Letter from Elkhorn Ranch — From the March 2013 issue

Bakken Business

The price of North Dakota’s fracking boom

The prairie reveals. Any hilltop’s field of vision opens to evidence of energy and motion, fresh tracks, today mostly tire tracks of the present, but also old tracks through time. I have come to North Dakota to single out a particular and peculiar set of tracks — hoofprints, really — for what they tell us about our destruction of the natural world.

Theodore Roosevelt arrived in the town of Little Missouri, in the center of the Dakota Territory, in 1883, in his early twenties, then all buckskin, bluster, teeth, and glasses. He came first of all to kill animals and then to write about it. But Roosevelt was already an accomplished naturalist and convinced Darwinist, and he came also to see the raw nature then on display in the Badlands, a stark landscape of eroded clay and red scoria in the southwest corner of what is now North Dakota, a bit of geologic chaos that serves as counterpoint to the gentle prairie all around.

The year that followed was disastrous for Roosevelt. On Valentine’s Day 1884, his mother, Mittie, and his young blue-blood wife, Alice Lee, herself recently a mother, died in the same house on West 57th Street in Manhattan. That summer, at the Republican National Convention in Chicago, he suffered a professional setback to go with his personal catastrophe when his preferred candidate was kept off the ticket. Instead of heading home from the convention, Roosevelt took a train straight from Chicago back to the Badlands, this time intending to stay a while. He bought a ranch, which he named the Elkhorn. Roosevelt wrote volumes about the Badlands, but never about what settled his grief while he was there. In any case, when he returned to New York and to politics, in 1886, he was transformed.

Before heading west, Roosevelt had already made a name for himself as viscerally and implacably opposed to corruption, taking on Tammany Hall in the New York legislature, laying the foundation of what would become a career of trust-busting that closed the Gilded Age and eventually broke up John D. Rockefeller’s megamonopoly, Standard Oil. But at the Elkhorn he learned a deep engagement with the landscape, a love of the wild, and he reinforced an obsession with the strenuous that would take him through life. His character formed. What happened there propelled Roosevelt almost single-handedly to found the American conservation movement, leading one Roosevelt scholar to call the Elkhorn the “cradle of conservation.”

As president, Roosevelt would call monopolists like Rockefeller “the most dangerous members of the criminal class — the criminals of great wealth.” The grit of this excoriation may perhaps have come from the Elkhorn, but certainly it came from no place modern political leaders have been. Today, the Elkhorn is home to at least five active oil wells run by men in John D. Rockefeller’s line of work.

Asked to rank American oil-producing states in order of productivity, most of us would begin with Texas and Alaska. Some might think to add California. Until very recently, that was correct. But North Dakota surpassed California in December 2011 and Alaska the following March. Production in the state has quadrupled in less than a decade. At this rate, it will surpass Texas in another decade, around the time the United States surpasses Saudi Arabia as the world’s leader in oil production. All of this will be thanks to lessons learned extracting oil from the Bakken formation, which happens to include Roosevelt’s ranch.

The Bakken is a massive bed of rock in three layers: dark ones on top and bottom and a lighter one sandwiched between, the middle layer’s pores richly endowed with oil — light tight crude. The image of the Oreo cookie, often invoked to describe the Bakken, captures its uniformity of structure and its color scheme but fails miserably to describe the obduracy and scale of this 25,000-square-mile slab, which is in places up to one hundred feet thick. It sits two miles below the surface — mostly in western North Dakota but also extending into eastern Montana and the southern edges of Manitoba and Saskatchewan.

Geologists have long known there is oil beneath the northern Great Plains — the formation got its name in the 1950s from the farmer who owned the site of the first producing well. But for almost half a century, the region’s few wells were thought to draw from isolated pools. Shortly before his death in 2000, a United States Geological Survey scientist named Leigh Price circulated a paper concluding that the Bakken was a single deposit that held 413 billion barrels of oil. Price’s methods remained contested for some years, but even conservative estimates now put the Bakken’s holdings above 100 billion barrels. (By comparison, current “proved reserves” — the known amount of oil that can be economically extracted with current technology — for the entire United States are 23 billion barrels.) Around the time Price first outlined the true scope of the Bakken fields, refinements in extraction techniques suggested how to make them pay.

