Page last updated at 09:47 GMT, Monday, 19 October 2009 10:47 UK

Montana town revels in oil boom

By Kevin Connolly
BBC News, Montana

The small, remote town of Sidney, Montana, is true to its cowboy roots - this is ranching country and outside one bar amidst the many pick-up trucks I noticed one with a huge set of bull horns stuck jauntily to the cab.

A nodding-donkey oil pump, Montana
Nodding-donkey oil pumps dot the farmland around the town of Sidney

But Sidney has another reason to feel bullish too: as America agonises over its future energy choices, Sidney is revelling in an oil boom.

The town's mayor, Bret Smelser, took me for a drive through the town and across the flat farmland that stretches off to the horizon in every direction to see the changes oil has brought.

Inside Sidney - population about 5,000 - the changes leap to the eye.

There's a new water-slide, for example, plenty of evidence of heavy investment in local schools and a startling number of slot-machine casinos whose operators presumably calculate that the townspeople and workers from the oilfields have money to burn.

There is an urban myth that it has also meant that Sidney has the highest-paid pizza delivery guy in North America, but we'll come back to that.

Mayor Smelser sums up the situation so far simply: "Oil has been good for us."

Shale reserves

On the landscape beyond the town limits, the change is less spectacular but equally impressive.


Dotted around the farmland are hundreds of nodding-donkey oil wells which are strangely reminiscent of the kind of pumps you'd have seen in action during oil booms in Texas, California or Oklahoma a century ago.

The similarity is deceptive. The oil boom up on the Northern Great Plains is based on dramatic changes in drilling technology. Oil deposits beyond the reach of even the most modern pumps and drills 20 years ago are now viable.

Sidney - and plenty of other small towns like it on the Great Plains of North Dakota and Montana - sit on top of the shale reserves of the Bakken Formation. They were first discovered and mapped in the 1950s but back then there was no way of reaching them.

Now, new technologies are changing the definition of what is, and is not, a recoverable oil deposit.

The modern nodding-donkeys are sitting on top of a complex network of hi-tech pipes which bore down two miles into the earth's crust then make a sharp right-angled turn and travel up to two miles horizontally into the oil-bearing shale.

Every so often, the light, sweet, crude has to be dislodged and flushed out with steam or water forced down under huge pressure.

Appetite for oil

All this is taking place, of course, in the midst of Barack Obama's attempt to make the US a "greener" place - partly to reduce its dependence on foreign oil and partly to create some sense of American leadership as the world prepares for the UN conference on climate change in Copenhagen.

Mayor Bret Smelser
We're at the epicentre of energy, whether that's traditional or renewable
Mayor Bret Smelser

As a candidate, Mr Obama talked about harnessing the power of the wind and the sun and increasing US research into projects like building a smarter electricity grid, arguing that in these cases what's good for the planet can be good for American jobs too.

Mayor Smelser, up on the frontline of America's energy choices in Sidney, says he doesn't necessarily disagree with any of that - in fact he'd like to see Montana starting to refine more of the oil it produces and getting into alternative energies too.

It's just that he believes that the timeframe for reducing America's appetite for oil and bringing alternative energy on stream in a big way is much longer than the White House likes to contemplate.

Wind and solar power, he says, won't be big enough to supply America for years. Oil is right here, right now.

He told me: "We know that a new source of energy is going to come, whether it's hydrogen, whatever it is. We're saying we need a bridge between now and then and we're at the epicentre of energy, whether that's traditional or renewable."

American dream

It is all a reminder of the obvious, but sometimes overlooked, point: that for all the talk of global warming and green energy, America is essentially still powered by coal (for electricity generation) and gasoline.

Scott Staffanson, Montana farmer
Scott Staffanson says the income from oil helps keep his farm running

That is good news for farmers like Scott Staffanson, a thoughtful, strong, slow-talking character who lives just outside Sidney but whose family also receives a steady income from the oil discovered far below the land on which he grows his crops and tends his cattle.

His take on what that extra income means is interesting. It doesn't give him wealth beyond the dreams of avarice - it just finances his slice of the American dream.

"This is the first year since I started farming that I didn't need to go to the bank to borrow money to operate with," he said.

"I've got four girls and by the time they get done with college, I don't imagine we're going to have a lot of money to do a lot of lucrative things."

Jobs galore

And the rumours of that sky-high pizza delivery salary?

Bill Ackley, at Footers restaurent, Sidney
Restaurant manager Bill Ackley says the oil boom has pushed up wages

Well, at the height of the boom it was reported that someone in the local fast food industry was being paid $38 (£23) an hour to shuttle around the town with pepperoni and four seasons pizzas - a job which wouldn't normally pay far above minimum wage here.

No-one is quite sure where the figure came from but there's no doubt that the high salaries available in the local oilfields have made it difficult for other local employers to find workers.

Bill Ackley, who manages a local restaurant called Footer's, says it is a long-running problem.

"The rest of the country is basically suffering because there's no jobs where they're at but we keep telling them to head this way because there's more than enough," he said.

"I won't say our wages have doubled but they've gone up to compete with the oil and gas and we just can't compete with them."

Great wilderness

There are downsides to all this, of course.

The more you drill for oil, the longer the delay in making a really serious switch to cleaner forms of energy.

And, of course, to exploit the Bakken oil deposits you have to drill into the lonely majesty of the Great Plains... transforming a great wilderness with the intrusion of so many nodding-donkey pumps.

Mayor Smelser, who loves his town and the remote stretch of Montana that lies around it, says that on balance he feels it's worth it.

He said: "I don't speak for everyone but I think the majority of us understands that this is just something we have to do.

"This half of Montana only has maybe 20,000 people living in it and many of the people on the farms benefit from the minerals and are ready to put up with it."

So perhaps over the course of Barack Obama's time in power a cleaner, greener America will emerge - and we will get some sense of that from Copenhagen - but in the meantime, the oil lobby in places like Sidney, Montana, is strong.

And so is America's appetite for Sidney's oil.

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