Showing posts with label North Dakota. Show all posts
Showing posts with label North Dakota. Show all posts

Wednesday, September 11, 2019

The Enigma of Western Writers.

This post is on Western writers.



By which I mean writers from the West who write about the West.  By the "West", I mean the West of the Mississippi United States in general, and the various regions of the West as well. 

I don't mean writers like Annie Proulx, who move into an area, write something that they set in the area, and then are celebrated by reviewers outside of the area who are completely ignorant on the area in the first place.  Or even ones like Sam Western.

Nothing was western about the originator of Western writing, Owen Wister, who was an East Coaster through and through.

I'm not saying, well not saying completely, that a person has to be born in one area to write knowledgeably about it. There are certainly examples to the contrary.  Cormac McCarthy has notably written about the west of Texas and in the Southern Gothic style, but he's from Rhode Island originally.  Owen Wister, who is sometimes credited with inventing the Western novel (and at the time he wrote The Virginian he was writing about the recent past) was very much an Easterner.  His friend Theodore Roosevelt wrote beautifully about the West of his day, but he was a new Yorker.  Frederic Remington, the legendary illustrator and painter, is not only famous for his Western paintings and illustrations, which dramatically capture an era, but he was a writer as well, writing on the same topics that he depicted in his paintings.   Edward Abbey was from Pennsylvania and didn't experience the West until he was 18 years old.  Thomas Berger who wrote the only really great novel about Indians, Little Big Man, lived on the East Coast his entire life.

President Theodore Roosevelt, who was also a prolific reader and writer.

But I am saying that there's something different about writing on a culture that you are part of and about a region you are from.  I'd even go on to say that its really difficult to do that without being born in an area. Some writers can pull that off, but they are few.  So if you were born and raised in New England, or Zimbabwe, two actual examples for recent "Western writers", you can probably credibly pull off novels about the shipping news, or not going to the dogs tonight, but your regional novels aren't going to appear authentic to anyone from the region at all, because they are not.

Indeed, could Go Kill A Mockingbird have been written by anyone but a Southerner?  What about anything that Flannery O'Connor wrote. . . would they have been just as impactful if written by a Vermonter?   Would Doctor Zhivago have been what it was if it was written by a New Yorker?  Could Musashi have been written by anyone other than Ejii Yoshikawa?

I doubt it.

Boris Pasternak, who was born in Imperial Russia in 1890 and who died in the Soviet Union in 1960.  His famous work is the novel about the Russian doctor Zhivago, who would have been born right about the same time and and have experienced many of the same things.  Hardly anybody would maintain that a non Russian, let alone a non Russian who hadn't experienced these things, could have written a novel like Doctor Zhivago.

So I'm talking about writers who have spent their youth, even if not perhaps born here, in the real West.  Writers growing up, like Norman Maclean, in Montana, or writers growing up in Wyoming, Idaho, Nebraska, North and South Dakota, New Mexico, and so forth.  And writers, I will credit, from Texas.  Having said all of that, I'd currently exclude writers, for the most part, who may be from any of those regions but whose lives have been spent in the really big cities of the region, like Denver, Dallas or Houston. Big cities are their own thing, and that thing isn't the West.  Modern Denver, and indeed increasingly much of the Front Ranger for hundreds of miles around it, are no more The West than Newark is.  So too with Las Vegas, Phoenix, or any of the giant Texas cities.

Anyhow, some observations.

Western writers, as I've defined them, clearly have a deep, deep, love for the region.  If you read, for example, Norman Maclean's work, he clearly loved Montana.  Indeed, no other writer described the Rocky Mountain West as accurately and deeply as Maclean.  Nobody.

Mari Sandoz clearly loved Nebraska and the plains.  So did Willa Cather.

And what's so notable about that is that they all left the region they loved.

