There are bad things that go along with any boom time or rapid growth. For that matter, there are bad things that go along with any good thing.
Here are a few articles on the downside from the huge increase in oil production in North Dakota: drugs, corruption, and human trafficking.
12/4 – Forum News Service in Bismarck Tribune – Trafficking in North Dakota is on the rise, and often the victims can’t escape – Seven part series on human trafficking in the state coauthored by Amy Dalrymple and Katherine Lymn.
One thing I’ve learned in the last few years of blogging is that certain names pop up regularly as authors of routinely superb writing. There is a short list of authors for whom I try to read everything they write. Ms. Dalrymple, who is also a very prolific writer, is one of those.
If you are deeply interested in either the Bakken or the trafficking issue, this looks like a series you will definitely want to read.
First article in the series traces one man from looking on-line for an underage girl through his sentencing to a five-year prison sentence.
1/5 – Forum News Service in Bismarck Tribune – Girls, women trapped in the Game – Second in the series. Follows troubling story of Jenny through 20 years of prostitution to illustrate who gets trapped and how. Physical and psychological manipulation of vulnerable women dispels the sometimes-held idea that women choose that as a lifestyle.
1/5 – Forum News Service in Bismarck Tribune – Native American populations ‘hugely at risk’ to sex trafficking – Article says meth and heroin are major issues on the Fort Berthold reservation. That is distressing by itself with the expected direct consequences. The combined list of dysfunctions increase the risks for Native Americans getting trapped into trafficking. Article says:
Statistics show that minorities represent a disproportionate amount of sex trafficking victims.
In North and South Dakota, when you read minorities, you can translate that to Native Americans. Tragic. The waste in terms of destroyed lives, lost opportunities, suffering, and devastated dreams upsets me.
Multiple groups are working to help victims in the state. New law on the books gives tribal authorities more tools to fight traffickers when cases either don’t meet criteria of the U.S. Attorney or just don’t get picked up at the federal level.
12/28 – New York Times – In North Dakota, a Tale of Oil, Corruption and Death – Long article on immediate and long-term problems inside the Fort Berthold Indian Reservation. Threads of the story come together in one comment by a key player to dispose of radioactive filter socks before the police conduct their search for a dead body.
12/29 – Say Anything Blog – New York Times Profiles Corruption, Murder Involving Heidi Heitkamp “Friend” – As usual, Rob Port provides context that didn’t make it into the NYT article. He asks whether oil is the cause of the corruption or the fertilizer feeding it. He points out the author wrote the two hit pieces on the ND regulators.
If you are really, reeeeeally interested in Bakken, you will enjoy the preceding two articles. Otherwise, likely won’t be worth your time.
If you are deep into the inside-baseball of the Bakken, Mr. Port’s article is key to understand the unstated context of the NYT piece.
12/31 – Dickinson Press – 4.5 pounds of heroin found during Bismarck traffic stop is largest-ever heroin seizure for N.D. Highway Patrol – Four and a half pounds of heroin was found in three vacuum packed bags. A K-9 dog alerted on the car, which allowed a search, which found the drugs. Huge increase in the number of people and the massive amount of cash around is drawing lots of bad stuff to the state.
4 thoughts on “More on the downside of oil production in North Dakota”
Thanks for all the information you provide. Just a comment.
The price of oil has declined significantly in recent months, it is now below $50, and this will have impacts in the Eagle Ford Shale area (and Texas). The average price for 2014 is close to $80, with a high of $107 and a low at $53.
In our last study for the Eagle Ford Shale, on page 69, table 9-2, we show scenarios using a methodology that we developed when Mark Hager and Dominique Halaby were Directors at the CCBR. There you can see that for 2023 the Low Price estimated impacts are close to a third of what the Moderate Price scenario are expected to be (these are the usual impacts presented in the news).
The Low Price scenario assumes oil prices in the mid $60s range for most of the decade ahead. The steps for these estimates are explained in the Methodology section of the study (pp 15-21).
Low Price Scenario Moderate Price Scenario
Year Henry Price of
hub price of oil per bbl Year HH Price Oil
2013 $3.69 $98.34 2013 $3.69 $98.34
2014 $3.15 $76.01 2014 $3.12 $88.30
2015 $3.15 $71.01 2015 $3.12 $88.21
2016 $3.63 $68.01 2016 $3.57 $91.34
2017 $3.74 $66.00 2017 $3.70 $96.09
2018 $3.88 $66.30 2018 $3.96 $98.70
2019 $3.97 $66.60 2019 $4.05 $101.26
2020 $4.08 $66.90 2020 $4.13 $103.57
2021 $4.17 $67.20 2021 $4.26 $105.83
2022 $4.24 $67.50 2022 $4.48 $108.14
2023 $4.31 $67.80 2023 $4.67 $110.50
Source: Energy Information Agency
The link to the study:
Forecasting future oil and gas activities is full of uncertainties, and these results should be taken only as a first approximation and not as definitive results. The studies showed different scenarios based on different price estimations from the Energy Information Agency. This methodology is different from others that do not pay attention to price fluctuations.
Also, a link to a related paper (The Economic Impacts of the Eagle Ford Shale: Modeling and Data Issues) describing the methodology used is shown below. It is from the proceedings of the 2014 Mid-Continent Regional Science Association and IMPLAN Conference:
Center for Community and Business Research
Institute for Economic Development
University of Texas at San Antonio
Thanks for pointing out that table. The one sentence summary for those who don’t want to look at table 9-2 is the low price scenario for the next decade would reduce economic output and employment in the Eagle Ford play by about two-thirds when compared to the moderate price scenario. Impact if prices held in the mid-60s would be quite dramatic.
I hope the price does not stay that low. But this information can serve as a tool for people and businesses in the area.
I hope prices don’t stay that low. My own wild guess is that prices will recover somewhat in the very near term (weeks or months) and will recover more by the middle or end of the year. That’s my guess.
The analysis in the study provides a starting point for considering the long term impact of low, medium, and high prices. People who are reeeeeeeally interested can drill down to the assumptions (see page numbers above), revise based on their own projections of future prices, and make an educated guess at revising the estimates. I’m not in that camp.
Thanks for taking the time to comment.