When we become Big Oil

For many of us growing up in Small Town, North Dakota, the opportunities for staying in your hometown after high school or college were once fairly limited, but oil and gas development has changed that.
By Tessa Sandstrom | April 09, 2015

For many of us growing up in Small Town, North Dakota, the opportunities for staying in your hometown after high school or college were once fairly limited. For the majority of women, apart from working in retail (if your small town were lucky enough to have retail stores), you might have been able to become a teacher. Or, you could marry a farmer. For men, you could also try to find a teaching job or you could farm or work for the local construction firm. The opportunities for something more specialized like engineering, marketing, finance or public relations were slim, even in our larger cities. Today that’s not the case, and anyone who has read this column has heard me preach it time and time again.

Yet, I always find myself coming back to this point because it seems like this is something that is so often lost in the rhetoric of politics and activism that surrounds oil. Upon the release of a study outlining the contributions of oil and gas development in our state and communities, many of these thoughts and ideas resurfaced.

In case you missed it—and you may have because it wasn’t heavily covered in newspapers—researchers at North Dakota State University found that the oil and gas industry contributed $43 billion to the state’s economy in 2013. About $25.3 billion of this was in secondary impacts, or the respending of the $17.7 billion spent directly by the industry. The largest benefactor of these dollars was retail trade, or the businesses that sell the products and services needed by the industry and employees. They pulled in a whopping $11.3 billion of that total. Households (or individuals), were the second largest, bringing in $9.3 billion in salaries, wages, royalties and other income. Government revenues were slightly behind the finance, insurance and real estate industry at $4.4 billion. Seven other industries also pulled in almost a billion or more each.

Most will agree that these are significant sums, but even I find myself numbed to those figures because these are sums that are just incomprehensible to me. What does this mean to me? What does it mean to you?

The short answer is “a lot.”

For starters, that $9.3 billion that went to households includes $6.3 billion paid out in salaries and wages alone. That represents 35.9 percent of all private sector salaries and wages paid in the entire state. This should come as no surprise if you consider that the 81,000 jobs supported by oil and gas in 2013 represents about 20 percent of the entire North Dakota workforce. Those salaries spent by those 81,000 people are being spent in our businesses, our restaurants and our towns, sending ripple effects through the entire state’s economy. Again, a lot of numbers, but what’s important is not necessarily the numbers, but the human factor that is behind each one of them.

“Six degrees of separation” is a theory that most of us are likely familiar with and it states that every person is only six people or steps away by introduction to another person. In North Dakota, we’re more accustomed to about two or three degrees of separation. Chances are high that any stranger you meet knows someone you know.

I would predict the same goes for the oil industry. Even if you don’t have an immediate family member or friend employed in or by the oil industry, chances are your friend or family member does.

In my hometown, many of my friends not only work in the oil industry, but they own their own businesses and employ dozens of other individuals. For this very reason, when I hear accusations or derogatory comments lodged at Big Oil, I can’t help but be slightly offended.

For me, the oil industry doesn’t represent some faceless out-of-state corporation; it represents Devin, Loren, Jake and James—all individuals who started their own businesses to support activities in the oilfield and created dozens of jobs at the same time. Since they are not large corporations, but rather small business owners, I would guess they are not considered Big Oil. If not, at what point do they become Big Oil? After all, the companies considered Big Oil started out as small businesses and it was through success and hard work that they became the larger corporations that they are today. I can only wish the small business owners in North Dakota the same success.

The oil industry to me also represents Garrett, Josh, Drew and Kyle who work for major operators. Their job is to help ensure development is done as responsibly as possible and that  their neighbors’ homes, farms and water resources are protected.  Are they just Big Oil or are they exempt because they were born and raised in western North Dakota?

You see, with an economic impact of $43 billion, Big Oil is made up of each and every one of the individuals who have found an opportunity to make a living or start their own businesses. It’s made up of individuals who care about their hometowns and want to do the best job possible while providing a valuable resource to our state and nation. Big Oil is not some faceless entity located elsewhere. No, Big Oil is you and me.

Author: Tessa Sandstrom
Communications Manager,
North Dakota Petroleum Council