In the film A River Runs Through It and in the novella, Norman Maclean has his brother express the view that he, the brother, will "never leave Montana".  Indeed, Maclean has Paul, his brother, express the view that those who moved from Montana to the West Coast suffered from moral defects, a view a lot of Westerners do in fact have.  But both Paul Maclean and Norman Maclean, in real life, moved to Chicago. At the time that he wrote his works, late in life, Norman Maclean had spent more years in Chicago than in Montana.  He died in Chicago in 1990 at age 87 (his wife, Jessie, had a much shorter life, dying due to respiratory aliments in 1968 at age 63).



Mari Sandoz was born in Nebraska in 1896. She moved to Denver, which at that time remained a Western city, in 1940, at which time she was 44  years old, but then moved to New York City in 1943, where she remained until her death at age 69 in 1966.



Wila Cather, was born in 1873 and her family moved to Nebraska in 1883.  She was steeped in the West from her youth, but she moved to Pittsburgh in 1896, at which time she was an up and coming writer.  She moved to New York in 1905, which is where she remained for the rest of her life.

What's going on here?  It seems that "Western" writers don't achieve success at that unless they've moved to somewhere distinctly non Western.

Maybe some of that has to do with what Garrison Keillor, who is a Western writer (Minnesota and North Dakota are part of the West the way I've defined them) noted about the region in general.  Our number one export is our children.  While we often don't credit it, and we frequently argue about it, the West has both a small population and a good educational system.  We work hard here to educate our youth, but we really don't have anywhere for them to go, as a rule.  That's been noted by outsiders, such as non Westerner, Sam Western (who is in  the non Westerner import class of writer), but they rarely seem to grasp the nature of it.  The West remains the West, where it has, because of natural features which translate into economic ones.  This means that while we really appreciate the need for solid educations, it also means that we educate generation after generation of Westerners who have no place to go with their educations. So they go elsewhere.

That seems to me to be the story for Maclean and Cather.  Norman Maclean obtained a degree in English from Dartmouth in 1924. What use would that have been in the Montana of 1924, or for that matter in the Montana of 2019?  It'd be limited, at best.  He clearly retained his affection for Montana and spoke of himself, from his actual home in Chicago, as a Montanan in his writings.  He married a woman from Montana in 1931, showing the extent to which he retained actual roots there. But he lived and died in Chicago.

The situation for Cather was likely even more pronounced.  An educated woman in the West in the 1890s, her career options were necessarily  highly limited.  Indeed, they were limited in the Western world in general. She never married, something very unusual for her era, and focused on her writing career, but that would fairly obviously be a lot easier to do from New York than from Nebraska.

Sandoz doesn't quite fit this mold, but maybe she provides another example.  Sandoz was a difficult character from her youth on but first found herself published while living in Nebraska, having relocated to Lincoln from the Sand Hills. She's struggled up to that point to establish herself as a writer, but when she did, it was with two novels both of which met with gigantic disapproval in Nebraska.  So she moved to Denver, and then on to New York.

And perhaps Michael Punke gives us another example.  Punke is the author of The Revenant.  Punke was born in Torrington Wyoming.  He's a practicing lawyer, as well as an author (and therefore obviously a much more disciplined person than myself), but he has worked nearly exclusively outside of the West, both inside of and outside of government.

And maybe Punke's example brings home that this phenomenon is widespread with Westerners in general.  At what point you cease to be a Westerner by leaving a region can be debated.  I think it that does happen, and am one of the many who disregard lamentations published in the letters to the editor section of the newspapers that start off with "I read the article about so and so last week, and while I left Wyoming forty years ago. . . .". 

But it's clear that people who were largely raised in a region conceive of themselves, quite often, as remaining part of it their entire lives.  Which I suppose makes sense.  Wendell Berry has lamented that modern American life means that people don't become "of" a place, but maybe they do more than we might imagine (which is another reason that novelist from Zimbabwe or Vermont don't become regional authors by moving here).  Beyond that, however, what we see with writers may be nothing more than what we see with legions of Westerners.

For a long time, at least for rural Westerners, which is a definition that would fit many in the West, growing up and getting an education has meant either narrowing the scope of your education or leaving.  I.e., if you are educated as a lawyer, doctor, veterinarian, school teacher, accountant, or engineer, you can find work here.  But if you have a PhD in English, you probably better be looking elsewhere.

