November 4, 2013
KUFM / KGPR
T. M. Power
Is the Bakken Oil Boom an Example of the Economic Development We Are After?
The oil boom in the Bakken area of Montana and North Dakota has led to the
influx of large numbers of workers attracted by the relatively high-wage jobs associated
with oil exploration and development: rough-necks, truck drivers, pipe-fitters, material
handlers, railroad workers, etc. Workers are traveling hundreds of miles from their
homes and families to take these jobs, some of them temporarily living in the Bakken
area and commuting back home on weekends and other breaks.
During the very slow recovery from the Great Recession, these high-paying jobs
have certainly been a godsend to many workers and their families. The revenues
generated for state governments have also helped keep the states’ budgets balanced
without deep cuts in services.
Whether this is a good model for economic development, however, may be
another question. Oil and gas companies, understandably, want to suggest that it is.
After all, if their private interests in that development can be wrapped in the public
interest, merging the two, then oil companies are in a better position to lobby for special
privileges for themselves such as reduced taxes and relaxed environmental regulations.
Law enforcement officials and social welfare agencies, however, seem to be
telling a different story about the impact of the boom on the livability of the Bakken
communities being impacted.
The cost of living in the region has skyrocketed, primarily because of the
shortage of housing and rapid rise in housing costs. This has put pressure on existing
1
residents who were renting and are being squeezed out by the population crush.
Inequality, not surprisingly, is on the rise.
That population boom is overwhelmingly male. Many of the new workers are
being put up in hastily constructed “man-camps.” The crowding of young males with
money to spend into rural towns has had familiar consequences.
A recent study from North Dakota State University looked at the impact of the
Bakken oil boom on crime and policing. It found that the calls to police for assistance
had skyrocketed. In Watford City, in the middle of the North Dakota Bakken, with its
exploding population, police service calls increased over a hundred-fold between 2008
and 2011, from 25 calls per year to 3,900. For the police forces in other counties and
towns in the Bakken, the increases have not been this extreme, but they have put law
enforcement on the defensive. The Williston police department, for instance, saw calls
rise from 5,500 to 16,000 in that same four-year period.1
The increased volume of calls for police services was associated with alcoholrelated crimes such as bar fights, disorderly conduct, and drunk driving. Drug problems
rose dramatically, especially those associated with meth. Domestic violence was the
cause of many of the increased number of calls to the police: Aggravated assault,
assault with weapons, etc. Theft and burglary calls are up. Traffic accidents had
increased dramatically. Prostitution skyrocketed as local hotels, motels, and bars
became centers for ongoing prostitution rings.
This rapid expansion of crime in the Bakken has caught the attention of federal
law enforcement agents who have been reinforcing their presence there. Federal
1
“Policing the Patch”: An examination of the Impact of the Oi8l Boom on Small Town Policing and Crime
in Western North Dakota, Carol A. Archbold, Department of Criminal Justice & Political Science,North
Dakota State University, August 2013, Table 1.
2
agents see the Bakken crime boom as similar to earlier regional crime waves: the
cocaine cowboys of south Florida in the 1970s and 1980s and the heyday of street
gangs in Washington, DC, and Los Angeles in the early 1990s.2
It seems unlikely that many of us would consider this an ideal economy and
community in which to live and raise a family even if the amount of money circulating in
the local economy increased dramatically. One has to be careful about judging wellbeing by average income. That can be quite misleading.
For instance, back in the 1880s, Montana had the second highest per capita
income of all of America’s states and territories. Recently, Montana has been among
the poorest quarter of the states by that measure. The Mountain West as a whole had
per capita incomes that were 70 percent above the national average in the 1880s. Now
the Mountain West is the second poorest region in the nation according to that statistic,
beat out only by the Deep South.
The primary reason that per capita incomes were so high in Montana in 1880
was that almost all of the residents worked and there were very few dependents that
had to be supported by the income that was earned. There were eight men for every
three women. The men, in general were young adults. That combination assured that
there were not many children and certainly few elderly folks. The income earned by
these young, single, males did not have to support wives, children, or grandparents. So
the residents appeared to be “rich.”
It seems unlikely, however, that many people would find this peculiar
demographic situation to be, in any sense, “ideal” or something that public policy should
2
Dave Kolpack, Associated Press, Fargo, ND, October 26, 2013.
3
attempt to create. Early Montana was one large mining camp. The Bakken is vying for
that status now and being plagued by many of the same problems.
Although it is possible to see these mining camps as exciting places that are
“wide open” and free of many of the stifling constraints of conventional morality,
something that may be the dream of many a young man, few others would suggest that
mining camps are models of social organization and the good life. Yet that is what the
oil and gas industry is trying to sell us.
4