How Long Will They Stay? the Bakken Oil Boom and Migrants' Expected
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How long will they stay? The Bakken oil boom and migrants’ expected duration of residence in affected areas Jack DeWaard1 1 Department of Sociology, Minnesota Population Center, University of Minnesota. 909 Social Sciences, 267 19th Ave. South, Minneapolis, MN, 55455, USA. E: [email protected], P: (612) 624-9522, F: (612) 624-7020. ABSTRACT In places that have experienced relatively recent and unprecedented migration, a common concern is whether and for how long migrants will remain in the affected areas(s). These cases, however, also present challenges to estimating migrants’ duration of residence. In this paper, with the idea that the present is a reasonable starting point for understanding the future, I use county-to-county migration data and multiregional life tables to develop period estimates of migrants’ expected duration of residence in western North Dakota and eastern Montana during the recent Bakken oil boom in the late 2000s. To assess change over time, I compare these to similar estimates for the late 1990s. While my concern is with migrants’ expected duration of residence in the Bakken, the insights and methods can be applied to any case that has experienced similar changes that make it difficult to determine how long migrants will reside in the affected area(s). KEYWORDS Bakken; Oil; Migration; Duration of Residence; Multiregional; Multistate INTRODUCTION Although the situation has begun to change in light of the falling price of oil in the past year or so (Grunewald and Batbold 2015; Healy 2016; Shaffer 2016), the recent oil “boom” in western North Dakota and eastern Montana—hereafter, the Bakken—that began in the mid- to late-2000s was accompanied by unprecedented migration to the region (Brown 2013). This change prompted concerns on the part of state and local planners and policy makers (Bohnenkamp et al. 2011). On one hand, there emerged a need for new and/or affordable housing, infrastructure, and services in Bakken communities like Williston, ND, and Sidney, MT (Bangsund and Hodur 2013). On the other hand, despite the estimated seven billion barrels of recoverable oil that will take several decades to extract given current production levels (Demas 2013), there were reservations about making such sizeable investments given no guarantees that migrants would set down long-term roots in the region. Planners and policy makers therefore had and continue to have a strong interest in migrants’ “length of time of residence” in the Bakken (De Laporte 2015:22; Wernette 2015). Cases like the Bakken that are characterized by very recent and unprecedented migration make it difficult to estimate migrants’ duration of residence. Given the recency of migration, retrospective estimates are of little use. Likewise, prospective estimates require intimate knowledge of, and likely a host of assumptions about, the drivers of migration and of retention, including whether and how these will change over time. Accordingly, in this paper, I take a different and quintessentially demographic approach. Guided by the idea that the present is a reasonable starting point for understanding the future, I use county-to-county migration flow data from the 2006-2010 American Community Survey and multiregional life tables to develop period estimates of migrants’ expected duration of residence in the Bakken and in each Bakken county. A type of conditional life expectancy, these estimates summarize the average number of years that migrants could be expected to live in the Bakken and in each Bakken county during their lives based on prevailing age patterns of county-to-county migration and mortality observed in the late 2000s. To assess change over time, I compare these estimates to similar estimates for the late 1990s, constructed using county- to-county migration flow data from the 2000 decennial census. While the focus of this paper is with migrants’ expected duration of residence in the Bakken, the insights and methods can be applied to others cases that have experienced similar changes that make it difficult to determine how long migrants will reside in the affected area(s). BACKGROUND Migration to the Bakken Due to the rising price of oil in the early 2000s and controversial extraction techniques, the United States is currently the top oil producing country in the world, producing upwards of 10 million barrels of oil per day (U.S Energy Information Administration 2015). While Texas and the Federal Offshore Gulf of Mexico account for the majority of oil production in the United States, since 2005, North Dakota has accounted for largest growth in oil production, going from about 90,000 barrels per day to about 1.2 million barrels per day by the end of 2015, an increase of nearly 1,200%. Presently, North Dakota ranks second behind Texas as the top oil producing state in the country (Brown 2013; Moore 2011; Shaffer 2014). As I show in Figure 1, North Dakota’s black gold rush is a highly localized phenomenon that actually extends beyond the state’s borders. The