Oil Boom Under Way In North Dakota In the past year, the number of oil drilling rigs has tripled and now stands at about 130. New technology has made previously unprofitable oil reserves there profitable.

Oil Boom Under Way In North Dakota

Oil Boom Under Way In North Dakota

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In the past year, the number of oil drilling rigs has tripled and now stands at about 130. New technology has made previously unprofitable oil reserves there profitable.

MELISSA BLOCK, host:

We're going to hear now from a part of the country where an oil boom has pretty much staved off the economic downturn. North Dakota has the lowest unemployment rate in the nation: 3.6 percent for July. That's in large part because the state has doubled its oil production in just four years.

NPR's Jeff Brady visited the boomtown of Stanley, North Dakota.

JEFF BRADY: Head out to the wheat fields south of Stanley, and the peace and quiet folks around here value is interrupted.

(Soundbite of drilling rig)

Whiting Petroleum owns this tall drilling rig and plans to drill about 400 wells in the region. It can take 20 days to drill just one, according to the company's Blaine Hoffman.

Mr. BLAINE HOFFMANN (Whiting Petroleum): We'll drill two miles down and then two miles out.

BRADY: Hoffmann is a North Dakota native, and he's seen oil booms before. This one started in 2006. The number of drilling rigs in the state has steadily increased to more than 140. Each rig needs a crew and plenty of supplies, which Hoffmann says helps North Dakota's economy.

Mr. HOFFMAN: We've been kind of oblivious to what's been going on out there. Unfortunately, there's a lot of hardship in other states, but we have not seen that. Things have been good here for us.

BRADY: Oil was first discovered in North Dakota's Bakken Formation in 1951. But it's locked away deep underground in shale that doesn't allow the oil to flow freely.

In 2006, crews started using two technologies: extended-reach horizontal drilling and hydraulic fracturing. Now, they can break up that shale underground so oil is more easily released.

Ron Ness is president of the North Dakota Petroleum Council.

Mr. RON NESS (President, North Dakota Petroleum Council): North Dakota was ninth-largest oil-producing state in 2006. Today, we're the fourth-largest oil-producing state, and we're growing rapidly.

BRADY: But Ness says even with the newer technologies, more than 90 percent of the oil in the ground is left behind in the Bakken Formation.

Mr. NESS: This Bakken is so tight, it's like a tombstone or the cement in your driveway, and as the great minds of the future continue to look at technologies, we think we'll get more and more of that oil out of the ground.

BRADY: But some of the oil industry's technologies are controversial. Hydraulic fracturing has come under increasing scrutiny, especially in the more populous Northeastern U.S., where it's used to drill for natural gas.

Many there worry the thousands of gallons of chemicals used for each job could be polluting groundwater. Environmentalists and other critics have similar concerns about using hydraulic fracturing for oil production.

Around Stanley though, residents are more focused on the economic benefits hydraulic fracturing has brought them.

(Soundbite of vehicle)

BRADY: There's plenty of new construction and some, like Betty Harstad(ph), now get royalty payments. She has one well on her farm outside town.

Ms. BETTY HARSTAD: So for farmers it was a nice gift because farming isn't all that economical. There's, you know, a lot of stress with it. So it relieved the stress of some of the farmers in the area that were able to receive royalties.

BRADY: The boom also has attracted more residents to this once-sleepy town. Christie Moore's(ph) husband is a crane operator and they've been following oil and gas booms in Wyoming and now here.

Ms. CHRISTIE MOORE: Moving four times in three years is hectic, but it's better than sitting home crying because you ain't go no money.

(Soundbite of laughter)

BRADY: Lack of money isn't a problem for North Dakota. While other states grapple with tough budget decisions, the state government here likely will have more than a $700 million surplus next year. And that's with a tax decrease and increased spending.

Jeff Brady, NPR News.

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