Indeed, even with these other professions, as time marches on, this is becoming more and more true.  In 1990, at the time I graduated from the University of Wyoming's law school, it was already the case that maybe 1/3d of the class was headed to Colorado.  In some recent years over half the class has, as changes in the nature of practice have made that necessary.  Indeed, with the passage of the UBE, there's really no longer a reason for a Wyoming law school at all, and its only a matter of time until the legislature realizes that.

For some this is compounded with the American ethos of money meaning everything.  There are areas of various professions you can find work in the state, to be sure, but it won't pay the same lucrative amount that it might elsewhere.  So people move for the money.  Interestingly, they often find themselves in personal conflict after that, and are often among those writing to the editor with letters such as; "I'm distressed to read that such and so is going in near my beloved home town of Little Big Horn. . . I want it to be just like it was when I left in 1959 and I'm planning to return soon from the hideous dump of Los Angeles where I've been piling up cash since the early 1960s . . ." 

So, maybe it's the nature of the regional economy, and perhaps the national economy at that.  Writers gravitate to where the writers are, and the writers, by and large, are in the big cities.

Not all of them of course, but a lot of them.

Maybe.

Maybe something else is also at work, and perhaps that's most notable in what we noted above about Mari Sandoz. She didn't leave Nebraska for more futile publishing grounds.  She left Nebraska as she was taking a lot of heat after getting published.  Indeed, her second novel was censored in the state.

So maybe its the classic example of a person not really being too welcome on their own home ground in some instances.

In fairness, Sandoz's writing was always very critical of various things, and indeed quite frankly her histories, for which she remains famous, aren't terribly accurate in various ways.  At least her histories haven't born the test of time except, perhaps, for Old Jules, the book her extraordinarily difficult father asked her to write about him after his passing.  But still, maybe the West doesn't welcome its own writers much?

Or maybe it does.  Novelist Jim Harrison, who was from Michigan, which is pretty rural in some locations and the near west to a degree, lived in Arizona and Montana after leaving Michigan.  Garrison Keillor, mentioned above, flirted with New York after already being well known, but returned to Minnesota.  Patrick McManus, the humor writer, lived in the West his entire life.  Current crime writer C. J. Box, whose protagonist is a Wyoming Game Warden, is from Wyoming.  Tim Sandlin, whom I've never read, was born in Oklahoma but lives in Jackson.

Indeed, if Oklahoma is sort of like Texas in some ways, it's worth noting that Texas has had a lot of native authors who have continued to live in Texas, Larry McMurtry notable among them.  McMurtry grew up on a ranch outside of Archer, Texas, a town so far north in Texas its nearly in Oklahoma.

So added to that, maybe these long distance travels aren't as far as they seem. . . in some instances.  In my grandfather's era Chicago was the hub of the western cattle industry and Denver just a very large city on the plains.  Chicago's role in that went away, but the point is that economists and politicians who are baffled by the fact that the West doesn't spawn very many large cities are potentially missing the point that it has. . . its just that everything is more spread out here.  So Chicago, a Midwestern city, may have more of a link to the West of an earlier era than we might suppose.  Denver serves that purpose for much of the Northern Plains now and, I dare say, Calgary does as well at a certain point.

Indeed, those cities filled that roles, or fill them, as they were, or are, centers of industry for regions.  And while we don't like to think of writing as an industry, it's a type of one, so perhaps some relocation makes sense.  Indeed, it might even now, in spite of the electronic age, which seems to be pulling the working population towards the city centers like a black hole draws in light.

Anyhow, something to ponder.

Friday, June 17, 2016

Corporate farming. Why?

Nebraska prohibits corporate farming in its constitution:

XII-8.

Corporation acquiring an interest in real estate used for farming or ranching or engaging in farming or ranching; restrictions; Secretary of State, Attorney General; duties; Legislature; powers.

