Jobs, Jobs, Jobs – thar’s oil in them thar fields

The jobs are out there.  But you must be willing to go to them.  North Dakota is the place, but it is not where people normally think about.  It is cold, windy and flat, with little to no night life.  The jobs –  are working in the oil patch.  This is nothing new; as I drilled in there in the early to middle 1980s.  Back then we drilled vertical wells to 14,000 feet.  When we drilled into the Bakken and Three Forks and analyzed the formations with drill stem tests (a test the measures the oil productivity potential), it tested oil, but not at an economic rate to make it worth completing.  So, we left it behind pipe.  We all knew that at a higher price in the future, they would make nice wells.  

The future is here and now, not just because of the price, but because of the advent of technology.   Two technologies have advanced that make these formations economic – horizontal drilling and fracturing (I will come back to this in a future blog).  This has created a drilling boom and the need for all kinds of jobs – construction jobs of all kinds (residential, commercial, hotel, water tanks, oil tanks, pipeline, etc.), restaurant jobs, trucking jobs, small store jobs, waste removal jobs, mechanical jobs, etc.  The point here is that this industry, reviled by most of the nation, provides great paying jobs.  When an industry is allowed to grow, unintended consequences develop – good unintended consequences.  It does have negative unintended consequences too, like water use and waste disposal and inflation.  These are things that can be dealt with in time and with good planning.

In a previous blog, I mentioned the Keystone XL pipeline that could provide 20,000 jobs.  The complaint is that these jobs are transitory and poor for the environment.  While environmentalists are needed to make sure that the environment is not abused, practicality must be considered.  Environmentalists have become anti-job creators, but it must remembered that the job creators (energy companies) pay for their ability to be anti-job creators.  In both the Keystone XL and North Dakota cases, these jobs are well paying and will last for years.  Yes, the energy industry goes through boom and bust periods, but what industry does not.  In a recent StarTribue article, they reported that the state of North Dakota had an influx of 35,000 people willing to take those jobs listed above.  This boom started around 2005.  On the Job Service North Dakota website today, it listed an additional 17,454 job openings.  As a result of the two technologies mentioned above, oil production in North Dakota has increased from 45.424 million barrels per year in 1981 to 113.033 million barrels per year in 2010, according to the Energy Information Administration (see the EIA chart below). 

That oil production increase and oil price increase has resulted in a $1 billion state budget surplus for North Dakota.  That is worth repeating – a $1 billion state budget surplus.

WE NEED THIS TYPE OF ENERGY - STRONG JOBS AND A REDUCTION OF FOREIGN DEPENDENCE.