Rumblings from the Bakken: Greed, Death and Fracking in North Dakota’s Oil fields

Reader Contribution by Alec Weaver
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“Literally, you got the fox in the hen house. It’s easy to see why they — everybody wants to come to North Dakota and do business, because there’s no restrictions,” says safety expert Dennis Schmitz in a recent interview for PBS about the North Dakota oil boom. Since the 2006 discovery of the Parshall oil field in North Dakota’s Bakken shale formation, the state has seen an unprecedented amount of industrial growth. But don’t go singing about the Clampetts and bubblin’ crude just yet. Between January 1, 2006 and October 13, 2014, there were 8,690 environmental incidents reported by the North Dakota Health Department, and a quick search on their spills site will reveal an additional 294 spills between then and June 25, 2015. One part Grapes of Wrath, one part There Will Be Blood, the complete story of North Dakota’s oil boom is a lurid tale of greed, corruption and death.

In November, The New York Times published a three-part series about the conflicts and controversies surrounding the Bakken development. The first part of the series deals with environmental impacts that the oil companies have largely disregarded, as well as the local and state governments which make no attempt to hide their connection to the energy companies. The main arc of the piece concerns North Dakota farmers who have been the victims of chemical spills, and whose concerns have largely fallen on deaf ears. One such farmer is Patricia Jensen, whose farm near Tioga, North Dakota, was the site of the largest on-land oil spill in American history. The government has yet to penalize the company responsible.

The marriage between the oil companies and the government is almost openly flaunted. During his 2012 re-election campaign, North Dakota governor Jack Dalrymple received more than $31,000 in campaign contributions from oil companies that held interests in the then-proposed, now-constructed Corral Creek shale processing mega-unit. While oil-funded politicians are nothing new to the gubernatorial process, the lax policies of the state towards the oil companies is literally toxic. The Times reports that amid a myriad of safety and environmental oversights, a stash of oil filter socks were discovered in an abandoned fuel station in April of 2014. Disposal of these “used condoms” of the oil industry is illegal in the state because they contain high levels of harmful radiation. Unfortunately this is not an isolated incident, these socks are often found in landfills or littering the fields surrounding drill sites.

Despite the seemingly endless growth, the boom hit a bump this year when oil prices plummeted amid a decrease in production in the Bakken. 

“It’s not a situation where you’re going to see a drying up, but you’re going to see a slowing,” explained Wayne Wilson, an industry specialist in a recent piece by CNBC. The pressure from the oil decline may not be felt by the largest of the Bakken-barons, but smaller companies are taking a significant hit to profits. In June 2014, the number of active rigs in North Dakota was 145. A little over a year later the number of active rigs is only 77. One company, American Eagle Energy, a Colorado-based company, filed for Chapter 11 bankruptcy protection in May as a result of the oil decline. The decline is also a big hit for North Dakota’s economy at large. As of May, the state’s unemployment rate rose to 3.1 percent from the previous 2.8 percent that had been reported in November, the month the Times piece was published. “The state of North Dakota is quite dependent on energy-related activity as a source of GDP,” said Jeffery Born, professor of finance, oil and gas expert, and group coordinator at D’Amore-McKim School of Business at Northeastern University in Boston. As oil companies are now looking to new technologies to squeeze every last drop from the Bakken, the story of North Dakota’s oil boom is probably far from over.

Photo by Dave/Fotolia