The North Dakota Oil Fracking Boom Creates Clash of Money and Devastation
Continued from previous page
Several states have banned fracking as too environmentally taxing. Other states have limited the practice. Not North Dakota.
With few regulations and little protest, oil production is proceeding at a dizzy pace. Last year, North Dakota became the third largest oil producing state in the nation, bumping California. This year it replaced Alaska for the number two spot after Texas. The oil patch is now producing more than 600,000 barrels of oil a day. Thanks to oil taxes and related revenue, North Dakota is expecting its surplus to top $2 billion within the year. This in a state with only 641,480 people pre-boom.
New Town, with about 1,500 residents pre-boom, now boasts North Dakota’s fastest growing economy. But while it is on Fort Berthold, it is considered part of Mountrail County, not part of the tribal nation.
Still, the tribe is raking in cash. The Fort Berthold reservation received more than $117 million in royalties in 2011, according to the Bureau of Indian Affairs. Individual tribal members who own mineral rights on their private land, or allotments, receive anywhere from hundreds to tens of thousands of dollars a month. That’s about two-thirds of the tribe’s total royalties.
Unemployment, now between six and seven percent, keeps dropping. Businesses are thriving. The Four Bears Casino is adding 160 rooms to its 97-room hotel and plans to offer ferryboat gambling on Lake Sakakawea, the Missouri River reservoir that runs through the reservation.
People who used to come to the tribal offices asking for help no longer do. “We appreciate the money that’s coming in and helping to improve incomes and the socioeconomic status of our members,” said Dennis Fox, the tribe’s CEO.
But, Fox added, despite all the oil money coming in from royalties and taxes, Three Affiliated Tribes is spending all of its new income—and then some --dealing with the oil production’s impacts.
In an interview at tribal headquarters, Fox offered a “but” for every positive impact of the oil rush. The tribe’s budget for special projects is now double its average yearly operating budget of between $40 and $50 million, he said. But the tribe estimates that it will cost more than $100 million just to repair the reservation’s road system.
“It’s a matter of playing catch up,” he said. “We’re trying to beef up all of our infrastructure. Nobody anticipated the great influx of workers and the impact on the roads and housing and everything else.”
The tribal chairman, Tex Hall, regularly treks to Washington, D.C. to plead for road relief. “I already receive almost daily calls telling me of serious accidents involving our members,” he told a Congressional appropriations subcommittee in April.
“In fact, we now have so many accidents on my reservation that my staff does not even both to call me unless the injuries are life-threatening. The situation has now gotten to be that bad.”
All over the Bakken lands of Western North Dakota, known as the oil patch, towns are going through many of the same challenges. Highways are getting pounded to dust, police, fire and social service departments are scrambling and housing is beyond hard to find.
In a way, history is repeating itself. Cities and towns across the country have gone through similar upheavals for the sake of energy production and jobs, including the small towns of southwest West Virginia and eastern Kentucky during the heyday of coal. That part of central Appalachia is still struggling to pick up after booms went bust.
Of course, North Dakota invited the oil companies. But the oil patch is like the high school wallflower who announces a backyard kegger on Facebook, only to find the entire student body has shown up. Before it gave oil drilling a go, North Dakota was the nation’s least-visited state. The once-overlooked, now overwhelmed oil patch never dreamed it would become the center of the biggest, messiest migration to one state since the California Gold Rush.