Hydraulic fracturing — now widely referred to in shorthand as “fracking” — uses water treated with chemicals to break apart rock formations. Oil and gas have long been coaxed from fissures, gaps, and cracks in rocks; fracking is simply a way to artificially induce more cracks (some of them more than half a mile long) by filling a bore hole with water, pressurizing it to as much as 8,000 pounds per square inch to split the rock, and forcing coarse material like sand and ceramic in to keep the new clefts open, thereby allowing them to produce for decades.

Fracking was developed in Texas in the late 1940s, but this technique alone would not have been enough to unleash the full potential of the Bakken. All the formation’s oil was tied up in a thin layer of rock, a puny target when viewed down a narrow vertical well, but plenty big if approached horizontally. A 2005 breakthrough in directional drilling finally gave oilmen the ability to bore two miles down to the oil-laden white layer of the Oreo, then send a second, flexible drill to bend the well before drilling another two miles horizontally. But even after this development, it took a 2009 innovation called multistage fracking to make the oil flow profitably. Bit by bit, the oilmen learned that the rocks yielded best when drill operators sent rubber-coated plugs into the hole at thousand-foot increments, expanded those plugs to block the hole, fracked, then moved the plugs down the line to frack again, a sequence they repeated dozens of times. The process takes about a week, sucks down as many as 3 million gallons of water from 400 or so tanker-truck loads, and requires the assembly of a small army of supply and pumper trucks at each wellhead.

Here is the revolutionary discovery of the Bakken, a discovery that threatens to replay in vast, currently untapped oil-shale deposits in North America and worldwide: It no longer matters where an oilman drills a well. What matters is what he does in the hole once it is drilled.

To the north of Watford City, an hour’s drive from Roosevelt’s former ranch, is the nucleus of what was once a prairie farm town, but it has been swallowed in a highway sprawl of workers’ camps, truck yards, pipe yards, fuel stations, machine shops, dust, and gravel. An oil-industry spokeswoman in Bismarck acknowledged the effect of the boom to me the day before I visited Watford, but added that I should report the people there were living in a “progress zone.”

This isn’t the kind of language one hears from Gene Veeder, the county’s director of economic development, who is not simply a glad-handing booster of commerce but a thoughtful, genial guy with a guitar case propped in the corner of his office. He started on this job nineteen years ago, when it was much like being the economic-development director in any small town in the Great Plains, a region that has been losing rural population since 1909.

“Now I meet more people in a week here than I met in twenty years,” he says. Before, his job was simply impossible; now it is something like being charged with ensuring that the wind blows.

Veeder is open enough about the downsides of the oil boom: “It did bring the world outside into the community, and that was an eye-opener,” he says. “People are just overwhelmed with the drugs and prostitution and fights and all the things that come with oil fields.”

He tries to get to know some of the men, a few with families, arriving in the unbroken string of pickup trucks, and he finds they bear news from the Rust Belt, the logging towns of the Northwest, the housing-busted South. He hears again and again from men coming to start their first jobs in years: truck drivers, electricians, carpenters, equipment operators — men who were raised to expect that if they worked they would get paid, who for a long time and in a lot of places in this country found that to be untrue but are now finding it true in Watford. Difficult to imagine the politician who will now stand between these men and their oil-field paychecks.

Veeder was born and raised nearby, on his father’s 3,000-acre ranch, which he now owns along with the knowledge that no one can run a ranch that small in western North Dakota and make it pencil. He did not get rich in the oil boom. His ranch is typical in having been cobbled together bit by bit from smaller farms of homesteaders busted in the Dust Bowl. Many of those people had already sold off their mineral rights, so these days decisions about whether to lease to prospectors are often made not by those who own and occupy the land but by shirttail relatives and descendants who never saw the farms. Veeder himself retains mineral rights on about 10 percent of the acreage of his ranch, a proportion he says is typical.

“I’m looking at oil wells right now from my house, and if I had ’em, well my God,” he says. Nevertheless, his daughters, who had moved away to begin lives elsewhere, have moved back. One son-in-law works at Marathon, the other at Halliburton, senior-level people. “They are building new houses right now,” he says. “That’s something nobody talks about, but one [daughter] is living on the ranch, and she could not live on the ranch without oil.