That Article XII of the Constitution of the State of Nebraska be amended by adding a new section numbered 8 and subsections as numbered, notwithstanding any other provisions of this Constitution.
Sec. 8(1) No corporation or syndicate shall acquire, or otherwise obtain an interest, whether legal, beneficial, or otherwise, in any title to real estate used for farming or ranching in this state, or engage in farming or ranching.

Corporation shall mean any corporation organized under the laws of any state of the United States or any country or any partnership of which such corporation is a partner.

Farming or ranching shall mean (i) the cultivation of land for the production of agricultural crops, fruit, or other horticultural products, or (ii) the ownership, keeping or feeding of animals for the production of livestock or livestock products.

Syndicate shall mean any limited partnership organized under the laws of any state of the United States or any country, other than limited partnerships in which the partners are members of a family, or a trust created for the benefit of a member of that family, related to one another within the fourth degree of kindred according to the rules of civil law, or their spouses, at least one of whom is a person residing on or actively engaged in the day to day labor and management of the farm or ranch, and none of whom are nonresident aliens. This shall not include general partnerships.

These restrictions shall not apply to:
(A) A family farm or ranch corporation. Family farm or ranch corporation shall mean a corporation engaged in farming or ranching or the ownership of agricultural land, in which the majority of the voting stock is held by members of a family, or a trust created for the benefit of a member of that family, related to one another within the fourth degree of kindred according to the rules of civil law, or their spouses, at least one of whom is a person residing on or actively engaged in the day to day labor and management of the farm or ranch and none of whose stockholders are non-resident aliens and none of whose stockholders are corporations or partnerships, unless all of the stockholders or partners of such entities are persons related within the fourth degree of kindred to the majority of stockholders in the family farm corporation.

These restrictions shall not apply to:
(B) Non-profit corporations.
These restrictions shall not apply to:
(C) Nebraska Indian tribal corporations.
These restrictions shall not apply to:
(D) Agricultural land, which, as of the effective date of this Act, is being farmed or ranched, or which is owned or leased, or in which there is a legal or beneficial interest in title directly or indirectly owned, acquired, or obtained by a corporation or syndicate, so long as such land or other interest in title shall be held in continuous ownership or under continuous lease by the same such corporation or syndicate, and including such additional ownership or leasehold as is reasonably necessary to meet the requirements of pollution control regulations. For the purposes of this exemption, land purchased on a contract signed as of the effective date of this amendment, shall be considered as owned on the effective date of this amendment.
These restrictions shall not apply to:
(E) A farm or ranch operated for research or experimental purposes, if any commercial sales from such farm or ranch are only incidental to the research or experimental objectives of the corporation or syndicate.
These restrictions shall not apply to:
(F) Agricultural land operated by a corporation for the purpose of raising poultry.
These restrictions shall not apply to:
(G) Land leased by alfalfa processors for the production of alfalfa.
These restrictions shall not apply to:
(H) Agricultural land operated for the purpose of growing seed, nursery plants, or sod.
These restrictions shall not apply to:
(I) Mineral rights on agricultural land.
These restrictions shall not apply to:
(J) Agricultural land acquired or leased by a corporation or syndicate for immediate or potential use for nonfarming or nonranching purposes. A corporation or syndicate may hold such agricultural land in such acreage as may be necessary to its nonfarm or nonranch business operation, but pending the development of such agricultural land for nonfarm or nonranch purposes, not to exceed a period of five years, such land may not be used for farming or ranching except under lease to a family farm or ranch corporation or a non-syndicate and non-corporate farm or ranch.
These restrictions shall not apply to:
(K) Agricultural lands or livestock acquired by a corporation or syndicate by process of law in the collection of debts, or by any procedures for the enforcement of a lien, encumbrance, or claim thereon, whether created by mortgage or otherwise. Any lands so acquired shall be disposed of within a period of five years and shall not be used for farming or ranching prior to being disposed of, except under a lease to a family farm or ranch corporation or a non-syndicate and non-corporate farm or ranch.

These restrictions shall not apply to:
(L) A bona fide encumbrance taken for purposes of security.
These restrictions shall not apply to:
(M) Custom spraying, fertilizing, or harvesting.
These restrictions shall not apply to:
(N) Livestock futures contracts, livestock purchased for slaughter, or livestock purchased and resold within two weeks.

