North Dakota Leading The Way In America’s Economic Homecoming

Oil_Pu331

I’m not sure how many people understand just how profound an impact America’s shale oil and gas revolution will have on our nation’s economy, not to mention international politics.

US reliance on the Gulf for its oil – and its consequent need to maintain a dominant presence in the Middle East to keep the oil flowing – has been one of the constants of the post-1945 status quo. That could be turned on its head.

It’s been dubbed “the homecoming”. After decades in which the hollowing out of American manufacturing has been chronicled in Bruce Springsteen’s blue-collar laments, cheap energy is being seen as the dawn of a new golden age for the world’s biggest economy.

The reason is simple. The US is the home to vast shale oil and gas deposits made commercially viable by improvements to a 200-year-old technique called fracking and by the relentlessly high cost of crude.

Exploitation of fields in Appalachian states such as West Virginia and Pennsylvania, and further west in North Dakota, have transformed the US’s energy outlook pretty much overnight. Professor Dieter Helm, an energy expert at Oxford University, said: “In the US, shale gas didn’t exist in 2004. Now it represents 30% of the market.”

As I wrote yesterday, North Dakota is now supplying 12% of America’s total oil production (up from less than 1% a few years ago), and a much larger percentage of shale oil.

And oil is just one part of the picture. Shale gas, as I’ve pointed out before, is having a dramatic impact on energy markets. In fact, America’s startling decline in carbon emissions is due mostly to coal plants being replaced by cheaper natural gas plants on the nation’s power grids.

But, from an international perspective, the impact of America’s shale oil/gas surge may be the most interesting in that it means the US doesn’t have to care as much about what happens in the middle east. The region will still be important, but far less so given our lessening dependence on hydrocarbons from that region.

It’s a cynical truth that one of the few reasons we cared about the endless squabbling in the middle east was because of the oil. They had it. We need it. Because modern economies run on oil. But now we have it, and in quantities that could serve our needs for centuries to come.

Rob Port is the editor of SayAnythingBlog.com. In 2011 he was a finalist for the Watch Dog of the Year from the Sam Adams Alliance and winner of the Americans For Prosperity Award for Online Excellence. In 2013 the Washington Post named SAB one of the nation's top state-based political blogs, and named Rob one of the state's best political reporters. He writes a weekly column for several North Dakota newspapers, and also serves as a policy fellow for the North Dakota Policy Council.

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  • Mike Quinn

    Sadly with our oil wealth North Dakota still has about the worst paid teachers in the country. To top that we have 22,000 children living in poverty and thousands with no health insurance. Republicans are trying to find way to use our oil money to reduce taxes on the rich, the hell with the moochers. Even though the electorate clearly showed they want the rich to pay their share and they like Obama care the message did not penetrate the ears of our local redneck Republicans.

    • Angie Faut

      Well that answers my question… Mike you are a robot… oh sad little obamabot. You should take the red pill and open your eyes. You are sounding like a broken recording! lol

    • Geoff

      Nd teachers are compensated just fine. Remember the unions supported republican governor elect daylrymple. BTW define poverty. Is your definition of poverty that they only have 2 flat screens, one wii, four family cell phones? I personally don’t know one nd child who isn’t fed well.

    • Waski_the_Squirrel

      I am a teacher. I would bring 2 little things to everyone’s attention:

      1. If I can’t make enough money to meet my needs and my reasonable wants, I’ll go do something else. Surveys of teachers show that money is not a priority and I can say this for myself as well. I want administrative support, decent facilities, and the freedom to teach in the best way rather than in some proscribed program that treats me like a moron. There are districts I won’t work for because they don’t pay enough for me to meet my needs and wants. I found one that does pay enough. Others are content there: these schools are staffed. Schools will raise wages when they can’t find staff. I left one school that paid better than my current one because of the rotten working environment.

      2. I fear to see wages driven up too high. Right now it might be possible for districts and states to pay the wages (and remember the districts set teacher salary, not the state). What if the economy turns south? What happens to the high salaries that no longer have the tax base to support them? Do we cut salaries? Fire teachers? Close schools? I don’t want to be like some of these other states where teachers are being laid off or forced to take unpaid furloughs.

      If this boom lasts, teacher salaries will float up.

      As for the poverty: the poor will always be with us. There is no shame in being poor. For many it is a transitory thing as they work to improve their situation. For others, it is a choice. My town is full of new people right now who have moved here to get a job and escape from poverty. Some populations in our state refuse to move where the jobs are and then remain in poverty. Honestly, I have a family member who has taken this option for the last 2 years because he refuses to lower his standards in his job search.

    • splined
  • kevindf

    At least he admits to being a pirate.

    “Piracy is not an easy life, but if you have to do it, Lake Sakakawea is the place.

    Mike Quinn sails on scenic Lake Sakakawea, located in western North Dakota.”

    http://www.summersailstice.com/articles/viewarticle/92/

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