“For me personally, having the ranch out there, I wish [the oil boom] would have never been here. Okay. But I do remember when my last child left home, and she was never coming back,” he says. “Now I get to live the rest of my life the way I want to.”

This is not to say that out-migration has ceased; it has simply shifted demographics. Longtime residents are leaving, sick of the clutter, noise, and crime and pushed by the fact that free-and-clear houses are worth five, six, seven times what they were a few years ago.

The popular mythology of oil leans heavily on the figure of the wildcatter, the man who takes on undeniable risk and wins megabuck rewards as he pioneers the world’s great deposits of petroleum. There are no wildcatters in the Bakken, not now. Every single well drilled in the area has a 99 percent chance of producing oil for about thirty years in predictable and tapering amounts. Wells drilled into the proven area generally enter the black when oil is above fifty or sixty dollars a barrel, which it has been for most of the past eight years. This is no longer wildcatting; this is plumbing. The odds of success are set in stone.

There are 8,025 producing oil wells in North Dakota. Their density and layout form a haphazard pattern so far determined by the caprice of the market, offering little idea of what shape development will take in the future. What one sees is not so much production as flags and stakes claiming territory. Almost all of this landscape is privately held as ranches and farms, meaning that the 2,000 new wells to be added this year could require nearly as many separate leases. The technical breakthroughs since 2005 have yielded a rush of three-year exploration deals. Drillers generally must complete a producing well within this period to extend the lease. Then they can go back and drill as many wells as necessary to get all the recoverable oil.

Every Bakken well produces natural gas in addition to crude oil, but there is insufficient infrastructure — pipelines and processing plants — to handle it. Natural gas’s current low price undermines the incentive to build this infrastructure, and anyway there is no time to wait, given the competitiveness of oil extraction. About a third of the natural gas now flowing from the Bakken, enough to heat half a million homes each day, is set alight at the wellhead, producing a landscape of flames in robust competition with the stars. Recent nighttime satellite imagery of the plains between Minnesota and Montana shows two big sprays of light on the ground below: one is formed by the urban area around Minneapolis–Saint Paul, the other by Bakken gas flares around Williston, North Dakota.

The future promises to be even brighter. The optimum spacing for wells is something like one every two or three square miles.[*] The oil in the stone slab below does not move or vary considerably in distribution, so grab a map and start sticking it with pins. Make a grid that roughly replicates the property survey first imposed on this landscape with white settlement. People have done the math; fully developed, plumbed, and producing, the Bakken will support between 35,000 and 45,000 profitable oil wells, at least seven times the current number.

[*] Correction, published in the May 2013 issue: "Bakken Business" incorrectly states that oil wells are optimally spaced two to three miles apart. This is in fact the optimal spacing for well pads, which can contain up to twenty-four wells.

Even the trivial effects seem not so trivial in multiplication. During the first year of a well’s life — the hustling year of drilling, plugging, and fracking — it will require 2,000 truck trips. The beat-up two-lanes and gravel or red-scoria section-line roads that thread between wells handle at least 4 million trips a year. Farmers and ranchers who live on these back roads no longer open windows in summer because of the dust. The usual roadside litter is now dependably punctuated with “trucker bombs” — spent plastic soda bottles filled with urine — rest stops on the prairie being few and far between.

Trucks need drivers; roads need builders; fleets need mechanics; men need houses, which need carpenters; rigs need workers; the hundreds of new companies in the Bakken need accountants, flacks, lobbyists, surveyors, negotiators, paymasters; and all these need Walmarts, Holiday Inn Expresses, ATV dealerships, gun shops, strip clubs, and greasy spoons. What reaches the outside world is the bottom line: North Dakota has the lowest unemployment rate in the nation. The oil companies cannot deploy workers or build rigs fast enough to get the job done. The Walmart in Williston offers seventeen dollars an hour to start, twice the national rate. The sanitation department in Dickinson, a city of 23,000 whose population is expected to double in seven years, cannot retain its employees, many of whom are licensed truck drivers and have been recruited literally right out of the cabs of their garbage trucks by the oil companies. Skilled workers of any level easily make six figures.

