Posted on 08/20/2012 3:21:07 AM PDT by Son House
On Thursday, members of the Federal Reserve Bank of Minneapolis took a tour of the Bakken area. The trips was planned so that Bank President Narayana Kocherlakota and his staff could gather more information on what is currently happening in the region from an economic standpoint.
“Obviously, what’s happening here in the Bakken —we took a tour today between Minot and Williston—is quite special,” said Kocherlakota in meeting with the press after the tour. “Just the level of economic vitality is quite different her relative to anywhere else.”
With all the struggles in the national economy, western North Dakota is seen as a beacon of light. Kocherlakota said he felt it was important for his bank, and the nation as a whole, to know that not everyone is going through the same things economically.
“I think it helps convey the important notion that there’s a lot of differences across regions and districts in the United States,” said Kocherlakota. “Very often when we’re making policy, and appropriately so, we really focus a lot on the numbers for the country as a whole, but beneath that is masking a lot of differences across regions, and I think it’s important for us to keep that in mind.”
The oil boom has brought a shock to the labor market in the area, and many things are still trying to catch up.
Kocherlakota said the Bakken is an interesting example of something most people only know through economics classes, and that can help when the Federal Reserve makes policy.
“It’s hard to get labor markets to function as they might in an economics textbook,” said Kocherlakota. “I think being on the ground level here, for me to go back to Washington and talk about what I’ve seen, helps bring that point forward.”
The Federal Reserve Bank of Minneapolis oversees the Ninth Federal Reserve District, which includes North Dakota, South Dakota, Montana, Minnesota, Northwestern Wisconsin and the upper peninsula of Michigan. While the Bakken Region is booming, its overall effect on the district, and the US as a whole, is not as big as it seems, Kocherlakota said.
“When you do the calculations, if you’re thinking about the Ninth district as a whole, there’s just a limited amount that what’s going on here can influence that entire economny,” said Kocherlakota. “The population of the Ninth District is about 9 million people, the population of North Dakota is about 600,000, and then we get into western North Dakota, and it’s an even smaller slice than that. So I think what’s going on the Bakken is extremely important for western North Dakota, it’s very important for North Dakota.”
Despite the small impact the boom has had on the national economy Mary Brainerd, President and CEO of the Class C directors at the Federal Reserve, did see some positives that could help the US.
“I think it’s fair to say that some of what we were hearing about today about technology and new approaches, it sounds like there’s hope that that would have a broader implication than just the Bakken region,” said Brainerd. “That was clearly one of the highlights from my perspective.”
With a boom, there usually comes a bust, and despite all the prosperity, Kocherlakota said people should be aware that it won’t last forever, and to use some of the changes in the area to keep things going.
“I think people should think about this as a windfall,” said Kocherlakota. “I think we should take the viewpoint that it’s not going to last for ever, but what do you do when you have a windfall that isn’t going to last forever, you should invest it, and I think the right way to be thinking about this is how do we want Williston and Western North Dakota to look like in 20 years, and how can we take the resources, as a society, and make Williston what we want it to be.”
You are assuming he is being honest. But he's not. To admit that oil development and private enterprise are doing what the Fed's vaunted "monetary policy" can't, stimulate the economy, would be career suicide (especially with this administration). You could have 100% employment with minimum salaries in the 6-figure range in ND, and the Fed would refer to it as "negligible"...
More 'eastern' oil envy.
Fargo is jealous because li'l ol' Williston (those country bumpkins!) and the rest of Williams County have knocked down more taxable sales than Fargo for most of the last ten quarters, and Fargo is the State's largest city.
What they do not recall, is that there are two gears to an oil boom--flat out or dead stop--and 1982-86 should have shown the Dems that.
Times were so hard then in Dickinson, the joke went, that the Ethiopians offered them foreign aid...and I personally witnessed what can only be described as an exodus from Williston.
The current boom has developed partly because we are blessed with resources which we can exploit, to the benefit of all, and partly because the state has an industry-friendly attitude (Thank You, Ed Schafer!).
How typical of Dems to want to control that, to want to damage that.
We have a saying in the oil patch, one of the first lessons a new hand learns, and it applies here: "If it ain't broke, don't fix it!"
It ain't broke.
There lies the crux of the matter, really.
This Administration has fought oil and gas development tooth and nail. Whenever they could, they hampered permitting, closed areas, shut down offshore, ANWR, and much of Wyoming, to name a few.
(They even became more sophisticated and decides to head the boom off at the pass, but couldn't find a reason to stop fracking, which is essential to recovering the resources we are recovering today.)
So, the industry, being adaptable, did what adaptable industries do, it found places and ways to continue.
Private lands, private mineral rights, and a State with reasonable regulations, and the combination has worked to provide a shining beacon of capitalistic hope in the midst of the socialist gloom which has settled on America.
Of course he can't admit it is working far better than the 'unemployment will stimulate the economy' nonsense of the Democrats could ever work (if it even could). They can't admit the boom in Natural Gas has reduced prices (which they cannot do with the releases from the SPR) and altered the geopolitics of energy in favor of North America. They can't admit that not only did we build it, we came up with the idea, designed it, experimented with it, and made it happen, not only without a heck of a lot of help, but often in spite of the Federal Government.
But I felt morally compelled to explain why he is wrong.
You’re welcome!
That's a good idea. If the assclowns in charge of Illinois started their own state bank, we'd be even deeper in the hole.