If a family farm corporation, which has qualified under all the requirements of a family farm or ranch corporation, ceases to meet the defined criteria, it shall have fifty years, if the ownership of the majority of the stock of such corporation continues to be held by persons related to one another within the fourth degree of kindred or their spouses, and their landholdings are not increased, to either re-qualify as a family farm corporation or dissolve and return to personal ownership.
The Secretary of State shall monitor corporate and syndicate agricultural land purchases and corporate and syndicate farming and ranching operations, and notify the Attorney General of any possible violations. If the Attorney General has reason to believe that a corporation or syndicate is violating this amendment, he or she shall commence an action in district court to enjoin any pending illegal land purchase, or livestock operation, or to force divestiture of land held in violation of this amendment. The court shall order any land held in violation of this amendment to be divested within two years. If land so ordered by the court has not been divested within two years, the court shall declare the land escheated to the State of Nebraska.

If the Secretary of State or Attorney General fails to perform his or her duties as directed by this amendment, Nebraska citizens and entities shall have standing in district court to seek enforcement.
The Nebraska Legislature may enact, by general law, further restrictions prohibiting certain agricultural operations that the legislature deems contrary to the intent of this section.
North Dakota prohibits corporate farming by statute: 
10-06.1-02. Farming or ranching by corporations and limited liability companies prohibited.

All corporations and limited liability companies, except as otherwise provided in this chapter, are prohibited from owning or leasing land used for farming or ranching and from engaging in the business of farming or ranching. A corporation or a limited liability company may be a partner in a partnership that is in the business of farming or ranching only if that corporation or limited liability company complies with this chapter.

10-06.1-3. Retention of mineral interests prohibited.

For land and minerals acquired after July 1, 1985, any corporation or limited liability company that acquires mineral interests through foreclosure or in lieu of foreclosure which were not specifically valued at the time the security interest in the minerals was acquired, and which prohibited from owning or leasing land used in farming or ranching, is prohibited from retaining mineral interests in land used for farming or ranching when the corporation or limited liability company divests itself of the land, and the mineral interests must be passed with the surface estate of the land when the corporation or limited liability company divests itself of the land under this chapter.
South Dakota also prohibits its statutorily:
47-9A-1.   Agriculture prohibited as corporate or limited liability company purpose. The Legislature of the State of South Dakota recognizes the importance of the family farm to the economic and moral stability of the state, and the Legislature recognizes that the existence of the family farm is threatened by conglomerates in farming. Therefore, it is hereby declared to be the public policy of this state, and shall be the provision of this chapter, that, notwithstanding the provisions of § 47-1A-301, no foreign or domestic corporation, except as provided herein, shall be formed or licensed under the South Dakota Business Corporation Act for the purpose of owning, leasing, holding or otherwise controlling agricultural land to be used in the business of agriculture.

