklahoma; and in 2011 and 2012 it surpassed California and Alaska respectively. By 2012, North Dakota was exceeded only by Texas in oil production. [12]
By October 2020, total oil rig count in the state had fallen dramatically. According to the North Dakota Department of Mineral Resources, the total oil rig count in the state decreased from 58 active rigs on October 3, 2019, to only 11 active rigs on October 3, 2020, a reduction of over 80 percent. [13]
The North Dakota state government receives 11.5 percent of the gross value of all oil produced through severance taxes. [14] The boom gave the state of North Dakota a billion-dollar budget surplus in 2011. [7] [8]
In addition to severance taxes, the state of North Dakota owns extensive mineral rights, which are leased by competitive bidding. In fiscal year 2010, the State Land Department reported that mineral income on its land earned $265 million for the North Dakota school trust fund, and that the trust fund had grown to $1.3 billion. [15]
The federal government is also a major owner of mineral rights in the region, and it also leases the rights to companies in competitive bidding. In a January 2013 federal lease sale, the top bid was $19,500 per acre for a lease on one tract in North Dakota. Of the lease sale and royalties from the federal tracts, the federal government keeps 52 percent, and passes 48 percent on to the state of North Dakota. [16]
The industrialization and population boom put a strain on roads, water supplies, sewage systems, and government services in the Bakken Formation and Williston Basin area. For context, this area covers over half of the state. Some counties increased in population by almost double from 20,000 to 40,000. The population increased in men and decreased in women, as the physically laborious jobs attracted some, while crime drove out others. Long term viability of a boom area generally will not last, as the services do not expand at the same rapid pace of population growth. Examples of services that were not maintained in North Dakota include school consolidations and size accommodations, lack of goods on demand, poor health care availability, loss of human capital, inadequate elderly care, and road development.
Sociologist John S. Gilmore presents the idea of a boom town 'problem triangle'. The notion is as follows: Local services do not keep up with population growth, degrading the quality of life in the community. Lower quality of life creates more difficult in attracting additional population needed to support growth of services. Private investors also are often hesitant to invest in services, as chaos/ crime is often perpetuated in these areas. The oil industry relies on employees, but these employees in turn rely on other employees (dining, retail, etc.) and services (law enforcement, school systems, health care, etc.). [17] When additional population for other businesses and services are not present, the oil employees cannot live healthy, secure lives.
Crime affected the relationship between boom newcomers and Indigenous peoples residing in those areas. Indigenous peoples saw newcomers as threats to their access to resources and services. However, the longest residing people, such as the Standing Rock Sioux and Lakota tribes, were completely disregarded in decision making in land usage and development for oil fields. One instance particularly caught the eye of the public, when the Dakota Access Pipeline risked the people's access to land, water, and sacred sites. The issue ultimately made its way to the U.S. Supreme Court. The pipeline disrupts water flow from the Mississippi to the tribal land in order to deliver oil from the Bakken to Illinois. The pipeline also directly violates the Fort Laramie Treaty (Article II), which guarantees [20] the 'undisturbed use and occupation of the sovereign nation's reservation lands.
The addition of thousands of oil workers led to a housing shortage, requiring the construction of man camps. These portable housing units were popularized due to North Dakota proliferating usage specifically. Law enforcement agencies reported sharp increases in violent crime, drug trafficking, and gun crimes in these areas, while nearby Indigenous communities reported increased rates of sexual assault, human trafficking, sex trafficking, and missing and murdered Indigenous women.
