Is the Oil Boom Right for Montana?

A modern day gold rush has hit Eastern Montana. The Bakken formation is a massive oil and natural gas formation comprising much of eastern Montana and the Williston Basin in North Dakota. Although oil was first discovered in the area during the 50’s, extraction of those resources didn’t skyrocket until the development of hydraulic fracturing, also known as “fracking”, around the turn of the century. This method of harvesting natural gas and oil made it possible to utilize billions more barrels than initially thought, bringing changes to the community few could have expected.

Consequently, the populations of communities in eastern Montana have exploded in population over the past decade.  The best example is perhaps Sidney, Mont., whose population is expected to increase from 5,000 in the 2010 census to to 10,000 by 2013. This rapid growth has presented many social and economic challenges, including rapid growth in crime for these once-sleepy communities. The Billings Gazette recently reported that the influx of 20,000 to 30,000 well-paid oil workers has resulted in an alarming increase in illegal narcotics trafficking in the area. The FBI and ATF concluded in 2012 that Mexican drug cartels have  smuggled over 145 pounds of methamphetamine, one kilogram of heroin and several kilograms of cocaine into the Bakken area.

These types of crimes were once unheard of in Eastern Montana, and bring to light the consequences of sudden growth in rural areas. The burden on local and state law enforcement has been tremendous, and continues to be a challenge in the face of federal budget cuts. In addition to financial difficulties for government, the cost of living in these communities has increased as well.  Rent in areas such as Glendive and Sidney have increased by 500 percent in some cases. In addition, the cost of groceries and utilities have gone up significantly.

However, The benefit of such growth is also significant. Unemployment in these communities has dropped to well below the national average of 9 percent, with counties such as McCone and Fallon hovering around 2.7 percent. There is potential for individuals with Commercial Drivers Licenses to make over six figures a year with minimal formal education. Exotic dancers in communities such as Williston, ND, have been known to clear $2,000 a night.

It’s increasingly clear that high-paying, low-qualification jobs are available in previously poor communities. Local economies have been stimulated beyond belief, and there is hope that this prosperity will reach long-impoverished communities, including the Fort Peck American Indian Reservation. North Dakota, which ranked 38th in national GDP in 2001, now reports a GDP 30 percent over the national average, with over a billion dollar budget surplus.

With Montana poised to join North Dakota in the largest oil play in the continental United States, the benefits of such economic prosperity are tantalizingly close.  Now, after decades of rural culture and life, is Montana ready for such growth and the accompanying growing pains? Time, and millions of barrels of oil, will tell.