The evidence of this growing labor force is more apparent on the land than are the wells themselves. Williston, which in the 2010 census was recorded as having fewer than 15,000 people, built a total of 166 houses and apartments in 2009; this year, planners expect to build about 2,300. Watford City was a wide-spot-in-the-road village of 1,700 people three years ago. No one knows the population today, but the best guess is 7,000 and growing. All of the towns are ringed by “man camps,” the local term of art for barracks-like installations of trailers and modular homes that can hold upward of a thousand workers. Companies add housing in chunks, taking some effort to provide the best, since desirable quarters serve as recruiting tools.

Newcomers lacking company housing live in trailers and RV parks, or, failing that, in clutches in parking lots at the ragged edges of towns or on plots leased out by farmers at prices far above the market yield of wheat. Many live in cars. In February of last year, the Williston Walmart reversed its long-standing policy of allowing campers to squat in its parking lot. This, by the way, is the same Walmart where Michael Spell and Lester Waters, having come to the Bakken from Colorado in search of oil work, bought a shovel (which they returned for a refund three days later) to bury the body of Sherry Arnold, a schoolteacher from Sidney, Montana, they allegedly killed while on a crack binge. Besides traffic, people here talk about the crush of population growth, by which they mean outsiders; the capstone of this discussion is Arnold. It isn’t simply talk: in the months after the murder, newspapers in the region reported an increase in sales of handguns and pepper spray in this place where less than a decade ago no one locked doors. In January, the New York Times noted a spike in sexual assaults in Williston, where single men outnumber single women almost two to one. Pharmacies there have been held up for prescription painkillers, OxyContin being a favorite. Last summer, a group of enterprising Korean women began running a prostitution ring from an RV in Bainville, Montana, a hamlet once dominated by the white steeple of a clapboard church, now by an oil derrick.

All this is entirely in keeping with the historical record. These towns are, after all, boomtowns, specifically oil boomtowns. The industry began in western Pennsylvania just before the Civil War. One early example was the aptly named Pithole Creek. “The whole place,” a visitor wrote, “smells like a corps of soldiers when they have the diarrhoea.” Reported The Nation, “It is safe to assert that there is more vile liquor drunk in this town than in any of its size in the world.”

“Our quality of life is gone,” a county commissioner named Dan Kalil testified last January to the North Dakota legislature’s Energy Development Committee. “It is absolutely gone. My community is gone, and I’m heartbroken. I never wanted to live anyplace but Williston, North Dakota, and now I don’t know what I’m going to do.”

Mike McEnroe is a biologist retired from a career in the U.S. Fish and Wildlife Service. He remains active in the North Dakota Wildlife Society, a chapter of an international group that traces its roots directly to the early-twentieth-century environmentalist Aldo Leopold and indirectly to the circle of New York patricians and scientists a young Theodore Roosevelt recruited to serve in the country’s nascent conservation movement. In early 2011, the chapter gathered for its annual meeting, usually a mostly social event; but talk soon turned to the Bakken, beginning, as these things do, with some problems concerning wetlands and an obscure little bird, the piping plover.

A delegation was got up to go have a look. McEnroe says he envisioned packing clubs and coolers of beer in the trunk and spending a few fine days in prairie country alternating between rounds of golf and tours of wetlands. The visit, however, coincided with the summer melt, which followed two winters of significant snowfall. The Little Missouri and Missouri Rivers were in full flood.

The recent national opposition to the Keystone XL — an extension of the pipeline system currently delivering oil from the Canadian tar sands to the United States — rallied around the possibility of spills of crude in Nebraska’s Sandhills. There were at least 1,100 spills in North Dakota’s stretch of the Bakken during 2011. We don’t know much about the nature of each of these, but McEnroe’s group saw something of the scope of the problem in touring a few dozen of the Bakken’s nearly 5,000 wells.

At one site, the group counted nine active oil wells, all of them flooded with Missouri River Basin water. The oil company in charge of the site had had to pump its oil-storage tanks full of water to prevent them from floating away. Each active drilling site has a “reserve pit,” a swimming-pool-size hole adjacent to the rig that catches what workers call “cuttings” — the rock dust produced by drilling — as well as salt water and frack water and chemicals pumped back out of the hole along with the first few barrels of crude. State regulators do not keep track of this mixture, but one landowner in Stanley, North Dakota, did, sending a sample of reserve-pit soil and water to a lab. It contained benzene, toluene, and xylene (all suspected carcinogens), along with diesel fuel.