It is further declared that no foreign or domestic limited liability company, except as provided herein, shall be formed or licensed under the South Dakota Limited Liability Company Act for the purpose of owning, leasing, holding or otherwise controlling agricultural land to be used in the business of agriculture.
So does Kansas:
17-5904. Restrictions; exceptions; penalties. (a) No corporation, trust, limited liability company, limited partnership or corporate partnership, other than a family farm corporation, authorized farm corporation, limited liability agricultural company, family farm limited liability agricultural company, limited agricultural partnership, family trust, authorized trust or testamentary trust shall, either directly or indirectly, own, acquire or otherwise obtain or lease any agricultural land in this state. The restrictions provided in this section do not apply to the following:
(1) A bona fide encumbrance taken for purposes of security.
(2) Agricultural land when acquired as a gift, either by grant or devise, by a bona fide educational, religious or charitable nonprofit corporation.
(3)  Agricultural land acquired by a corporation or a limited liability company in such acreage as is necessary for the operation of a nonfarming business. Such land may not be used for farming except under lease to one or more natural persons, a family farm corporation, authorized farm corporation, family trust, authorized trust or testamentary trust. The corporation shall not engage, either directly or indirectly, in the farming operation and shall not receive any financial benefit, other than rent, from the farming operation.
(4)  Agricultural land acquired by a corporation or a limited liability company by process of law in the collection of debts, or pursuant to a contract for deed executed prior to the effective date of this act, or by any procedure for the enforcement of a lien or claim thereon, whether created by mortgage or otherwise, if such corporation divests itself of any such agricultural land within 10 years after such process of law, contract or procedure, except that provisions of K.S.A. 9-1102, and amendments thereto, shall apply to any bank which acquires agricultural land.
(5) A municipal corporation.
(6)  Agricultural land which is acquired by a trust company or bank in a fiduciary capacity or as a trustee for a nonprofit corporation.
(7)  Agricultural land owned or leased or held under a lease purchase agreement as described in K.S.A. 12-1741, and amendments thereto, by a corporation, corporate partnership, limited corporate partnership or trust on the effective date of this act if: (A) Any such entity owned or leased such agricultural land prior to July 1, 1965, provided such entity shall not own or lease any greater acreage of agricultural land than it owned or leased prior to the effective date of this act unless it is in compliance with the provisions of this act; (B) any such entity was in compliance with the provisions of K.S.A. 17-5901, prior to its repeal by this act, provided such entity shall not own or lease any greater acreage of agricultural land than it owned or leased prior to the effective date of this act unless it is in compliance with the provisions of this act, and absence of evidence in the records of the county where such land is located of a judicial determination that such entity violated the provisions of K.S.A. 17-5901, prior to its repeal shall constitute proof that the provisions of this act do not apply to such agricultural land, and that such entity was in compliance with the provisions of K.S.A. 17-5901, prior to its repeal; or (C) any such entity was not in compliance with the provisions of K.S.A. 17-5901, prior to its repeal by this act, but is in compliance with the provisions of this act by July 1, 1991.
(8)  Agricultural land held or leased by a corporation or a limited liability company for use as a feedlot, a poultry confinement facility or rabbit confinement facility.
(9) Agricultural land held or leased by a corporation for the purpose of the production of timber, forest products, nursery products or sod.
(10) Agricultural land used for bona fide educational research or scientific or experimental farming.
(11)  Agricultural land used for the commercial production and conditioning of seed for sale or resale as seed or for the growing of alfalfa by an alfalfa processing entity if such land is located within 30 miles of such entity's plant site.
(12) Agricultural land owned or leased by a corporate partnership or limited corporate partnership in which the partners associated therein are either natural persons, family farm corporations, authorized farm corporations, limited liability agricultural companies, family trusts, authorized trusts or testamentary trusts.
(13) Any corporation, either domestic or foreign, or any limited liability company, organized for coal mining purposes which engages in farming on any tract of land owned by it which has been strip mined for coal.
(14) Agricultural land owned or leased by a limited partnership prior to the effective date of this act.
(15)  Except as provided by K.S.A. 17-5908, as it existed before the effective date of this act, and K.S.A. 1998 Supp. 17-5909, agricultural land held or leased by a corporation or a limited liability company for use as a swine production facility in any county which, before the effective date of this act, has voted favorably pursuant to K.S.A. 17-5908, as it existed before the effective date of this act, either by county resolution or by the electorate.
(16)  Agricultural land held or leased by a corporation, trust, limited liability company, limited partnership or corporate partnership for use as a swine production facility in any county where the voters, after the effective date of this act, have voted pursuant to K.S.A. 17-5908, and amendments thereto, to allow establishment of swine production facilities within the county.
(17) Agricultural land held or leased by a corporation, trust, limited liability company, limited partnership or corporate partnership for use as a dairy production facility in any county which has voted favorably pursuant to K.S.A. 17-5907, and amendments thereto, either by county resolution or by the electorate.
(18) Agricultural land held or leased by a corporation or a limited liability company used in a hydroponics setting.
(b)  Production contracts entered into by a corporation, trust, limited liability company, limited partnership or corporate partnership and a person engaged in farming for the production of agricultural products shall not be construed to mean the ownership, acquisition, obtainment or lease, either directly or indirectly, of any agricultural land in this state.
(c) Any corporation, trust, limited liability company, limited partnership or corporate partnership, other than a family farm corporation, authorized farm corporation, limited liability agricultural company, family farm limited liability agricultural company, limited agricultural partnership, family trust, authorized trust or testamentary trust, violating the provisions of this section shall be subject to a civil penalty of not more than $50,000 and shall divest itself of any land acquired in violation of this section within one year after judgment is entered in the action. The district courts of this state may prevent and restrain violations of this section through the issuance of an injunction. The attorney general or district or county attorney shall institute suits on behalf of the state to enforce the provisions of this section.
(d)  Civil penalties sued for and recovered by the attorney general shall be paid into the state general fund. Civil penalties sued for and recovered by the county attorney or district attorney shall be paid into the general fund of the county where the proceedings were instigated.
Food for thought for Wyoming?

