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Riches To Ruin?

The good news, say experts who spoke at a smart growth meeting in Baton Rouge yesterday, is that Louisiana is facing an economic boom due to new oil and gas production. That’s also the bad news. More: State Rep. Vicky Steiner, executive director of the North Dakota Association of Oil and Gas Producing Counties, said […]

The good news, say experts who spoke at a smart growth meeting in Baton Rouge yesterday, is that Louisiana is facing an economic boom due to new oil and gas production. That’s also the bad news. More:

State Rep. Vicky Steiner, executive director of the North Dakota Association of Oil and Gas Producing Counties, said the population of Dickinson, the town where she lives, has gone from 18,000 to 26,000. By 2020 the population is projected to reach 44,000.

Steiner said an extensive planning process is underway in western North Dakota to develop strategies and make infrastructure assessments. Before the boom, there was very little oversight of land use. McKenzie County, which is the biggest producer of oil, didn’t even have zoning.

“Our planning and zoning board had not met for years, and when they did, they had coffee and cookies,” she said. “The zoning people were not ready for a barrage of developers.”

A friend of mine from West Feliciana, my home parish, attended the event, and stayed behind to talk to the North Dakota representative. What he learned disturbed him greatly, given the intense oil and gas exploration in our parish, and in Wilkinson County, the Mississippi county just north of us. Here’s what my friend e-mailed this morning:

It is possible that we will have an experience similar to what occurred in North Dakota.  And if we do, it could well be more destructive to our community than any big hurricane, large residential development, Section 8 housing, new industry, or big box stores could ever affect us – probably more than all of them combined.

More insidious than clogging and destroying the roads, bringing in riff raff, litter, girlie shows, drugs, over-crowded day care and schools is what it will do to the fabric of our society and the relationships between friends, neighbors and family members.

Many good people will leave because housing prices will sky rocket.  So people whose homes might be worth $150-$200K now will be able to sell them for twice that.  Sounds good?  Well, what has happened is that a number of older people with children and grandchildren who live outside the area have sold their homes and left to be closer to their children.  These are often people whose families have been part of the community for generations.

Destruction of relationships.  I think the worst effect will be what it will do to neighbors, friends and family members.  To some degree, the people we enjoy being with and are closest to us are often those who are in our socio-economic class. We watch ball games on similar sized TVs.  We take vacations together at similarly affordable places – we identify with each other’s challenges, struggles and successes because we share them ourselves.

So a well hits – a good one – 1,500 barrels a day.  My numbers may be off, but say one person in in the unit has 50 acres of minerals.  That household is going to start collecting $25K or $50K or maybe more per MONTH.

Meanwhile, their neighbor, friend or sibling/cousin does not receive any additional mineral wealth. One household suddenly has more money coming in each month or two than they were making in a year or so. They have a huge amount of disposable income.  Rather than going to Orange Beach for a week, they can go to the French Riviera for a month.  Rather than searching long and hard to buy a good used tractor/frontend loader for $10K, they can buy the biggest and best new Kubota that [local tractor dealer] has on his lot.  Etc etc.  It will destroy relationships.  Particularly in families.

One other thing to keep in mind is that this is only short term phenomenon. In 3, 4, or 5 years, the party is over and its back to where you started.  How will someone who has had effectively unlimited disposable income return to their penny pinching days?  Their ability to enjoy life post super wealth will be much more challenging than before.  And, in the meantime, many will have undermined if not destroyed one of the most valuable aspects of life:  their loving relationships with neighbors, friends and family.

There is no way to stop the boom from coming if the money is there.  But perhaps there is some way to better prepare for it than the many miserable people in rural North Dakota were able to do.

Our parish desperately needs economic development. But we don’t need this. If the oil is there, and gettable, it’s going to be got. Is there any way for a community to prepare to ride this wave, and not be wiped out by it? Do you know how? Because I sure would like to know how.

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