The Economic Impact of Shale Oil

March 19, 2015 Elizabeth Alford

During a recent event dubbed “Energy Day” in Bismark, N.D. various groups came together to recognize the impact of the oil and gas industry. The day included legislative committee hearings, an education session and facts and figures regarding the industry’s importance to North Dakota’s economy.

According to one study, presented by Dean Bangsund of ND University, oil and gas had a $43 billion economic impact on North Dakota in 2013 and affected many parts of the aspects of the state’s economy. Highlights include:

Retail trade saw the largest impact, accounting for $11.3 billion of the total.
Personal income saw the second-largest impact at $9.3 billion.
The finance, insurance and real estate industry ($4.5 billion) overtook the government
$4.4 billion in government revenues

“Researcher Dean Bangsund told Bakken Magazine “This study helps confirm that the petroleum industry is one of the largest basic-sector industries in North Dakota. Although activity is concentrated in the western part of the state, the magnitude of the contributions to both the state and local governments and the sheer volume of secondary economic effects in nearly all sectors of the North Dakota economy would suggest that the economic effects of the industry are felt statewide.”

With unstable pricing environment, the future is unknown. Most economic indicators remain strong, though unemployment ticked up slightly in January and Bangsund believes that North Dakota will continue to reap positive benefits from the oil and gas industry for some time.

Photo: CC

Anti-Fracking Movement Blamed on Russia

March 18, 2015 Elizabeth Alford

Hamm Claims Russia Financed Anti-Frack Movement

Continental Resources’ Harold Hamm accused Russia of trying to destroy the U.S. shale oil industry.

During an interview at a recent Forbes event, Hamm claims that Russians have worked with environmental groups and financed the anti-fracking movement in hopes of producing panic in the United States.

Hamm of course has a vested interest in the anti-fracking movement. He was a pioneer in the use of horizontal drilling and hydraulic fracturing to extract soil from shale. and has been instrumental in the development of the Bakken shale formation which has sparked a hge oil boom. It is expected that the Bakken will produce more than 1.3 million barrels of oil this year, according to the U.S. Energy Information Agency.

This isn’t the first time such accusations against Russia have been made. In June of 2014, NATO chief, Anders Fogh Rasmussen, said Russia was mounting a sophisticated campaign to undermine the development of alternative energy sources such as shale oil. According to Rasmussen, Russia wants to secure Europe's dependence on energy imports from Moscow.

“Rasmussen stated, “I have met allies who can report that Russia, as part of their sophisticated information and disinformation operations, engaged actively with so-called non-governmental organisations - environmental organisations working against shale gas - to maintain European dependence on imported Russian gas. That is my interpretation.”

For more, go to forbes.com

Whiting Petroleum: Is It Up for Sale?

March 17, 2015 Elizabeth Alford

Whiting Petroleum Reportedly Up For Sale

Rumors have been swirling for weeks that Denver-based Whiting Petroleum might be up for sale and some companies may be biting.

Bloomberg reported on Friday that several companies are expressing interest in Whiting including Exxon Mobil Corp., Continental Resources Inc., Hess Corp. and Statoil ASA.

No one is talking openly about a possible deal including Whiting, who has not given any official statement about their intentions. All information has come from anonymous sources and people who are speculating about what the company may do.

“Bloomberg quotes Phillip Jungwirth, an analyst with Bank of Montreal, who says that “Whiting is probably exploring a sale along with other strategic alternatives, including selling assets, raising debt and selling shares in order to address investor liquidity concerns.”

Some believe that a full sale is unlikely due to the Whiting's heavy debt and that it is more probably that the company will sell off large pieces instead.

In early March, Whiting released its 2014 earning results with CEO James J. Volker boasting a strong year with record production and a string 2015 growth plan. A week later, rumors started to surface the Whiting was looking around for other opportunities.

Whiting was founded in 1980 and became the largest Bakken/Three Forks producer in the Williston Basin after its acquisition of Kodiak Oil & Gas in June of last year.

Population Grows 20% in Williston

March 16, 2015 Elizabeth Alford

Williston, N.D., a city at the heart of the Bakken oil region, is experiencing population growth that is ten times the normal rate, according to a recent study commissioned by the city.

In order to determine how many people use its infrastructure and to project future needs, the city turned to Nancy Hodur, a researcher from North Dakota State University.

Hodur began the study in 2012 with the goal to project numbers through 2014. To accomplish this, she began with census data and then added the numbers from people living in hotels, crew camps, RV parks and other conditional use permitted housing. Hodur’s 2012 projections have held up well, with recent estimates indicating they are all within a 5 percent margin of error.

“We did pretty well," Hodur said. "That bodes very well and reinforces that if we do the hard work to dig out the primary data from the planning department, the city and the county, we can get a good handle on how many bodies — how many noses — are in the Williston area."

Between 2012 and 2014, Williston service population grew 20 percent from 25,915 to 31,143 and Williams County increased 19 percent from 44,308 to 52,778. This huge increase and far above average numbers of around 2 percent.

So far the city has been able to keep up with the increased service demands, but just barely. Public Works Director David Tuan said the wastewater plant is running at 2.5 million gallons a day in order to keep up with a demand of 2.4 million.

Infrastructure maintenance and improvements are a growing concern throughout the state as growing populations and oil equipment demands have taxed the current roadways and services.

Last month, Governor Dalrymple signed legislation that grants massive emergency funding to counties and cities statewide in order to bolster the lagging infrastructure. Williston will receive approximately $64 million of those dollars for improvements.

Bakken Inspires Television

March 12, 2015 Elizabeth Alford

The shale oil boom in North Dakota has been a major force in the United States and has revolutionized the state economy, which now boasts the lowest unemployment rate in the country and a billion dollar budget surplus.

Since 2006, the oil boom has been credited with many things including the revolutionary use of new technology, stabilizing the U.S. economy, contributing to the worldwide surplus of crude and creating a new crop of millionaires.

And now…North Dakota oil has inspired television.

ABC Studios announced on Monday that it has cast Don Johnson for the leading role in its new project Boom, which tells the story of a young couple that moves to the Bakken in search of a better life. Johnson, best known for starring in the 80's cop drama, Miami Vice, will also serve as the executive producer.

“According to Variety, the drama is “set in a modern-day “Wild West,” the potential series tracks the pilgrimage of a young, ambitious couple, seeking a better life, to the oil fields of the Bakken, where they come across roughnecks, grifters, oil barons, criminals and fellow prospectors.”

Other actors cast in the project include Scott Michael Foster Rebecca Rittenhouse and India De Beaufort.

This isn’t the first time the small screen has tackled the subject. Reality television has made several attempts to capture the experience of the oil patch including Black Gold (truTV) , Bayou Billionaires (CMT) and Discovery Channel’s Backyard Oil.