Oil Boom Still Insulating North Dakota from High Unemployment rate
A right mix of natural resources, industries and skilled workers is the secret to a prospering economy and low unemployment rate. North Dakota is blessed with all of the above making it the state with lowest unemployment rate in the entire nation.
According to the data released by Bureau of Labour Statistics for the month of April, North Dakota has 3.3 percent of unemployment rate, up by 0.1 percent from the month of March. This is one of the three states whose unemployment rate rose.
The oil boom in 2008 changed the fortune of the state and the advancement in hydraulic fracturing generated plethora of employment opportunities attracting folks across the country to it. Hydraulic Fracturing is a technique used to safely extract natural gas.
The state’s unemployment rate has not touched 5 percent since 1987. It has the highest rate of GDP contribution towards the economy and also the fastest growing state in America. The boom in oil industry gave a super boost to real estate and other service related industries helping North Dakota to curb its unemployment.
Need For Faster Development
Living in a car may sound strange to you but this is the way of life in North Dakota. The city Williston does not have enough homes to accommodate the migrant population.
Economist Nancy Hodur, an associate research professor at NDSU (North Dakota State University), said there is a potential for 14,000 total new units in the boomtown.
“Some housing is getting better. Communities are building as fast as they can,”Hodur said.
Dormitory style barracks known as “man camps” have been built for oilfield workers who have migrated here for employment opportunities, but with poor sanitary facilities and they lead lonely lives.
Justin Glasgow, director of real estate investment banking at Robert W Baird, said the authorities in charge of the development of the state have a long road ahead.
Environmental Concerns And Oil Industry Domination Troubling The State
According to the MPR report, North Dakota is producing more than 700,000 barrels of oil per day and is second to Texas in domestic oil production in the nation, with energy production fueling a nearly $2 billion budget surplus in the state.
The technique used for extraction is much debated issue.Hydraulic Fracturing can cause irreparable damage to the earth and result in earthquakes in the long run.
A report by the National Research Council, suggests that hydraulic fracturing is unlikely to trigger large earthquakes. However, the study does point to the risk of man-made seismic activity when waste water from the drilling is injected back into the ground.
“While the general mechanisms that create induced seismic events are well understood, we are currently unable to accurately predict the magnitude or occurrence of such events due to the lack of comprehensive data on complex natural rock systems and the lack of validated predictive models,” the study reports.
Hydraulic Fracturing in the veins and deep down the earth allows groundwater to come in contact with oil and leads to contamination. Naturally, the EPA and watch groups are up in arms against this environmental hazard which pollutes the air, contaminates the soil surface and pollutes water in a long run.
If many people still support fracking, in spite of all the drawbacks, it is because of the oil potential, an important factor to reduce dependence on imports. Together with horizontal drilling, fracking has made the economy of North Dakota a success.
On the other hand large number of migrants are working in oil fields while the other jobs are going vacant.
“People will come here to work for the oil companies, and they will make good money, but when they just come by themselves, you no longer have a teenager to work at McDonald’s, or a spouse who might be a nurse at the hospital,” Ward Koeser, the mayor of Williston, said in a Bloomberg interview. “So the service sector is what’s really suffering right now.”
North Dakota has an opportunity to grow better if it manages to get manpower into other service industries as well. Unemployment rate would hit a new low and help establish a better life aiding faster development.