The Nort Dakota and Montana Oil Boom

The Minneapolis Fed has released avery good publication on the so-called Bakken oil boom. The Bakken refers to 12 counties in Montana and North Dakota most affected by oilfield activity and closely related economic expansion.

Here are some of the conclusions:

• The Bakken oil boom dwarfs previous oil production expansions in Montana and North Dakota; drilling is expected to continue at strong levels for at least the next 10 to 20 years.
• Over the next 10 to 20 years, the North Dakota Department of Mineral Resources expects over 20,000 new wells to be drilled in the North Dakota Bakken area.

• The unemployment rate in the Bakken is about 2 percent; the rate in the rest of Montana and North Dakota is just under 7 percent and 4 percent, respectively.
• Average weekly wages are up around 25 percent in the Bakken since 2009; wage growth is up 1.9% from 3Q2009 to 3Q2011 in the rest of MT and 4.9% in the rest of ND.

• Bank performance within the Bakken has remained stable and generally similar to bank performance in the rest of Montana and North Dakota, although profitability for Bakken banks has picked up recently relative to non-Bakken banks. The incidence of serious mortgage problems has fallen relatively fast in the Bakken since 2010.