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North Dakota’s Oil Boom


World events affecting oil prices can have quite an impact on North Dakota’s oil industry. On this date in 1979, Libya joined four other OPEC nations in raising the price of oil. That act had political, social, and economic consequences that continue to be felt today. In 1979, the United States was largely dependent on foreign oil. At the same time, domestic energy consumption was rapidly increasing.

The price hike followed oil embargoes OPEC imposed against the United States in 1973 and in 1977. Each time, the limited supply of oil and the increasing demand resulted in skyrocketing prices. Many policies to address the problem were put in place. The Department of Energy was established in 1977, and a national speed limit of 55 miles per hour was meant to increase fuel efficiency. But America’s energy supply continued to be a political issue.

Concerns only increased after the September 11 attacks in 2001. It became obvious that America’s dependence on foreign oil left the country at the mercy of oil producers. Domestic oil production was seen as the answer to America’s need for energy security, and North Dakota was in a perfect position to respond. Oil was discovered near Tioga, North Dakota in 1951. Since that time, 13,000 wells have been drilled in the state and more than 1.3 billion barrels of oil have been produced. In 1988, horizontal drilling began at the Bakken formation. This area could eventually produce more than 4 billion barrels of oil.

North Dakota has become the third-largest oil-producing state. Oil production has resulted in an unemployment rate of 3.5%, the lowest in the country. The oil industry supports more than 46,000 jobs and contributes substantially to the state’s tax base. Oil production is not without controversy. There are concerns about the environmental impact of both the oil drilling and the continued use of fossil fuels. The derailment of an oil train near Casselton in 2013 resulted in an explosion. It was the third derailment of an oil train in six months, and left people worried about the possibility of more serious derailments. There is also the knowledge that no boom can last forever and questions about what will happen when the oil runs out, or if a price war with OPEC could silence the rigs. But for now, North Dakota is riding high on oil.

Dakota Datebook written by Carole Butcher


Castellano, Anthony and Alex Perez. “Casselton, ND, Evacuation Order Lifted After Fiery Train Crash.” ABC News, 13 December, 2013. "http://abcnews.go.com/US/casselton-residents-urged-evacuate-oil-train-collision/story?id=21376966" http://abcnews.go.com/US/casselton-residents-urged-evacuate-oil-train-collision/story?id=21376966 Accessed 29 November, 2014.

The History Channel. “The Energy Crisis.” "http://www.history.com/topics/energy-crisis" http://www.history.com/topics/energy-crisis Accessed 19 November, 2014.

North Dakota Energy Forum. "http://www.ndenergyforum.com/topics/north-dakota-oil-and-gas-history" http://www.ndenergyforum.com/topics/north-dakota-oil-and-gas-history Accessed 29 November, 2014.

Williams, James L. and A. F. Alhajiii. “The Coming Energy Crisis?” Energy Economics Newsletter, 3 February, 2003. "http://www.wtrg.com/EnergyCrisis/index.html" http://www.wtrg.com/EnergyCrisis/index.html Accessed 29 November, 2014.