There is a prevalent notion among oilfield workers in the Bakken that there will be no consequences for assaults against Indigenous women. This exacerbates the ongoing Missing and Murdered Indigenous Women Crisis. Native American women experienced 2.5 times higher victimization of crime than other races- and women experienced 54% increase in unlawful sexual contact, most often statutory rape. [18]
The National Institute of Justice reported that instances of sexual violence against Indigenous women and children increased 75% in Fort Berthold Indian Reservation a reservation in the Bakken region, post-boom. [19] Further studies have shown that this increase was dramatic and did not correspond with rates of violent crime in areas outside of the Bakken region, which actually decreased during this time. [20] [21]
According to a text by Indigenous scholars Sarah Deer and Elizabeth Kronk Warner, the vast majority of sexual assaults reported in this area have been perpetrated by workers living in the man camps who cross into the nearby Indigenous communities. These crimes often went unpunished, as Indigenous nations have been stripped of their ability to have criminal governance over non-Indigenous peoples who commit crimes on Indigenous lands. This stems from the 1978 case Oliphant vs. Suquamish Indian Tribe, in which the Supreme Court declared that because Indigenous nations were somewhat dependent on the United States federal government, their sovereignty was limited, as too was their ability to prosecute non- Indigenous peoples accused of committing violent crimes on their land. Thus, that ability was designated to the federal government only. [22]
It is also not possible for tribal law enforcement to prosecute non-Indigenous peoples for violent crime against Indigenous women and children that occur outside of their lands, specifically inside man camps. This ability also falls to federal and state governments, which some Native advocacy groups have deemed unwilling to prioritize violent crime against Indigenous peoples. [22]
No background checking and disregard for criminal history in the employment process for the extraction industry exacerbates these increased rates of sexual violence. Those with background histories of sexual violence may find jobs in the extraction industry attractive for their inadequate background checking, as they are excluded from jobs in other fields. [21] After the boom, it was determined by the US Marshall Service and the Fort Berthold tribal law enforcement agency that 20% of sex offenders present in the man camps were unregistered, compared to around 4-5% in the state of North Dakota in general. [22]
The lack of adequate attempts made by state governments, the federal government, and local law enforcement to quell the rise in violent crime committed against Indigenous peoples, specifically the sexual assault of Indigenous women and children, by workers at the rig further exacerbates the MMIW(link MMIW wiki article here) crisis in the US. As A. Skylar Joseph explains in A Modern Trail of Tears: The Missing and Murdered Indigenous Women (MMIW) Crisis in the US, Indigenous women are murdered at a rate of 10 times the national average and are twice as likely to experience sexual assault than any other race in the US. Historic sexualization and objectification of Indigenous women fuels this crisis and ensures that cases of sexual, domestic, or fatal violence against Indigenous women are not taken seriously. [23]
Oil extraction in the Bakken contributes greatly to climate change and environmental degradation. According to E.A. Kort, and his peers, the Bakken formation was responsible for 2% of total global ethane emissions in 2014. [24] Ethane acts as a greenhouse gas when released during extraction, contributing to air quality reduction, pollution, and global warming. [24] As Deer and Warner show, greenhouse gas emission is one of the most prevalent causes of climate change, which disproportionately effects Indigenous communities by causing erosion, severe weather, declining populations of salmon and other sacred fish species, and negative health effects overall. [25] Thus, the negative effects of extraction harm not only the land that is being extracted from, but the original inhabitants of that land.
The oil boom in North Dakota experienced a brief decline in 2014 after the Saudi Arabian oil industry increased its output and the price of crude oil fell from $108 to $40. [26] The price returned just as the U.S. economy recovered from the Great Recession which resulted in difficulties recruiting workers back to the region. [26]
By October 2020, total oil rig count in North Dakota had fallen. According to the North Dakota Department of Mineral Resources, the total oil rig count in the state had fallen from 58 active rigs on October 3, 2019, to only 11 active rigs on October 3, 2020, a reduction of over 80 percent. [13] However, oil production hit an all time high of 1.5 million barrels per day in 2019. Demand fell temporarily due to the COVID-19 pandemic. In 2021 oil prices recovered to over $70 per barrel due to increased demand linked to the Covid-19 recovery and North Dakota remained the state with the second highest oil production after Texas [27] until it was overtaken by New Mexico in May 2021. [28]
As of February 2024, oil production has slowed, with plans to add one or two more drilling rigs in the area in 2024. [29]
The history of the petroleum industry in the United States goes back to the early 19th century, although the indigenous peoples, like many ancient societies, have used petroleum seeps since prehistoric times; where found, these seeps signaled the growth of the industry from the earliest discoveries to the more recent.
