In my previous post, I wrote about a WordPress website titled “A Brief History of Oil Production in North Dakota”.  I wrote that this website did not contain opinion or speculation from the website owner, the website presented a collection of relevant North Dakota newspaper articles from the past 65 years, which recorded events that had already happened.

In the website “A Brief History of Oil Production in North Dakota”, one of the things that it showed was that the oil boom in North Dakota from 1978 through 1984 was caused by the price of oil going higher, and the boom ended when the price of oil went back down.  I found some additional articles that explain, pretty much, that this has always happened, and this will always happen.

There is an economic forecaster named George Ure, who has a website titled “ruralpioneer.com”.  In this website, there are several guest articles written by a man “oilman2”.  Oilman2 describes that he has worked in the oil production industry for 45 years.  In one of his articles, he explains his belief on “Peak Oil”, that there has always been a finite amount of oil in the ground, the world is already half way through all the oil there is.  All the easy to get oil, has already been gotten.  Now oil companies are having to go after oil that is deeper and harder to get, like the oil in North Dakota.

Oilman2 explains that when the supply of oil on the market is low, the oil prices become high.  When the prices become high, it is worth it to the oil companies to go after the deeper oil, the oil that requires horizontal drilling and fracturing.  (You can read elsewhere, that many oil industry experts say, that there is no profit in producing North Dakota oil unless the price of oil is at least $80 per barrel.)  Oilman2 explains that as long as the price of oil remains high, deep oil and oil that requires fracturing will be produced.  However, once there is a large supply of oil on the market, the price of oil goes down, and oil companies stop production of the hard to get oil, like in North Dakota.

Starting in about 2014, OPEC was blamed for the low price of oil world-wide because they were producing a lot of oil and there was a large supply of oil on the market.  Here in North Dakota, there were some old-timers working as “lease operators” or “pumpers” that became aware that there was no place to send this North Dakota oil, all of the oil storage facilities in the United States were full.  There was an oversupply of oil in the United States.  So, the price of oil went down, it went down so low that it was not profitable for the oil companies to keep drilling deep wells, drilling horizontally, and fracturing.  About 80% of the drilling stopped in North Dakota.  Jobs went away, workers went away.

In my previous post, I questioned why Baker Hughes, Halliburton, Occidental, and the large property developers in Dickinson did not know that they were at the end of the boom to bust cycle.  There were plenty of newspaper articles describing exactly what happened in North Dakota during the oil boom of the late 1970s, with all the reasons and explanations.  Oilman2 is an example of someone who has worked in the oil production industry for more than forty years, who can explain to you that it is not mysterious when/why oil companies go to an area and start producing oil, and when/why they stop producing oil in an area.

I explained in probably at least four of my previous posts, that it was falsely reported in television news and newspapers that all kinds of people were moving to North Dakota and were making over $100,000 per year.  I have lived in North Dakota for over three years now, and I have only ever met two people who worked in the oil field who made nearly $100,000 per year.  I haven’t mentioned it yet, but there was also this widespread saying here in North Dakota, that this oil boom was going to last for the next twenty years.

If you have read maybe ten of my posts, you can probably detect a tone of anger in my writing.  I do have a lot of anger about how out-of-state workers were treated in North Dakota, particularly in regard to extremely high housing prices.  People were taken advantage of.  Thousands of people moved to western North Dakota because they thought they coud make “$100,000 per year”.  Hundreds and hundreds of people brought their wives and children to North Dakota, and bought houses because they heard and thought, “This boom is going to last for the next twenty years.”

I think that Continental Resources, Conoco Philips, Amarada Hess, Marathon Oil, Whiting, Tesoro Oil, Occidental, Baker Hughes, and Halliburton all knew what was going to happen, they just didn’t know the exact year of the bust.  These large corporations were happy with ABC, CBS, NBC, MSNBC, CNN, Fox News reporting about all the “$100,000 jobs”, millionaires, millionaires being created daily in North Dakota.  These large oil companies really like it when their new hire brings their wife and kids to some place like Williston or Dickinson, and buys a house, this shows that they are making a long-term commitment to be here.  These large oil companies don’t really care that they just let a bunch of workers go, and their $300,000 house, that they owe $250,000 on, is now worth about $150,000 if they could even find a buyer.