Spiraling Path Dependencies in Rural Energy Communities: A Case Study of the Western Area Water Supply Project in North Dakota

Authors: Kristin Smith*, Montana State University, Julia H. Haggerty, Montana State University
Topics: Energy, Rural Geography, Economic Geography
Keywords: community resilience, Bakken, fiscal policy
Session Type: Paper
Day: 4/13/2018
Start / End Time: 5:20 PM / 7:00 PM
Room: Grand Ballroom B, Astor, 2nd Floor
Presentation File: No File Uploaded

This research uses a large-scale regional water infrastructure project, the Western Area Water Supply Project (WAWSP), to understand the fiscal opportunities and constraints presented by the Bakken oil boom in North Dakota. From 2000 to 2015, an estimated 15,865 oil wells were constructed in North Dakota as part of the unconventional “shale revolution” in the United States (Preston and Kim 2016). Prior to the boom, this isolated, rural region had experienced decades of population decline and the effects of economic restructuration. Water was scarce and often of poor quality, but the demands on the region's water infrastructure were predictable. The boom, however, prompted unprecedented residential and industrial demands on the region’s water infrastructure. The WAWSP was proposed as a solution. While the region generated ~$1.8 million per day in state tax revenues when oil prices were high (Haggerty 2010), fiscal and political barriers for building water infrastructure led community leaders to create an alternative funding structure for the WAWSP that relied on selling water to private oil companies. When oil prices fell, the project struggled to fully fund its costs. Using a community resilience framework and the WAWSP as an example of a long-term economic development strategy, this research explores the opportunities and constraints that shape rural energy communities’ investment strategies in North Dakota. Specifically, it illustrates how state and federal fiscal policy has failed to fully address energy impacts and how that failure has led to regional solutions with their own benefits and risks.

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