Friday, April 17, 2015

Tuesday, April 7, 2015

Lex Anteinternet: Lex Anteinternet: Lex Anteinternet: And the pumps ...

Our most recent look at the state of the oilfield was posted several days ago, here:
Lex Anteinternet: Lex Anteinternet: Lex Anteinternet: And the pumps ...: This past weekend, the week after I posted this Lex Anteinternet: Lex Anteinternet: And the pumps kept on. : And following on this: Lex...
At the time I posted that entry, Chesapeake energy was the regional bright spot, having announced a few weeks prior that it was keeping on with its oil exploration program in the state.

Well, now its reversed course and is scaling back, like everyone else.  If there's a bright spot in the oil economy, therefore, this isn't it.

We still here that some exploration is going on in North Dakota, in shallow fields (I'm told, but which I somewhat doubt).  As I don't get the North Dakota news readily, I don't know the full state of things up there, but I wonder.

Postscript

And, also today, Noble Energy has announced that its cutting employees in Colorado, Texas and Pennsylvania. 

Thursday, December 4, 2014

$40/barrel?

 http://farm9.staticflickr.com/8339/8254138611_1bcaf6fab5_k.jpg

Driven by Saudi Arabian efforts, the price of petroleum oil is falling through the floor.  When I last checked, it was down under $70/bbl.  I read a prediction the other day that it may actually fall as low as $40/bbl. While I haven't checked to make sure, at $40/bbl, it will be at a historic low in real terms.  That is, in actual value, it would never have been that cheap before.

I've been sort of waiting for something like this to happen for awhile, but not quite in this fashion. That's mostly due to having a long term memory.  I have lived here my entire life, and I well remember the last time the price of oil went through the floor.  The irony of our local economy has long been that if the price of oil is high, the times are good here, and the economy super heated.  If the price is low, we locally slide into a recession or even a depression.  For those who experienced this in the early 1980s, a recollection of an oilfield depression is pretty strong.  For those of us who are older with good memories, or who had parents who recalled it, a similar event was also strongly recalled that occurred in the 1960s.  And for students of history, we now that another one happened right after World War One, in the 1930s, and again in the 1940s following World War Two.

Now, not all of these events were the same in scope or impact, although they were all big deals locally. The size of some towns decreased by about 80% following the one in the late 1940s.

Of course, some things have changed.  For one thing, the cause and circumstances of the prior falls were all a bit different than what we're currently seeing.  The declines after World War One and World War Two came during an era when we were a net oil exporter and there was a sudden global decline in demand due to the end of the wars.  The decline in the 1930s was due to a global depression when all economic output drastically declined.

The most recent decline, of the early 1980s, was due to increased Arabian production combined with a fall at the pump, as OPEC began to become a bit unraveled and also as it became clear to the Saudi Arabians that a distressed American economy was bad for its long term economic stability.  That came in an era when we were desperately dependant on Arabian oil, something that came about unnoticed during the 1960s but which became obvious in 1973 when OPEC enacted an embargo on export to the U.S. due to our support of Israel during the Yom Kippur War.  Every year after that the US tried to become more independent of foreign oil but failed, leading to a decade of rising oil prices, until OPEC, or really Saudi Arabia, fearing American economic instability, dropped the prices, and as OPEC lost a lot of its steam in the wake of the Iranian revolution.

