America's Fracking Boomtowns
Shale Oil Leads to Jobs, Wealth in Multiple Sectors
A rash of oil and gas boomtowns in the Dakotas, Pennsylvania, and Ohio is definitely contagious. It's spreading to Mississippi, Kansas, and more.
Thanks to advances in horizontal drilling and hydraulic fracturing (fracking), the United States is producing more barrels of oil per day than it has in a decade, bringing all the jobs and newfound wealth that come with it.
The quick surge in production has taken some small towns by surprise, leading to a strain on public services, infrastructure, and resources.
Given the course of the economy over the past few years, these are good problems to have. Too many jobs is better than not enough... Record housing shortfalls are better than record foreclosures... Increasing populations are better than desertion...
Just ask Detroit.
And in a double win-win, the solutions to these “problems” are actually additional economic stimuli.
If They Come, You Will Build It
Williston, North Dakota, didn't set out to be fracking's mecca; Haynesville, Louisiana, and Marcellus, New York weren't erecting new housing before the drilling crews came.
Towns like these were given a windfall by the powers of geology and technology.
I'm sure you've heard the stories of what such fast growth can do to small towns.
Harper County, Kansas, hadn't seen its population rise for more than a century — until last year. With a population stuck at 6,000 for the past 100 years, energy companies have added over 1,000 jobs in the area in just months.
Some of these towns have more jobs than able-bodied workers. Some towns are seeing negative unemployment rates, indicating a labor shortfall.
Skilled oil workers are making $100,000 salaries. High school graduates with no other education are averaging $60,000 in Kansas.
And these jobs beget more (high paying) jobs. Those workers need food and entertainment and medical care and housing...
Pizza Hut is paying workers in these areas almost twice minimum wage — and driving in campers for them to live in, since they can't afford the skyrocketing real estate.
The shale boom is making people money in every corner of the economy.
Fistfuls of it.
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Farmers leasing their land to drillers; the unemployed relocating thousands of miles for six-figure work; franchises rushing in to sell them pizza; even prostitution, the world's oldest profession, is booming.
Take Mitch Hall, for example. He learned that each fracked well needs millions of gallons of water — and that oil companies were willing to pay high prices to get that water.
So Mitch started H2O Drilling this year. The company will drill water wells onsite for fracking operations.
His first well is being drilled this month and he has 35 more lined up after that...
And the beauty of it is this economic boom is indiscriminate.
It's beneficial for Mitch Hall right up through the largest conglomerates — and everything in between.
Mitch is drilling wells; GE (NYSE: GE) is designing highly-advanced membrane systems to clean wastewater at oil operations.
This tide is lifting all ships.
You don't have to be a business owner to profit...
Simply by being aware of the opportunity — which most people are not — you have the chance to invest in public companies to leverage the shale boom for personal profits...
The drillers. The transporters. The pipeline operators. The water companies.
It's easy to get caught up in bad news, or, worse, to propagate it. I could've entitled this article (and many news outlets would've) something like, “Nation's Midwest Overrun with Oil Mongers”...
Or it could be 180 degrees different: “Shale Ushers in Midwest Prosperity.”
Point is many things in this life are dependent on the compass of sentiment and perspective.
Make sure you're armed with the information you need to point your needle in the right direction.
Your bottom line depends on it.
Call it like you see it,
Nick is the founder and president of the Outsider Club, and the investment director of the thousands-strong stock advisories, Early Advantage and Wall Street's Underground Profits. He also heads Nick’s Notebook, a private placement and alert service that has raised tens of millions of dollars of investment capital for resource, energy, cannabis, and medical technology companies. Co-author of two best-selling investment books, including Energy Investing for Dummies, his insights have been shared on news programs and in magazines and newspapers around the world. For more on Nick, take a look at his editor's page.
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