North Dakota is a landlocked U.S. state in the Upper Midwest, named after the indigenous Dakota Sioux. It is bordered by the Canadian provinces of Saskatchewan and Manitoba to the north and by the U.S. states of Minnesota to the east, South Dakota to the south, and Montana to the west. North Dakota is part of the Great Plains region, characterized by broad prairies, steppe, temperate savanna, badlands, and farmland. North Dakota is the 19th-largest state, but with a population of less than 780,000, it is the fourth-least populous and fourth-most sparsely populated. The state capital is Bismarck while the most populous city is Fargo, which accounts for nearly a fifth of the state's population; both cities are among the fastest-growing in the U.S., although half of all residents live in rural areas.
The exploitation of natural resources describes using natural resources, often non-renewable or limited, for economic growth or development. Environmental degradation, human insecurity, and social conflict frequently accompany natural resource exploitation. The impacts of the depletion of natural resources include the decline of economic growth in local areas; however, the abundance of natural resources does not always correlate with a country's material prosperity. Many resource-rich countries, especially in the Global South, face distributional conflicts, where local bureaucracies mismanage or disagree on how resources should be used. Foreign industries also contribute to resource exploitation, where raw materials are outsourced from developing countries, with the local communities receiving little profit from the exchange. This is often accompanied by negative effects of economic growth around the affected areas such as inequality and pollution
Petroleum is a fossil fuel that can be drawn from beneath the Earth's surface. Reservoirs of petroleum are formed through the mixture of plants, algae, and sediments in shallow seas under high pressure. Petroleum is mostly recovered from oil drilling. Seismic surveys and other methods are used to locate oil reservoirs. Oil rigs and oil platforms are used to drill long holes into the earth to create an oil well and extract petroleum. After extraction, oil is refined to make gasoline and other products such as tires and refrigerators. Extraction of petroleum can be dangerous and have led to oil spills.
Oil and gas law in the United States is the branch of law that pertains to the acquisition and ownership rights in oil and gas both under the soil before discovery and after its capture, and adjudication regarding those rights.
The Bakken Formation is a rock unit from the Late Devonian to Early Mississippian age occupying about 200,000 square miles (520,000 km2) of the subsurface of the Williston Basin, underlying parts of Montana, North Dakota, Saskatchewan and Manitoba. The formation was initially described by geologist J. W. Nordquist in 1953. The formation is entirely in the subsurface, and has no surface outcrop. It is named after Henry O. Bakken (1901–1982), a farmer in Tioga, North Dakota, who owned the land where the formation was initially discovered while drilling for oil.
Petroleum has been a major industry in the United States since the 1859 Pennsylvania oil rush around Titusville, Pennsylvania. Commonly characterized as "Big Oil", the industry includes exploration, production, refining, transportation, and marketing of oil and natural gas products. The leading crude oil-producing areas in the United States in 2023 were Texas, followed by the offshore federal zone of the Gulf of Mexico, North Dakota and New Mexico.
Within the petroleum industry, proven crude oil reserves in the United States were 44.4 billion barrels (7.06×109 m3) of crude oil as of the end of 2021, excluding the Strategic Petroleum Reserve.
Shale gas in the United States is an available source of unconventional natural gas. Led by new applications of hydraulic fracturing technology and horizontal drilling, development of new sources of shale gas has offset declines in production from conventional gas reservoirs, and has led to major increases in reserves of U.S. natural gas. Largely due to shale gas discoveries, estimated reserves of natural gas in the United States in 2008 were 35% higher than in 2006.
