1. THE ENVIRONMENT AND THE ECONOMY: HYDRAULIC FRACTURING AS THE INTERSECTION OF SUSTAINABILITY North Dakota Oil: The Bakken and Three Forks Formations © 2011 Joshua P. Fershee

2. THE NORTH DAKOTA DIFFERENCE © 2011 Joshua P. Fershee Source: North Dakota Dep’t of Mineral Resources

3. THE NORTH DAKOTA DIFFERENCE  The Bakken Shale is different than the Marcellus and many other regions  Current extraction is about 90% oil and 10% gas, with almost two-thirds of the oil being extracted via hydraulic fracturing.  North Dakota is on pace to pass California this year, to become the #3 oil producer in the United States  Unlike the Marcellus and other gas shale plays, price doesn’t seem to be a concern. © 2011 Joshua P. Fershee

4. THE BAKKEN PLAY © 2011 Joshua P. Fershee

5. NORTH DAKOTA: BAKKEN & THREE FORKS AREA Source: North Dakota Dep’t of Mineral Resources © 2011 Joshua P. Fershee

6. Source: North Dakota Dep’t of Mineral Resources © 2011 Joshua P. Fershee

7. NORTH DAKOTA FRACKING OPERATION Source: North Dakota Dep’t of Mineral Resources © 2011 Joshua P. Fershee

8. NORTH DAKOTA WELL SITES Source: North Dakota Dep’t of Mineral Resources © 2011 Joshua P. Fershee

9. NORTH DAKOTA DRILLING– OCT 2009 Source: North Dakota Dep’t of Mineral Resources © 2011 Joshua P. Fershee

10. NORTH DAKOTA DRILLING– OCT 2010 Source: North Dakota Dep’t of Mineral Resources © 2011 Joshua P. Fershee

11. NORTH DAKOTA DRILLING– OCT 2011 Source: North Dakota Dep’t of Mineral Resources © 2011 Joshua P. Fershee

12. THAT’S TACO JOHNS! Source: Blake Ellis/CNNMoney © 2011 Joshua P. Fershee

13. THE GOOD, THE BAD, & THE UGLY  CNNMoney: AMERICA'S BIGGEST BOOMTOWN  Earn $2,000 a night as a boomtown stripper (in Williston, ND)  Housing Costs Skyrocket/Camps  Traffic & Safety Concerns  High Poverty and Prosperity Rates © 2011 Joshua P. Fershee

14. JOBS & INCOME POVERTY & HOMELESS  Jobs:  170-225 new rigs = 20,000 jobs in drilling  Anticipated 28,000 new wells & 28,000 long-term jobs over 15-25 years  Income  McKenzie County: In the top five ave. annual wages at $51,493 in 2010  Poverty  McKenzie County's poverty rate is 12.8%, when state average =11.7%  Homelessness  6-figure salaries, no where to live: “My address is Wal-Mart”  “Lucky” to live in a man camp © 2011 Joshua P. Fershee

16. SEEING A TREND? Source: http://www.mongabay.com/images/commodities/charts/crude_oil.html © 2011 Joshua P. Fershee

17. NORTH DAKOTA SPEAKS: ND HOUSE BILL NO. 1216 SECTION 1.  Hydraulic fracturing - Designated as acceptable recovery process. Notwithstanding any other provision of law, the legislative assembly designates hydraulic fracturing, a mechanical method of increasing the permeability of rock to increase the amount of oil and gas produced from the rock, an acceptable recovery process in this state.  SECTION 2. EMERGENCY. This Act is declared to be an emergency measure. © 2011 Joshua P. Fershee

18. NORTH DAKOTA SPEAKS: ND HOUSE BILL NO. 1216  Loosely translated: “We really, really like fracking. Please leave us alone!” © 2011 Joshua P. Fershee

19. WHEN, NOT IF, LOCALS FIGHT BACK  Crime  Williston Police Department: the number of accidents it investigated jumped 30% last year to 974, and traffic misdemeanors increased 30% from 324 in 2009 to 421 in 2010.  Housing:  One-bedroom apartments can run around $1,500 a month, while two- to three-bedroom apartments are often around $3,000.  Zoning, Zoning, Zoning  Infrastructure problems  Traffic Problems © 2011 Joshua P. Fershee

20. NEED FOR OVERSIGHT  "It's a fire drill every day.”: Lynn Helms, Director, North Dakota Department of Mineral Resources  In February 2011: Agency's staffing designed to handle 100 rigs and about 5,000 wells  But, 169 rigs were running and 5,300+ wells were pumping oil.  2,000 more new wells are expected by the end of 2011. © 2011 Joshua P. Fershee

21. SHORT-TERM FOCUS COULD BE LONG-TERM PROBLEM  Dep’t of Mineral Resources monitored a record 1,213 new wells last year  Visited each site at least six times during the three-week construction phase  The inspectors ensure, among other things, that the steel pipe driven into the ground and cemented into place is done correctly to prevent groundwater contamination.  The oversight of well construction is adequate but other monitoring is lacking.  Nearly 900 disposal wells that hold saltwater, a byproduct of oil production, and about 5,200 sites that hold other oil waste are being monitored only twice annually at best, agency records show.  Disposal wells should be visited at least six to 12 times a year © 2011 Joshua P. Fershee

22. PROPOSED SAFETY REGULATIONS  43-02-03-28. SAFETY REGULATION, ADDS: The director may require remote operated or automatic shut-down equipment to be installed on, or shut in for no more than forty days, any well that is likely to cause a serious threat of pollution or injury to the public health or safety.  ADDS: No well shall be drilled nor production or injection equipment installed less than five hundred feet [152.40 meters] from an occupied dwelling unless agreed to in writing by the surface owner or authorized by order of the commission.  Not Exactly Norway, but it’s a start © 2011 Joshua P. Fershee

23. COMPARE: § 33: EMERGENCY SHUTDOWN SYSTEM Petroleum Safety Authority (Norway): Guidelines Regarding the Facilities Regulations  Facilities shall have an emergency shutdown system that can prevent the development of hazard and accident situations and limit the consequences of accidents....  It shall be possible to manually activate functions from the central control room that bring the facility to a safe condition in the event of a fault in the parts of the system that can be programmed. Coincidence? Norway’s Statoil just bought Bingham, a Texas company, with 375,000 net acres in the Williston Basin 23 © 2011 Joshua P. Fershee

24. AVOIDING THE BIG RISK, SEEKING THE BIG REWARD  Economic Sustainability requires Environmental Sustainability  Fracking problems will be dealt with differently than traditional oil pipeline spills  Long-Term price support in oil makes it different from gas fracking plays  Collateral Damage: Human, Environmental, Political © 2011 Joshua P. Fershee

25. MULTI-FACETED ISSUES NEED MULTI-FACETED APPROACHES  Economic  Environmental  Social © 2011 Joshua P. Fershee