Tuesday, March 17, 2015

Bakken Oil: The Anarchy of the Market

By Richard Mellor
Afscme Local 444, retired

The anarchy of capitalist production is nowhere more obvious than in North Dakota where an oil boom created what the free market gurus call a “land of opportunity” making the small town of Williston North Dakota the fastest growing town in the US for two years (2011 to 2013). The oil boom also made little Williston one of the most expensive towns in America with the average rent hovering around $2,394 a month, 27% higher than San Jose CA, the second most expensive city according to the Wall Street Journal.

Capitalist production is an unplanned for-profit venture and while there have no doubt been huge profits for the oil and oil drilling industry investors, the consequences have been dire.  Workers from the many depressed areas in the United States flocked to Williston to find work. For a short while things were good although the conditions under which workers toiled have been notoriously bad as hundreds of contractors and other get rich quick types flocked to the area.  By 2012 there were more than 200 drilling rigs operating in the Bakken fields.

People slept in cars, rooms, shelters, wherever they could find a place to lay their head as accommodation needs rose overnight without adequate construction of new homes and apartments; Williston became a truck stop basically. Prostitution followed the workers and that industry flourished for a while. But the recent collapse in in crude oil prices has ended the high and the come down is brutal.  Oil companies have cut what they pay contractors by as much as 20% and the contractors have tightened their belts cutting workers forcing those left to pick up the slack. In typical capitalist fashion, some oil executives are saying that the falling oil prices might make the oilfields safer by “weeding out less experience operators”

But if the production of society’s energy was a public venture, under the control and management of workers in the industry, consumers and residents of communities where work may be done, the concept of inexperienced operators in such a dangerous field would not be an issue. And most likely, there would be no oil boom in North Dakota as production of such an important need would most likely be transformed.

A market driven boom, the insane scramble for profits and the cost cutting has not been good to workers. Eight workers have died since October 2014, “..more than in the preceding 12 months combined.”, another WSJ report states, adding that in at the peak of the Bakken boom, North Dakota’s rate of workplace deaths rose to 17.7 per 100,000 which is five times the national average.

Workers have been working 12-hour shifts for as many as 20 days in a row and many contractors competing for work or numerous contractors on one job not able to coordinate operations properly surely contributes to the increased accident and death rates. An oil industry executive tells the WSJ, “It’s simple math. There’s absolutely potential that some of what we’re seeing is driven by the price of oil.” But this is accepted as normal, as the apex of human civilization where market forces or the struggle for profits by a small section of society determines that such conditions exist.

OSHA, the toothless government agency that police’s worksites is incapable of having much of an impac------- the agency is normally in the spotlight after the fact.  Nationally, there are about 2200 OSHA inspectors for 8 million workplaces and as of this writing OSHA has eight inspectors in North Dakota and 150,000 square miles of territory to cover. It is not an accident that this is the same number of inspectors as before the boom despite the massive increase in activity.  This is a conscious decision, a conscious allocation of society’s resources both monetary and human.  As I have pointed out many times, these accidents as well as the numerous catastrophic industrial disasters like the explosion in West Texas that“…destroyed a nursing home, an apartment complex, and a nearby middle school, according to the New York Times, the blast left a crater 93 feet wide and 10 feet deep, and the fire 'burned with such intensity that railroad tracks were fused.'" ( are market failures, a product of the system of production we call capitalism.

The Salvation Army and other groups have opened shelters in Williston for those whose hopes have been dashed.  One Salvation Army spokesperson says that her organization spends about $1,500 a month buying one-way bus tickets to help people leave.

This is how the market, and the private ownership of the dominant sectors of the economy works.  I am not in Williston and have not studied the effects of the developments in North Dakota in the aftermath of the oil boom, but one can bet that the local environment has suffered extreme damage. I am sure also that the lives of local people have been damaged equally. We will learn much of this as academics and experts do their studies after it is all too late.

There is no structure, no planning, no organization when it comes to booms of this nature. The goal is profits and at any costs.  The private investors and other billionaires who invest in such ventures can do so freely as the government pretty much allows them a free hand.  An expert talking on the West Texas explosion pointed out, that the problem, or a major “shortcoming in the system of regulating chemical plants…” ,  is “…the reliance on self reporting.”  The same with the BP catastrophe, the government regulators allowed the deep-water energy companies to write their own regulations.

We are inundated with all sorts of propaganda telling us that this is how things are, that there’s no other way.  But there is, this way of running society hasn’t always existed and hopefully will not be around much longer.  But time is getting short. The environmental consequences of such activity alone are dire. Imagine running your family and household like this. It would be a dysfunctional unit indeed.

That’s what capitalism is.

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