so-called Bakken oil patch is located in the Williston Basin in a 12-county area in western North Dakota and eastern Montana,1 as well as in the southern parts of the Canadian provinces of Saskatchewan and Manitoba. The Bakken oil patch is estimated to hold upwards of 7 billion barrels of recoverable oil given current extraction technologies (Demas 2013), most especially horizontal drilling and hydraulic fracturing, also known as hydrofracking or, simply, fracking. Fracking is a highly controversial practice that involves drilling, first vertically and then horizontally, into rock formations—in the case of the Bakken oil patch, into shale formations—and injecting a pressurized liquid solution that fractures (i.e., creates fissures in) the rock, releasing both oil and natural gas. Fracking requires large amounts of water, which is contaminated in the process and must be safely disposed of. It also results in a number of other potential externalities, including groundwater contamination, earthquakes, and, in the absence of the ability to capture the release of natural gas, flaring and associated threats to air quality. Presently, flaring is so prevalent in the Bakken that, despite being one of the least populated areas in the United States, the region can clearly be distinguished in nighttime satellite imagery. ---FIGURE 1 ABOUT HERE--- As I show in Figure 2, Panel A, despite the falling price of oil in the past year or so (Grunewald and Batbold 2015; Healy 2016; Shaffer 2016), oil production in the Bakken has increased steadily since the mid-2000s (Grunewald 2016; Dalrymple 2016b). This is due, in part, to greater efficiencies in oil well design and drilling. These production gains have, in turn, fueled increases in wages and employment in the Bakken (Vachon 2015). As I show in Panel B in Figure 2, the average weekly wage in the Bakken increased from $584 in the first quarter of 2004 to $1,400 in the first quarter of 2015, an increase of nearly 140%. In contrast, corresponding increases for the rest of North Dakota and Montana were 30% and 16%, respectively. Likewise, as I show in Panel C in Figure 2, with the exception of increasing at the tail end of the Great Recession, the unemployment rate in the Bakken fell by 55% between the first quarters of 2004 and 2015. Corresponding decreases for the Rest of North Dakota and Montana were 16% and 1%, respectively. ---FIGURE 2 ABOUT HERE--- Prevailing economic theory posits a strong positive association between, on the one hand, wages and employment and, on the other hand, migration (Bodvarsson and Van den Berg 2013). At the individual level, persons are theorized to compare the utility of remaining in their current place of residence—with expected earnings and the likelihood of employment over some time horizon figuring centrally into this function—to the utility of migrating, with this difference discounted by the economic and psychic costs that would be incurred by migrating (Sjaastad 1962; Todaro 1976). If this balance favors the destination, persons choose to migrate. At the macro level, this translates into larger migration flows in the presence of more pronounced wage and employment gaps favoring receiving (versus sending) areas (Greenwood 1997). As is evident in Panel D in Figure 2, estimates of net-migration in the Bakken are consistent with this intuition. Between 2003 and 2004, net-migration in the Bakken was negative, and stood at -2.2 persons per thousand. Net-migration turned positive between 2006 and 2007, and, after falling slightly during the Great Recession, increased dramatically to +64.1 persons per thousand between 2011 and 2012. Net-migration has since fallen to +53.9 persons per thousand, with corresponding estimates for the rest of North Dakota and Montana at +5.7 and +4.9 persons per thousand, respectively. How Long Will They Stay? Speaking at the recent Bakken Researchers Convening, held in Dickinson, ND, in the summer of 2015, the now former Mayor of Dickinson, Dennis Johnson, remarked that “there’s a large transitory labor force, [and] you have increased criminal activity and increased social issues” in places throughout the Bakken region (Wernette 2015; see also De Laporte 2015). This statement is telling for several reasons. First, consistent with previous theoretical, empirical, and policy research, it clearly connects migrants’ duration of residence to a range of issues under the banners of, for example, social and community cohesion, integration and assimilation, and quality of life (Huddleston et al. 2011; Sampson and Groves 1989). As Alexander (2005:653) noted some time ago in his study of return migration to the U.S. South after the Great Migration out of the region in the early twentieth century, “[a] highly transient migrant stream can inhibit the development of migrant community…[and] draw at least some sort of antipathy from both long-term settlers and other local residents alike.” Pronounced population mobility, or churning, is thought to disrupt existing relations and arrangements that govern, for example, shared expectations, trust, and reciprocity (Kornhauser 1978).