Quantcast

Plunging Oil Prices Trigger Economic Downturn in Fracking Boom Town

Energy

When fracking and horizontal drilling made the oil embedded in North Dakota's underground Bakken shale formation accessible for extraction, it touched off something akin to a gold rush in the state.

With affluence dependent on fracking for oil, North Dakota is vulnerable to oil price fluctuations.
Photo credit: Shutterstock

Oil production has grown 600 percent in the last decade. Small towns, called "man camps," have sprouted with growing populations of oil field workers, bringing both increased economic activity and employment and increased crime and social problems such as sexual assaults. But plummeting oil prices have the potential to upend all that in ways that are hard to predict.

Williston, North Dakota, which is in the heart of the boom, grew from 13,000 to more than double today, which meant major invests in housing and infrastructure. The city is currently $300 million in debt and four years behind in paying off that debt, and plunging oil prices could impact its ability to do so. Williston Mayor Howard Krug talked to Peter O'Dowd of NPR's Here and Now about the challenges his town faces.

"We got real big real quick," admitted Krug, saying that Williston's population could actually be as high as 37,000 and eventually grow to 60,000. He said that the city's housing stock has grown from 5,000 to 10,000 units since 2006 and that another 5,000 units are needed.

Asked how Williston would cope if oil prices continue to stay low or even decline, he said, "Oil prices can go even lower and we'll still be OK here. It will just take us longer to pay for our infrastructure needs. I am optimistic that oil prices are going to go back up. As long as it doesn't stay down for a long period of time, we should be just fine here in western North Dakota."

"Let's say prices do stay lower?" O'Dowd asked. "What sort of tough decisions will you have to make as mayor?"

"The state of North Dakota has enough money to make Williston whole right now," said Krug, referring to its billion-dollar surplus thanks to the shale oil boom. "Also we're doing things internally to watch where that oil price goes so if we need to collect some more taxes on user fees and those kind of things that's the things we'll do. If we have to make the hard choices of cutting back on personnel or projects that would benefit Williston, then we'll just spread them out."

But just in case that fracking thing doesn't pan out, Krug touted the area's agriculture.

"We have some of the most fertile farm land in the entire world. We're number one in lentils. We're number one in durum."

YOU MIGHT ALSO LIKE

Founding Father of Fracking Boom Is Crying the Blues

Film Exposes Harsh Reality of Living Amid North Dakota's Oil Boom

OPEC Decision Likely to Crash U.S. Fracking Industry

EcoWatch Daily Newsletter

Loggers operate in an area of lodgepole pine trees killed by the mountain pine beetle in the Beaverhead-Deerlodge National Forest on Sept. 13, 2019 in Montana. As climate change makes summers hotter and drier in the Northern Rockies, forests are threatened with increasing wildfire activity, deadly pathogens and insect infestations, including the mountain pine beetle outbreak. The insects have killed more than six million acres of forest across Montana since 2000. Chip Somodevilla / Getty Images

President Donald Trump told a crowd at the Davos World Economic Forum Tuesday that the U.S. will join the Forum's 1t.org initiative to restore and conserve one trillion trees around the world, according to The Hill.

Read More
Wild rice flatbread is one of many Native recipes found in Indigikitchen. Indigikitchen

The online cooking show Indigikitchen is providing a platform to help disseminate Indigenous food recipes — while helping eaters recognize their impact on the planet and Native communities.

Read More
Sponsored

On the Solomon Islands, rats and poachers are the two major threats to critically endangered sea turtles. A group of local women have joined forces to help save the animals from extinction.

Read More
Whale watching (here, off Húsavík, Iceland) may be better for the local economy than whale hunting. Davide Cantelli / Wikimedia / CC BY

By Joe Roman

One of the most important global conservation events of the past year was something that didn't happen. For the first time since 2002, Iceland — one of just three countries that still allow commercial whaling — didn't hunt any whales, even though its government had approved whaling permits in early 2019.

Read More
People participate in a national mile-long march to highlight the push for clean water in Flint Feb. 19, 2016 in Flint, Michigan. Bill Pugliano / Stringer / Getty Images

The Supreme Court made a decision Tuesday that means Flint residents can sue state and local officials over the water crisis that leached lead into their water and resulted in at least 12 deaths.

Read More