Bakken Billions

By August 25, 2008Energy

So it’s an international story now, and more than just Canadian coverage. The U.K. Telegraph reports on the Bakken Formation, using the town of Killdeer, North Dakota for illustration:

Mr Kupper, 55, and his wife Dawn, 46, long lived hand-to-mouth raising livestock on land first settled early last century by his grandfather, an ethnic German immigrant from Russia. But the dark days of debt and juggling bills are a thing of the past for the Kuppers. For like hundreds – and soon thousands – of other families in this remote and sparsely-populated region, America’s newest Black Gold Rush is making them millionaires.

Thanks to oil, America’s least-visited state is one of just three with a budget in the black – a surplus of $1 billion for its 635,000 residents.

And with its three bars, two motels, car dealership, pharmacy and post office, Killdeer is an implausible boom town.

Actually, it’s quite a plausible boom town. Back during the last oil boom of the 1980s, western North Dakota towns like Dickinson, Watford City and Williston flourished, grew, grew too fast, and then crashed when oil prices tanked.  Some 40,000 to 50,000 people left the state. An extended drought didn’t help.

We hear this time there’s more appreciation of the commodity cycles, for energy AND agricultural commodities — at least among the public. State government’s spending like a roustabout on a weekend, so that’s a lesson yet to be learned there.

Meanwhile, Agence France Presse last month takes note of the Bakken, reporting: “Entre derricks et éoliennes, l’Amérique balance” — “Between derricks and turbines, America in balance:” “In the face of expensive gasoline and “dependence on foreign oil — an obsession in the United States — two great projects are dividing America: The massive relaunching of oil expolation or betting it big on wind and solar power.”

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