While the massive Bakken oil boom drew hordes of job seekers and international attention to the remote prairies of North Dakota and Montana in recent years, it’s turned into a money loser for most cities and counties in the region.
Crime in Dunn County, N.D., in the heart of the nation’s oil boom, skyrocketed 60 percent in just three years, and the road maintenance budget soared from $1.5 million to $25 million.
The local government couldn’t keep up, with demand for services outpacing the growth in tax revenue by as much as 40 percent. The problem continues as the drop in oil prices in the past year means increasingly less money for the county to spend on projects – while drilling, the truck traffic that eats up the roads, and demand for community services haven’t stopped.
“The gap between revenues and needs is still fairly large,” Daryl Dukart, a Dunn County commissioner, said in an interview. “It will take many years to balance out.”
Dunn County is far from alone. Analysis from researchers at Duke University found that “most local governments in North Dakota and Montana’s Bakken region have experienced net negative fiscal effects” from the shale drilling boom.
“Because of the very rural nature of North Dakota and Eastern Montana, and the very large scale of the activity that’s been taking place, population growth has essentially outstripped local government’s ability to provide services,” said Daniel Raimi, research associate for Duke University’s Energy Initiative.
It is a different story elsewhere in the nation, where local governments have benefited from the drilling surge. In Texas, which led the drilling boom along with North Dakota, “the net financial effects of recent oil and gas development have ranged from roughly neutral to a large net positive,” according to the Duke University research published this week by the National Bureau of Economic Research.
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