– Executive Summary –
After a rise in the global market price of oil and decades-long U.S. reliance on imported oil to meet demands, advancements occurred in the extraction of shale oil. The combination of improvements in hydraulic fracturing, also known as fracking, and the ability to bore wells horizontally created a boom in the energy sector, the epicenter of which was the Bakken shale oil formation in western North Dakota.
Different from conventional oil production, the extraction of oil from shale is known as unconventional oil production, which pumps out a pocket of trapped oil. As with any advancement, its unintended consequences continue to be the subject of research. Since fracking is a relatively new process, speculation and controversy surround it, which inhibits decision makers who must make difficult policy decisions that can have lasting impacts. The primary question asked in this thesis is: What are the effects of unconventional shale oil exploration on local communities?
To answer the research question, this thesis took the form of an analysis of a qualitative case study of the Bakken, the largest shale oil formation in the United States. It includes an identification of causation effects on the local environment, as well as an analysis of the socioeconomic impacts at the local level and their correlation with the boom-and-bust cycle. The case study included the identified environmental concerns of water consumption, groundwater and surface water contamination, handling of produced water, spills, air quality, and seismic activity. The identified socioeconomic concerns comprised the effects of population in-migration, housing demands, economic changes, tax revenues, infrastructure needs, and crime. Based on the data, a qualitative analysis revealed patterns matching previous research, the how and why of events, and trends in the chronology of events.
Oil prices spiking to new highs typically cause a boom: a rapid influx of people looking for high-paying jobs, an abrupt rise in the housing market, income disparity, the displacement of long-time residents, atypical variance in community demographics, an increase in crime, the rapid expansion of infrastructure, an influx of tax revenue, and the deviation of long-term investments from their expected growth pattern. As oil prices drop, the bust ensues: The local economy retracts, causing an increase in local debt. At the time of this writing, the extent of local impacts to the Bakken were emergent.
This research revealed local impacts from unconventional oil production, albeit to varying degrees. Fracking has contributed to the consumption of trillions of gallons of fresh water. Spills have contaminated the soil and surface water with a potential for contaminating groundwater. The release of natural gas has globally polluted air quality. The rapid influx of workers to the area has caused housing prices and crime to rise while many original residents have become either physically or emotionally displaced from their own community. Regardless, fracking has facilitated the creation of new infrastructure in the area.
Six policy and governance recommendations have emerged for decision makers for the prevention of, preparation for, and mitigate of known risks from the findings of this and previous research on fracking. As many long-term impacts remain unknown, the subject of fracking will continue to evolve, resulting in increased clarity. The lessons gained from the case study on the Bakken can frame the discussion and improve decisions for the next community leaders who face the unintended consequences of fracking.