$100 Oil Drives Western North Dakota Oil Boom

DICKINSON, N.D. A surge in crude-oil production in North Dakota is fueling a railroad boom in one of the nation's most remote regions, as producers bet that trains will be a quick and lucrative way to break a transportation bottleneck.

Production at the Bakken Shale in North Dakota could double over the next five years. But until new pipelines are built to handle the surge, companies are increasingly relying on rail to get the oil to market. WSJ's Mark Peters reports.

North Dakota's output has grown in the last three years from a trickle to nearly 450,000 barrels a day—trailing only Texas, Alaska and California—and could double by the middle of the decade, according to analyst and industry projections. But pipelines in the region already are operating at capacity, and major new lines aren't expected to start going into service until 2013.

In response, companies are building rail terminals. Rail terminals can be developed quickly, giving them an advantage for now over pipelines. The North Dakota Pipeline Authority estimates a doubling in rail-terminal capacity next year alone to more than 700,000 barrels a day.

Most of the oil gets to the train depots by truck, picked up from thousands of wells scattered off dirt roads. At night, natural gas being flared from the oil wells casts an eerie glow over the vast prairie lands.

North Dakota boasts the nation's lowest unemployment rate, at 3.5%, as companies scramble to attract truck drivers and construction workers to keep pace with the crude. On a recent morning, the sound of a rivet gun mixed with the hum of truck engines in Dickinson, a key jumping-off point just south of the oil fields. Workers laid railroad tracks and truckers filled oil tanks, rushing to open the Bakken Oil Express Rail Hub, a new rail terminal nestled among wheat fields.

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• North Dakota
• Oil Boom
• Bakken Oil Boom
• Bakken Formation Oil Trucking
• Bakken Oil Express Rain Hub
• Oil & Gas
• Energy Economy
• Oil Jobs