McEnroe’s group arrived at one site two months after spring floods had sent reserve-pit water into the Missouri. They found the berm designed to prevent runoff still breached. Biologists reported streams with layers of belly-up fish floating near the surface downstream from wells. The pathways of previous drainages were marked by a sort of scorched earth: dead vegetation, killed by effluent. They shot photographs, wrote a report, and sent it off to the state in December 2011. McEnroe says they haven’t heard much back.

Anne Marguerite Coyle is an eagle biologist, and just before the boom, she tagged eighteen juvenile golden eagles as part of a routine monitoring effort. All are now dead or gone. In one case, a drilling rig landed close to one of the eagles’ nesting sites, so when that bird disappeared, she asked people nearby what had happened. “Oh, somebody shot that one,” they said. Gunplay, the roads, the rigs, the noise, the trucks, the off-duty oil workers on ATVs, the general disregard for anything living that is the consequence of industrializing a once-wild landscape — these make it impossible to pinpoint oil’s role in the eagles’ fate. But if they weren’t killed by oil, they were likely killed by the things oil brings with it.

Coyle reminded me of a biological phenomenon called allelopathy, a devious and successful survival tactic of a number of species of plants that secrete chemicals to alter their environments, making it impossible for other species to inhabit the same places — not killing competitors, but subtly forcing everything else to go away.

Drillers talk about the “recipe,” the particular combination of technique and chemicals that makes a particular bed of rock yield its payload. Once we got the Bakken’s recipe right, there were no more decisions to be made, save the hundreds or thousands of piecemeal decisions made over kitchen tables when people sign leases. You might hate the idea of oil rigs on the family ranch, but if you don’t sell someone else will, and it’s all going to hell anyway, so might as well sign. We do not decide whether to drill oil. Price decides. Price and how much is in the ground.

Current extraction methods have placed as many as 24 billion barrels of Bakken oil within reach. But the recipe can still be improved: this number is less than 3 percent of some estimates of the amount of oil in that Oreo. Drillers in some areas report recovering as much as 12 percent of the oil they estimate to be in the rock. Existing technology, which for all intents and purposes has been in use about four years, is now being tinkered with on 5,000 wells. How will all this newfound ability and knowledge play out across continent and globe? The U.S. Energy Information Administration estimates there are 220 billion barrels of shale oil now technically recoverable in the United States, nearly ten times current proved reserves.

Fracking of the Marcellus formation in the Northeast has met some resistance — partly because the formation yields natural gas, which is harder to contain than liquid oil, but mostly because the greatest force of environmentalism — “not in my back yard” — is in full rage in a region that has not only actual back yards but also major media markets. The Bakken, meanwhile, has developed as it has without so much as creasing the nation’s political discussion.

With this lesson in hand, how about Wolfcamp in Texas, a shale deposit oilmen are now touting as being bigger than the Bakken, part of the much larger Permian Basin? How about the Eagle Ford in South Texas and the Barnett in North Texas? Colorado’s Niobrara, Arkansas’s Fayetteville, Michigan’s Antrim, and the Monterey in California? There are at least twenty active shale plays in the United States. Worldwide? There are major shale deposits in Argentina, Australia, Canada, China, Mexico, and South Africa.

Amid a devastating national recession, North Dakota boasts about its 3 percent unemployment rate and about attracting its kids back home from the Twin Cities with high-paying jobs. Amid catastrophic cutbacks in state governments nationwide, North Dakota socked away a $1.6 billion budget surplus. The state has led the nation in wage growth since 2009, with an average of 9.3 percent a year. The closest competitor is South Dakota, at 5.1 percent. Meanwhile, the boom is pushing the United States toward energy independence.

“Our dependence on foreign oil is down because of policies put in place by our administration, but also our predecessor’s administration,” President Obama said last year. “And whoever succeeds me is going to have to keep it up.”

