Areas that have emerging shale gas plays can learn from the experience in North Dakota, where rapid development of the Bakken Shale oil fields has led to some social disruption.
The conditions were outlined by Joshua Fershee, associate professor and associate dean at the University of North Dakota School of Law. He spoke on a panel about the experience from other shale regions at "Drilling Down on Regulatory Challenges," a symposium hosted Oct. 27-28 by the West Virginia University College of Law's Center for Energy and Sustainable Development.
North Dakota was the ninth-largest oil-producing state five years ago but is about to overtake California for third place and sees Alaska in its sights, Freshee said.
Where there were about 50 drilling rigs in operation in 2009, there are now closer to 200, concentrated in the western part of the state.
The new oil opportunity — resulting from the same technologies that have made natural gas from shale available — has added four billion barrels of oil to the U.S. resource and, with the persistently high price of oil, Freshee said, the activity is here to stay.
Some of the problems western North Dakota is experiencing, such as traffic and road safety, are familiar already in West Virginia.
But others are related more closely to social stability and, where they're happening here, are at a relatively small scale or not yet discussed much.
The good: If a North Dakota resident isn't working, it's because they don't want to, Freshee said. Unemployment in the western part of the state is about 1.5 percent.
He showed a photo of a fast food restaurant "help wanted" sign offering $15/hour.
But then there's the bad: Communities can't keep police officers, for example, because the officers can work as truckers for $120,000 a year.
With a population of only 600,000, the state has also needed out-of-state workers to meet oil producers' needs.
Rents, Freshee said, are tripling, and there's a significant problem of homelessness: workers making six figures living in camps or in the Walmart parking lot.
With all that money comes growth of surrounding economic activity, both wanted and unwanted. A recent news story said exotic dancers in Williston, N.D., can make $2,000 a night.
"Western North Dakota was not prepared for this," he said.
Some of these conditions have emerged in the fast-growing Marcellus-producing area around Wetzel County area, with some reports of increased drug use and prostitution.
North Dakota and the local area experiencing the boom appreciate and have been supportive of the activity, Freshee said, even to the extent that state lawmakers passed a bill designating hydraulic fracturing as an "acceptable recovery process" — partially in the hope, he said, that it might influence the U.S. Environmental Protection Agency to go easy on any federal regulations it might propose.
Energy regulation needs to consider economic, environmental and social aspects together, Freshee said, to make development as economic as possible without harming either the environment or society.