Oil boom turbocharges North Dakota growth

By David Shaffer
Minneapolis Star Tribune

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An oil-drilling boom has transformed parts of North Dakota turning grain storage into oil-drilling staging stations like this one near Trenton, North Dakota. (Kevin G. Hall/MCT)

North Dakota was the nation’s fastest-growing state in the past year.

U.S. Census Bureau data show that North Dakota’s population grew 2.2 percent to 699,628 in the year ending July 1, as the oil boom drew workers to the Bakken fields in the western part of the state.

“We had rural population declining in western North Dakota for decades,” said Dean Bangsund, an economist at North Dakota State University in Fargo who has studied the effects of the oil boom. “Now we are looking at growth curves that are just short of astonishing.”

North Dakota in 2012 became the No. 2 oil producing state behind Texas as drillers tapped into shale oil deposits and began pumping record amounts of crude. In October, the oil output was 747,239 barrels, nearly six times the output of five years ago.

Rod Backman, chairman of the North Dakota Census Committee, a group of mostly state officials who advise the government, said the census estimates don’t include at least 24,000 workers who live in temporary camps set up mainly for migrant oil field workers.

He and others see no sign of the population trends changing in the years ahead.

“At some point the drilling is not going to be as fast-paced as it is now,” said Backman, CEO of Covenant Consulting Group, an accounting and consulting firm in Bismarck, N.D. “But when you start factoring in the permanent jobs, the expectation is that we are going to continue to see job growth and population growth.”

Bangsund said the state’s other sectors, especially agriculture and manufacturing, have remained strong. North Dakota’s farmers weren’t hit hard by the drought that struck other parts of the Midwest, he said.

The state’s economic base — a measure of goods sold out of state — grew 11 percent in 2011, the most recent year for which data are available, Bangsund said.

The population boom is mostly driven by an influx of people seeking work, he said. The oil fields alone probably account for 40,000 to 50,000 jobs today, compared with about 3,000 to 5,000 jobs early in the last decade, he added.

North Dakota’s seasonally adjusted unemployment rate in November was 3.1 percent, compared to the nation’s 7.7 percent rate. Earlier this year, North Dakota reported 20,000 unfilled job openings.

Backman said birth rates also are up because many of the immigrant oil workers are of child-bearing age. Some migrants are bringing families to the state, he said.

“We also have a lot more high school and college students staying in the state because of the job opportunities,” Backman said.


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