GILLETTE, Wyo. — Almost 50 years ago, a group of volunteers started a day care program in a church basement to help turn this city from a raw boomtown into a place where workers could settle with their families. Over time, local officials harnessed the tax money that came with the boom in coal, oil and natural gas production and put it to work. The town was once such a rough place that it lent its name to "Gillette syndrome," which refers to the community disarray that comes with an oil boom. Today it boasts a robust school system; a state-of-the-art recreational center; a shelter for families in crisis; and a wide range of services for residents experiencing drug abuse, domestic violence and homelessness. But all of that is being threatened by the extended downturn in the oil, gas and coal industries.
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In early 2015, as world oil prices tumbled below $50 per barrel, Alaska had two aces up its sleeve that seemed to offer hope for the state's petroleum-dependent economy.
First, despite lingering low oil prices, Royal Dutch Shell PLC was steadfastly determined to drill for oil off Alaska's northern shores. In 2008, the Anglo-Dutch company had purchased 275 Chukchi Sea leases for $2.1 billion and was confident it would find a mother lode of oil in the American Arctic. CONTINUE READING >>>
HOMER, Alaska — Alaska is far different from other U.S. states that saw rapid growth during the shale oil boom. In those regions, low oil prices are triggering an abrupt collapse of local economies and housing markets, observed Gunnar Knapp, former head of the University of Alaska, Anchorage's Institute of Social and Economic Research. "We're not like North Dakota, where entire towns are drying up," Knapp said. But the oil price crash does appear to be fundamentally changing the makeup of the Alaska economy, shifting jobs from the oil and gas industry to health care and tourism. And the new jobs aren't bringing new revenues to the state coffers. CONTINUE READING >>>
WATFORD CITY, N.D. — Three years ago, the local government in this small town faced a big challenge. At the epicenter of the Bakken Shale oil boom, people were pouring into Watford City and its 30-year-old high school badly needed replacing. The school district came up with $54 million in loans and grants to build the classrooms, and the city government borrowed $94 million to build a complex including a football stadium and an indoor event center. The various loans are backed by property taxes, sales taxes, and the local share of state oil and gas taxes. If the oil industry recovers from its current three-year oil bust, Watford City will have plenty of tax money to pay off the loans, and the industry will carry most of the financial burden. CONTINUE READING >>>
BISMARCK, N.D. — When lawmakers filed into the Capitol here in August, they were repeating a familiar scene. North Dakota was in the throes of an oil bust after a six-year drilling boom that transformed parts of the state. The price of oil had been in free fall, state revenue was down almost one-fourth and the state's primary savings account was almost empty. Now the lawmakers had assembled for a three-day special session to decide the winners and losers. It could have happened in any state capitol in the oil patch, in any of the downturns that have plagued the oil business since its inception. But this oil bust could be different. CONTINUE READING >>>