In our divisive political world, anything this bipartisan is a done deal. Obama’s statement came during a series of speeches he made last March that included an appearance in Cushing, Oklahoma, where he restated his support for the building of the southern half of the Keystone extension, the construction of the northern half of which his administration tabled in a fight with Republicans in Congress. Obama’s support has little to do with delivering Canadian tar-sands oil to refineries in the Gulf and lots to do with the Bakken, which the Keystone would tap at Baker, Montana. The pipeline is designed to relieve a bottleneck caused, in part, by a glut created by increased Bakken production. Current transportation costs elevate gasoline prices elsewhere in the country and lower profits coming back to the Bakken. The lack of a pipeline does not pinch off Bakken oil (or oil from the tar sands, for that matter): the producers ship what they can in one of the region’s eight existing pipelines, and the rest ships on trains or trucks. But pipelines are cheaper (and safer, and have a smaller carbon footprint), and a new pipeline could mean, say, twenty-five dollars a barrel on 100,000 barrels a day in the Bakken. Ultimately, the Keystone extension will be built.

Just before the Civil War, with development of the first “rock oil” drills in Pennsylvania, marketers began touting the virtues of kerosene. As one handbook had it:

Those that have not seen it burn, may rest assured its light is no moonshine; but something nearer the clear, strong, brilliant light of day, to which darkness is not party. . . . [R]ock oil emits a dainty light; the brightest and yet the cheapest in the world; a light fit for Kings and Royalists and not unsuitable for Republicans and Democrats.

This is not ad copy; it is political science. There have been no advances in the field since.

And so we come to the point where the congregation rises and the preacher intones the usual analogy of oil to addiction, but the truth is that oil is no more an addiction than food is. Food and energy are necessities in all species, and oil is how we handle energy in this life as we know it.

Theodore Roosevelt was a legendary documenter of himself. He detailed every hunting trip he took and sold multiple articles on each, some cut-and-paste jobs of earlier pieces. He hustled freelance assignments, books, and speeches on every set of deer antlers, on every buffalo mount and elk hide, on every lark and thrush he saw. Sometimes he wrote well and philosophically, especially about the odd notion of his that wilderness itself was of value, an irreplaceable force in shaping American character. It is a quaint notion, today as forgotten and antique as his condemnations of John D. Rockefeller.

He did not, however, write about what he learned and felt in this place that allowed him to deal with the death of his mother and young wife. Too bad, because we’re down to grief now, and what he learned about it here is what we need to know.

I’ve had enough of these winter two-lanes, and so find my way to the unpaved scoria of Magpie Road, headed due west from the roar of the highway into the relative quiet of the Badlands. I have a spot in mind just northeast of what was Roosevelt’s Elkhorn Ranch. There’s a trailhead where I can leave my Jeep. A fine running path wraps around buttes and coulees, leading on for miles, eventually on to Elkhorn Ranch itself. Somewhere Roosevelt’s tracks are no doubt set in midlayers of this very trail, just above the deeper layer of moccasin tracks, so I run, because I am a runner, trying now to build the chuff of my breathing loud enough to overmatch the whir and creak of pump jacks every few miles.

It’s late February and still plenty cold, despite the sun. I have a decent pair of cleated running shoes made in China and delivered to me by diesel fuel. I have fleece and polyester miracle fabrics that disguise their common origin in petroleum, so I am warm. My Jeep Liberty burned through six and a half tanks of gas in reporting this story. Roosevelt’s ranch is within my range, but I stop short.

Single Page
’s ninth book, It Runs in the Family, will be published this year by St. Martin’s Press. His last article for Harper’s Magazine, “The Oil We Eat,” appeared in the February 2004 issue.

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  • Xeno Phundibulum

    This article should remind readers that shale oil and oil shale are not the same thing. The confusion is widespread and has led to the term tight oil (http://en.wikipedia.org/wiki/Tight_oil) to describe light crude oil entrapped by low porosity shale, which is the situation for Bakken, Barnett, and Eagle Ford.

    Shale permeated with kerogen is most often known as oil shale. It is usually extracted by mining the rocks and then extracting the low grade oil. With an energy density less than camel dung, the price of oil must be relatively high for this to be worth doing.

    It’s a whole new ball game. North Dakota government data shows that the average Bakken well produces 141 barrels per day and sees a rapid drop in flow after one year (40% by one analysis); that is why so many wells are being drilled. By contrast, the average well in Saudi Arabia produces 6000 barrels per day and the total number of active wells there is about the number of wells being drilled in ND every year.

  • Victorian

    What a thoroughly depressing article. What’s really missing is discussion of climate change. It basically goes unmentioned in this article, but it’s a huge part of the story.


October 2015

Lives by Omission

Lifting as We Climb

Cattle Calls

Getting Jobbed

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