North Dakota’s prosperous oil-powered economy remains as strong as ever despite the wishful hopes and claims of left-leaning media that the state economy will go bust.
On June 27 the Atlantic published an article titled “A North Dakota Oil Boom Goes Bust,” with the subhead “What will happen to those who built their lives on it?” The theme of the article was North Dakotans are suffering miserably and being played the fool by a predatory oil industry that soaked up the state’s oil when prices were high and have now shut down operations. The end result, according to the Atlantic, is abandoned “graveyards” of formerly productive oil rigs, rapidly rising unemployment, “unraveling” economic conditions, and a statewide economic bust that is “diminishing” the lives of those who live there. The Atlantic’s message is unmistakably clear – North Dakotans are worse off now than before North Dakota oil production took off, and it would have been better for North Dakotans if the oil boom had never happened at all.
The Atlantic’s decision to publish such an article seemed rather odd to me, given that the Atlantic has been making this same wishful claim for more than two years. In February 2013 the Atlantic published an article titled “Is North Dakota’s Miraculous Boom Already Over?” Apparently it wasn’t, given that the Atlantic is still trying to make the same fanciful argument more than two years later. The Atlantic’s February 2013 article claimed “North Dakota’s economy fell back to earth” in 2012. “The drop-off is striking,” the article claimed. Yet the only thing “dropping off” in 2012 was the state’s unemployment rate. North Dakota’s average unemployment rate in 2011 was 3.5%. North Dakota’s average unemployment rate in 2012 was 3.1%. In what galaxy does an unemployment rate that drops from 3.5% to 3.1% constitute an economy “falling back to earth” in a “striking” manner?
Yet the Atlantic’s doom-and-gloom storyline is relatively tardy and muted compared to others in the left-leaning media. CNBC, for example, published a January 2012 article titled “America’s Oil Rush: Bust or Boom,” claiming horrible consequences of 3.1% unemployment and six-figure incomes in North Dakota in the midst of national economic stagnation. According to CNBC, North Dakota’s high worker pay and plentiful jobs meant North Dakotans were being “crushed by truck traffic, plagued by lagging infrastructure, and shocked by a surge in violent crimes.” How horrible! If only North Dakota would have had the joy of experiencing the Great Recession like the rest of the nation, then state residents would be happy!
In February 2012 CNBC published a follow-up article titled “The Downside of N. Dakota’s Oil Boom.” The article highlighted an increase in bar fights, DUIs, and crime incidents as more people moved into the state to take advantage of the state’s booming economy – as if the raw number of crimes could be expected to stay the same despite a growing population. By the Atlantic’s flawed logic, Americans were better off in 1935 than today because a much smaller, less prosperous population meant fewer bar fights.
Now, curiously, CNBC has changed its tune and claims prosperity is good but an oil bust is creating economic decline in North Dakota. Workers have “suddenly been left with no income” because oil production is falling, CNBC claims in a June 27, 2015 article, “Is North Dakota’s economy oil-rigged?: The Nation’s second-largest producer of oil is taking a hit from the decline in production.”
According to the Atlantic, CNBC, and others in the left-leaning media, economy prosperity is horrible if it is caused by oil production, and economic decline is horrible if it is caused by oil production.
The underlying reason for the left-leaning media’s negative portrayals of North Dakota’s remarkable economic growth and prosperity is the media’s knee-jerk opposition to fossil fuels, and to oil production in particular. So when North Dakota oil production creates one of the most remarkable economic success stories of our generation, the media feels an irrepressible urge to portray the state’s economic growth and prosperity as a horrible thing.
The inconvenient truth for environmental activists and their media allies is North Dakota’s oil-production economy continues to bring prosperity and higher living standards to North Dakota. Despite media claims to the contrary, the North Dakota economy is still doing extremely well. Unemployment remains at 3.1%, the exact same rate it was in January 2012 when the Atlantic wrote about the state’s economic prosperity. Since 2012, moreover, the state has built up a large reserve of funds to be spent on schools and infrastructure, paid for by taxes and royalties on oil production. Many private businesses in the state start entry-level employees at $15 per hour, which is the very same “living wage” left-leaning politicians lament is not being paid as a mandatory minimum wage throughout the nation.
Bette Grande, a former North Dakota state legislator, summarized it best to me:
“To fully develop the Bakken and Three Forks formations it will take a total of 46,000 wells. To date, just under 10,000 wells have been drilled,” Grande explained. “That means there are 22% down and 78% to go! These wells will be drilled. The price of oil will determine the pace. When we had 200 rigs drilling in North Dakota we added about 2,400 wells per year. At that pace it would take 15 years to drill all the wells necessary to develop the resource. Today, at $60 oil we will drill and complete under 1,000 wells per year and at that pace we will be drilling wells for another 36 years! And the average Bakken well will produce oil for 30 years. We will be here awhile.”
“Last month Job Service North Dakota listed 25,000 jobs open in western North Dakota,” Grande added. “These are not the same jobs that were open the last few years, but jobs just the same. The North Dakota legislature appropriated over a billion dollars for infrastructure in western North Dakota. The slowdown in drilling activity means jobs are available in road construction, public infrastructure, and school construction.”
So the next time you see a media story claiming all sorts of woes in North Dakota and its oil-based economy, remember to check the facts. That is, after all, what the media used to do.