FRONT PAGE CONTRIBUTOR
Harold Hamm and the North Dakota Miracle
Unlike most of his peers, Harold Hamm didn’t get his start in the oil field with degree in geology or engineering. Hamm drove a truck. Maybe the lack of a college degree made it easier for Hamm to imagine the possible and focus on making it happen.
“Imagining the possible” allowed Hamm to build the nation’s 14th-largest oil company, Continental Resources, based in Enid, OK. (The company plans to move its headquarters to Oklahoma City in 2012.)
Hamm is the subject of The Wall Street Journal’s Weekend Interview: “How North Dakota Became Saudi Arabia“
Hamm and Continental are credited with unlocking the crude oil of the Bakken Shale of North Dakota and Montana. He believes it is possible that the Bakken’s ultimate bounty of oil will surpass Alaska’s Prudhoe Bay and may even reach 24 billion barrels, roughly equivalent to the current-day total proved reserves of the U.S.
I’m not sure I buy that, but I don’t feel like betting against Mr. Hamm, either. He currently ranks #33 on the Forbes 400, and if his success in the Bakken holds, he’ll soon be in Warren Buffett territory.
Recently, Hamm was rubbing shoulders with Buffett, Bill Gates and other mega-millionaires at a White House “giving summit”.
When it was Mr. Hamm’s turn to talk briefly with President Obama, “I told him of the revolution in the oil and gas industry and how we have the capacity to produce enough oil to enable America to replace OPEC. I wanted to make sure he knew about this.”
The president’s reaction? “He turned to me and said, ‘Oil and gas will be important for the next few years. But we need to go on to green and alternative energy. [Energy] Secretary [Steven] Chu has assured me that within five years, we can have a battery developed that will make a car with the equivalent of 130 miles per gallon.’” Mr. Hamm holds his head in his hands and says, “Even if you believed that, why would you want to stop oil and gas development? It was pretty disappointing.”
Washington keeps “sticking a regulatory boot at our necks and then turns around and asks: ‘Why aren’t you creating more jobs,’” he says.
Examples of the “regulatory boot” include:
- Excessive permitting delays for environmental and other reviews.
- Sarbanes-Oxley accounting rules, which could result in jail time for a CEO like Hamm for a field-level mistake, like misreported production.
- Criminal charges against Continental and six other operators for the deaths of 28 birds. (Not the extinction of 28 species, but the deaths of 28 individual birds.) Continental has pleaded not guilty. Its case involves the death of a single common sparrow-sized bird. Wind turbines kill thousands of birds every year; when is the last time you heard of the Fish and Wildlife Service going after a wind farm?
Given the nation’s current economic challenges, it is incomprehensible to Hamm that this Administration is doing everything in its power to limit oil and gas, while dumping money into a green energy sector that shows little promise beyond the value of political payback.
Mr. Hamm believes that if Mr. Obama truly wants more job creation, he should study North Dakota, the state with the lowest unemployment rate in the nation at 3.5%. He swears that number is overstated: “We can’t find any unemployed people up there. The state has 18,000 unfilled jobs,” Mr. Hamm insists. “And these are jobs that pay $60,000 to $80,000 a year.” The economy is expanding so fast that North Dakota has a housing shortage. Thanks to the oil boom—Continental pays more than $50 million in state taxes a year—the state has a budget surplus and is considering ending income and property taxes.
Obviously, oil has made Harold Hamm a very wealthy man. But one prolific field in the western part of the state may one day make North Dakota the nations leading oil producer while creating tens of thousands of good jobs. Hamm also points out that there are 10 million landowners receiving royalty payments on production from their property.
For the first time in two generations, energy security could be within our nation’s grasp. At a time when jobs are so sorely needed, reasonable oil and gas development could be an unparalleled engine of economic growth. Could be.
Let’s send Barack Obama packing and make it happen.
Cross-posted at stevemaley.com.