The decline of the early 1980s lead to an oil patch depression that really only slowly began to go away in the late 1980s, going into an oil patch recession that really lasted up until the mid 1990s at least. There was some stability after that, and then a boom erupted in the last decade that remains unabated.  Local economist debate if there is a boom, but there is.  Anyone can see it with their naked eyes.  The cost of anything land related has shot up, as its become scarce, and we're up over 100% statistical full employment.

But that's how things were around 1980-1982 as well, and hence the waiting for the other shoe to drop that long term locals have had, and indeed that some in the industry have had.  It can't go on forever, it would seem.  But recently people have sort of dared to think it sort of might, even though that clearly cannot happen. Once all the fields are drilled, they're drilled. That creates its own infrastructure, of course, which must be serviced, but still, it isn't the same as when all the regional rigs are working.

But the times aren't quite what they were in the early 80s either.  For one thing, and apparently the cause of the current Saudi effort, the US is not really that dependant on foreign oil anymore.  Advances in technology have opened up vast resources in the U.S., and the U.S. is an energy, albeit not oil, exporter.   As prices have stabilized at a fairly high, by historical standards, pump rate, it's also been the case that Americans acclimated to it, which nobody expected, making the demand fairly stable.  And as that's occurred, its actually declined.  A new generation of Americans is not car enamored.  And the historical memory of foreign oil enslavement remains strong such that there is widespread support for increased CAFE standards and even from shifting away for oil entirely, if possible, for fuel.  So price stability hasn't resulted so far in a price fall, exploration has kept on keeping on bringing more resources to the global supply at what was the existing rate, thereby increasing the profitable supply while decreasing the foreign imports. And, as North American is one continent and one giant oil province, the technological advances that have made this possible in the United States, that being horizontal drilling, have also made it possible in Canada, which has pretty much supplanted Arabia as our go to source for petroleum.

It took the Saudis a long time to awaken to this, and they probably just didn't believe it would last, but they're awake now and according to what I've read, and what industry insiders have told me, this is a calculated Saudi effort to shut down American exploration.  The thesis is that by depressing the price it'll fall below the level at which it will be profitable to explore in the United States and Canada, and it seems to be working.  According to what I'm reading, drilling is in fact being postponed.  It isn't as if the newly known fields are going to go away, but contrary to what some of the news was on these fields earlier in the recent boom, it isn't as if all of these fields weren't known in some way before.  Some are wholly new, however.

The long term impact of this will be really interesting.  Chances are pretty good that in the new oil provinces in the United States and Canada there will be an economic downturn.  My guess is that it might be pretty stout in North Dakota, which hadn't seen exploration of this type since the Williston Basin days of the late 1970s and early 1980s, and which otherwise had a relatively depressed farm economy.  In Wyoming and Montana, where the boom has been very real but somewhat muted, the impact is unlikely to be as severe.  This will mean, I suspect, that the percentage of oil the U.S. imports will rise, but my guess is that it won't rise as spectacularly as the Saudis hope it will.  Perhaps showing how severe it was, the memory of the import crisis of the 1970s has not really ever gone away and there remains pretty strong support for more and more fuel efficient vehicles, a movement that's also tied into increasing environmental concerns.  Somewhat related in terms of impact, it appears that the American cultural fascination with automobiles is ending, and that also means that cars are viewed increasingly as only one of several utilitarian options for getting around, and not one that's seen as glamorous or even desirable by younger people, who are willing to buy what's economical and abandon cars altogether if economically rational.  Moreover, given the advance in technology in oil production, the United States will retain at this point an ability to increase production, which will mean that the Saudis will have to keep the price low in order to keep their share of production high. That has long term impacts on them, as even though they'll be making money, they have to do it through low prices and high production, a program that has long term impacts on their reserves and their own economy.