Tight oil is light crude oil contained in unconventional petroleum-bearing formations of low permeability, often shale or tight sandstone. Economic production from tight oil formations requires the same hydraulic fracturing and often uses the same horizontal well technology used in the production of shale gas. While sometimes called "shale oil", tight oil should not be confused with oil shale or shale oil. Therefore, the International Energy Agency recommends using the term "light tight oil" for oil produced from shales or other very low permeability formations, while the World Energy Resources 2013 report by the World Energy Council uses the terms "tight oil" and "shale-hosted oil".
Continental Resources, Inc. is a petroleum and natural gas exploration and production company headquartered in Oklahoma City. The company was founded by Harold Hamm in 1967 at the age of 21 as Shelly Dean Oil Company, originally named for Hamm's two daughters. In 1990, Shelly Dean re-branded itself as Continental Resources. It primarily used hydraulic fracturing and directional drilling to produce from low permeability formations.
Target Hospitality is a company that provides workforce lodging and other temporary, modular housing used for oil, gas and mining operations; large-scale events; government agencies; and disaster relief. Target Hospitality is based in The Woodlands, Texas, and also has offices in Boston, Massachusetts; Williston, North Dakota; Denver, Colorado; Edmonton, Alberta, and Sydney, Australia.
The Parshall Oil Field is an oil field producing from the Bakken Formation and Three Forks Formation near the town of Parshall, in Mountrail County, North Dakota. The field is in the Williston Basin. The field was discovered in 2006 by Michael Johnson and sold the play to EOG Resources, which drilled, and now operates, most of the wells. It was the discovery of the Parshall Field that was largely responsible for the North Dakota oil boom. Parshall's break-even price is at US$38/barrel, which is the lowest on the Bakken Formation; overall, Bakken's break-even point is of US$62/barrel.
The Marcellus natural gas trend is a large geographic area of prolific shale gas extraction from the Marcellus Shale or Marcellus Formation, of Devonian age, in the eastern United States. The shale play encompasses 104,000 square miles and stretches across Pennsylvania and West Virginia, and into eastern Ohio and western New York. In 2012, it was the largest source of natural gas in the United States, and production was still growing rapidly in 2013. The natural gas is trapped in low-permeability shale, and requires the well completion method of hydraulic fracturing to allow the gas to flow to the well bore. The surge in drilling activity in the Marcellus Shale since 2008 has generated both economic benefits and considerable controversy.
Missing and Murdered Indigenous Women are instances of violence against Indigenous women in Canada and the United States, notably those in the First Nations in Canada and Native American communities, but also amongst other Indigenous peoples such as in Australia and New Zealand, and the grassroots movement to raise awareness of MMIW through organizing marches; building databases of the missing; holding local community, city council, and tribal council meetings; and conducting domestic violence trainings and other informational sessions for police.
The epidemic of missing and murdered Indigenous women (MMIW) is not exclusive to any region of the United States, but some states have a higher number of cases. Utah ranked 8th in the United States for the number of missing and murdered Indigenous women. The state's capital, Salt Lake City, was the city with the 9th highest number of cases of MMIW.
Man camps are temporary workforce housing to accommodate a large influx of high-paid workers in the resource extraction industries, especially in Canada and the United States. Twentieth century boom–bust housing cycles related to the oil and gas industry made companies reluctant to invest in permanent housing for temporary workforces.
The Dakota Access Pipeline (DAPL) or Bakken pipeline is a 1,172-mile-long (1,886 km) underground pipeline in the United States that has the ability to transport up to 750,000 barrels of light sweet crude oil per day. It begins in the shale oil fields of the Bakken Formation in northwest North Dakota and continues through South Dakota and Iowa to an oil terminal near Patoka, Illinois. Together with the Energy Transfer Crude Oil Pipeline from Patoka to Nederland, Texas, it forms the Bakken system. The pipeline transports 40 percent of the oil produced in the Bakken region.
Ben M. "Bud" Brigham is an American oil and gas explorer, entrepreneur, and investor.