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Could Bakken Oil Boom Go Bust After Election?

Wednesday, 17 Oct 2012 | 10:39 AM ET
Oil derricks in North Dakota pump oil from the Bakken Formation.
Rosanne Olson | The Image Bank | Getty Images
Oil derricks in North Dakota pump oil from the Bakken Formation.

The unemployment rate in Williston, North Dakota hovers around .07 percent. Wal-Mart is offering $17 an hour, and even the United States Postal Service is hiring.

The ridiculous factoids of a boomtown never cease to amaze when looking through the lens of a slow-growth national economy.

Williston is the poster city for the oil boom in the region referred to as the Bakken , the name of the rock formation that could ultimately yield billions of barrels of oil.

Even two years after this region became a national news story, there is still a wild west feeling to this part of North Dakota. New construction is everywhere. People literally getting off the train with just the shirt on their back, looking for a job. There is a lot of money, and a lot of testosterone.

The only difference between now and 200 years ago is that people here now know what's going on in the rest of the country.

And although this presidential election is not a referendum on energy policy per se, there is an undercurrent of concern.

"I think people in this part of the state are very nervous, " Williston Mayor Ward Koeser told CNBC. "There isn't a lot of confidence in President Obama when it comes to understanding the oil industry.

"I'm not saying that Romney would be the perfect choice either, but I think there is more support for him simply because of his experience in business, energy development things like that."

(Read More: Could a Romney Win Hurt Investors in Green Energy? )

Ironically, the incredible prosperity in North Dakota — the state has at least a $1.5 billion SURPLUS — has happened during the Obama administration. However, the fear is that things might change in the next four years, especially when it comes to fracking, the controversial process that extracts oil and natural gas from certain rock and shale formations.

The Energy Factor: Fracking
CNBC's Brian Shactman reports on the oil boom which has resulted from fracking the Bakken shale in North Dakota.

If fracking were to be more tightly regulated, that's one thing. But a moratorium or ban is another story.

"Things would stop here as quick as a thief in the night, " said Tom Rolfstad, Williston's head of economic development. "It would just halt it."

Rolfstad is adamant about positive efforts to limit any environmental damage from fracking. (Read More: The Fracking of America .)

"I think we've made dramatic changes with a great deal of caution and care, " he said. "Our cleanup in accordance to laws in the last year or two — that required every well has everything cleaned up after the well has been drilled. It's said to cost $400, 000 per well to do that cleanup.

"In essence, that's a whole other industry that's been created. We're doing a whole lot to make sure that we do this right."

Right or wrong, fracking has quite a few high-profile opponents — from Matt Damon to most environmental groups. Politically, other states with huge potential in the energy sector are hesitating. For example, New York delayed lifting its moratorium and said it needs to study it further.

With $2 billion a MONTH spent on drilling alone, North Dakota is definitely pro-fracking. In Williston, where the average salary is $77, 000, there is no doubt about that. (Read More: Fracking: How It Works, Where It's Done .)

Because of that, and the uncertainty surrounding the election, even this historic boom is taking a bit of a breather. It's subtle. Maybe an apartment rents in five days instead of two. Maybe a job opening has 75 applicants instead of 100. Maybe a construction project delays until spring.

Maybe not.

On my five-hour drive from Bismarck to Williston, I learned from local radio that Williston set another all-time record for building permits.

Maybe opportunity trumps uncertainty.

—By CNBC's Brian Shactman
@bshactman

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