Can you imagine Rahm and the other state Dems doling out politically motivated billion dollar loans with taxpayer money? It's bad enough what they've done with our tax revenues.
If the Fed is studying Bakken, the government probably thinks there are taxation and regulation opportunities going unexploited.
The Obamists will kill the Bakken if they get the chance.
We could have another Bakken in Utah and Colorado if we could overthrow the Obamists and their allies peppered throughout the agencies.
The difference is one of who holds the mineral rights. If it’s Federal Land, not much is going to happen under this regime.
No, the Fed is studying the Bakken because academics are hearing that “fracking is saving the economy” and they want to see what is going on far from their ivory towers.
The Colorado shale deposits are largely on federal land I believe, (although some are under private land). That made it easy to shut that down.
I remember reading here (FR) a few years back that there was a project in Utah on private land that was also shut down by the feds. They just really don’t like shale oil.
The Green River beds in Colorado are Oil Shale: the oil is trapped in microscopic pores in the rock (Shale) which are not interconnected. It has to be heated to frack its own way out of the rock.
While it is accepted that the shales are the source of the oil in the Bakken, the actual production there comes from a low permeability reservoir between the shales, or from the Three Forks Formation below the Bakken, where oil generated by the Bakken has migrated. While it is Shale Oil, the wells are in a mixture of siltstone, sandstone, Dolomite and Limestone, and aside from being 'tight' and and having very widespread high oil content, are pretty much similar to conventional reservoirs in the same rock type.
What makes the resource "unconventional" is that the high oil saturation in the rocks persists over a large area, without much regard to geologic structures within the area. (There is some variation, but not as much as with more porous rock).
It is worth noting that on Federal Leases in Wyoming, Utah, and Colorado, a lot drilling was shut down.
If private land is not large enough to be the majority of the required well spacing unit, the nearby Federal mineral rights can, in some cases control whether or not the well gets drilled. Spacing units vary, and the Feds may have been able to shut down private efforts that way.
Thanks for your post 31. I do know the difference between shale oil and oil shale, but not everyone does and its useful to remind people of the difference.
I was recently involved in a solar project that the environmentalists tried to shut down, which was being built on private land, and realize that the fact that something is on private land doesn’t really protect you much these days. They can claim that the solar farm is damaging the water table (really) or any other silly charge and you are on the defensive. You can find yourself under attack for “taking” endangered species that are in no way endangered. At this point it surprises me if anything gets built at all.
I’ve learned not to believe anything an environmentalist says.
North Dakota is lucky to have politicians who are prepared to go to the mat to protect the oil industry. That sentiment is growing perhaps in Utah and Colorado but the anti-oil hysteria is being whipped up and the feds are doing what they can to stop it too.
They have been mining natural asphalt in that region for a century but the enviros are going to go crazy trying to stop anyone from going to the next step. People are going to have to learn to pay them no mind. They are just as hysterical over a solar plant as they are a new oil project; once you know that, you know they are full of it. These are not serious people though they can cause you serious trouble.
Smokin:
Gotta disagree in part with your comment. Heidi and brother Joel are neck deep with the national democrats. Yes, our eastern brothers along the Red River, in particular Fargo don’t like us folks out west any more than obama likes Romney.
Joel took over Ed Shultz radio spot here in ND when Ed went national. When you listen to the democrat propaganda spewing from Shultz’s mouth, feel confident Joel and Heidi are thinking it, but will lie as instructed to mis guide the voters.
Yes the Fargoan’s are jealous, but the national democrats want us chopped down to the rest of the nations economic level. Let’s face it, starving people with no jobs losing their homes and on the govt dole are much easier to control than those that are prosperous and enjoying the freedoms of prosperity.
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It is sad the East side folks (at least some vocal ones) do not realize they, too, benefit indirectly, from prosperity on the West end of the State. I think the papers there started with an op-ed condemnation of the boom town atmosphere, sensationalizing it into some sort of free-for-all by repeating talking points from an unverified e-mail, and then doubling down. The hostility goes on, despite budget surpluses which directly have benefited people across the state, if no more than keeping tax increases and service cuts off the table.
As for the National Democrats/Socialists/Marxists/Communists (it is an amalgam at this point), yes, the Bakken Oil Boom has been a definite thorn in their side.
Not only has the region (and many others) not succumbed to the economic malaise which should have people willing to sell their children for a morsel of food, but instead, it has become a bright and shining example of what can happen if government will let the private sector develop. The enterprenuership (sp?), inventiveness, and sheer industry of the American People are not to be underestimated--and I say American People, because as I have stated before, I have seen license plates in the region from every state--people who have come here to work, to pursue the American Dream. When the opportunity is there, people will pursue it and make the most of it.
Furthermore, while there are some huge corporations involved in the oil industry, there have been incredible numbers of small businesses which have sprung up (and without a doubt, their owners and employees built that!). Most provide services or goods to larger companies, some to individuals, but either way, the idea that there are people out there with more than you have becomes an inspiration to work hard and be inventive, not jealous cause to try to tear down what they have built.
It is more than the shining beacon, it lights the way back to an age of prosperity and freedom, and even more, it undermines the entire Marxist mindset. Given the ability to use our resources and ingenuity, yes, we can build a better and more prosperous America.
Yep, the Democrats hate that. They'll pay lip service to prosperity, all the while doing all they can to undermine it because after 4 years of 'Hope and Change' failing to do anything but drive us all deeper in debt, the oil and gas boom has provided jobs, business opportunity, local prosperity, and even more importantly, hope.
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