A Rebuttal For That John Oliver Skit About The North Dakota Oil Boom
Which would be ok if Oliver were merely a comedian. An entertainer out for laughs. But for many people entertainers John Oliver and the now-retired Jon Stewart are valid news reporters.
And that’s when this stuff becomes problematic.
“It was everything you expected it to be,” a North Dakota-based reporter told me last night after Oliver’s broadcast. “It’s all old news. Everything he cited is from 2014 earlier. Even as far back as 2011. You can’t condense 6 years worth of a story into 15 minutes.”
That seems like truth to me. Here’s a rebuttal for some of the major themes of Oliver’s skit.
Oil worker deaths
“He’s making North Dakota sound like a magical pro-business utopia, like Willy Wonka’s chocolate factory, which, come to think of it, had about the same safety record as North Dakota’s oil fields,” Oliver said of Governor Jack Dalrymple, talking about oil worker deaths (because oil worker deaths are funny, I guess?). And certainly if you look at the raw numbers of deaths – a dozen in 2014 , up from two in 2008 – the increase is ugly. But in the context of increased oil development? The trend is actually flat (see chart to the right).
Which isn’t to belittle the importance of worker safety. Both the state and the industry should be striving to improve safety all the time. But using raw worker death statistics without the context for the ramp up in industry activity is hugely misleading.
If I started a car factory in a state where no car factories existed before, and the one person died during an accident at my factory, you could point to a huge increase in the amount of car factory deaths in that state. Except, before there were zero deaths because there was zero activity.
That’s kind of what’s going on when Oliver and company talk about oil worker deaths increasing.
The rate of oil spills is actually down
Oliver uses numbers from the New York Times to criticize the number of oil-related spills in the state, but the Times used seriously misleading numbers. “[A]ll told, the number of wells is up 200 percent and spills 650 percent since 2004,” the paper reported, but it isn’t accurate. That metric might serve the cause of hysterical headlines from Pulitzer-grasping reporters, but it tells us very little about the situation on the ground because oil wells do not produce uniform amounts of oil.
You cannot use spills-per-well as a valid metric for environmental safety in North Dakota any more than you can use traffic-accidents-per-driver to measure road safety. Because some licensed drivers put on a great deal of miles, while others put on very few. That’s why traffic safety experts measure accidents and fatalities in terms of vehicle miles traveled in order to avoid bad data. That’s also why the New York Times should have used a different metric.
Spills should be measured as a rate of oil produced.
According to the Energy Information Administration, from 2004 to 2013 the amount of oil produced in North Dakota increased 908 percent. “This means that the number of spills per barrel of oil produced actually went down by 25.6%–using the Times own figures for spills,” writes Pablo Zarate for Energy In Depth, an oil industry publication.
Suspending oil industry fines is good policy
Oliver also took at North Dakota’s practice of suspending fines for oil companies that spill. This has long been a bone of contention among leftist critics of the state’s handling of oil and gas activity, but it’s not a fair one. Where they see state regulators giving violators a break, the reality is the state using fines as leverage to fix problem.
We can see an example of why that’s a good thing in Tesoro’s handling of a massive pipeline oil spill near Tioga. “The relationship between Tesoro and their consultants and subcontractors and the landowners is one of the best I’ve ever dealt with,” Bill Suess, a spill investigator for the state, said last month.
“It’ll go back to as good if not better condition,” Wayne Nelson, one of the co-owners of the impacted land, said as well.
But that sort of cooperation doesn’t necessarily just happen. What incentivizes that level of cooperation and responsiveness to fix the problem is the fact that North Dakota has suspended the fine for the pipeline spill so far. The ultimate amount of the fine will be based on how well Tesoro finishes the clean up.
“Tesoro has been very responsive in getting to the cleanup, even though it’s costing them a lot of money,” Dave Glatt of the North Dakota Department of Health said. “They’ve been committed to getting it cleaned up and bringing in more help as needed.”
This isn’t to say that Tesoro wouldn’t be putting every effort into making this situation right even if they didn’t have the incentive of a reduced fine, but it sure helps doesn’t it? And what’s really the goal here? Is it to maximize the fines we levy against oil companies? Or is it to fix the mistake and put the land back the way it was?
The advocates of an adversarial relationship between government and industry no doubt prefer the former. I think the more pragmatic among us prefer the latter.
Where leftists like Oliver and Democrats here in North Dakota see a too-cozy relationship between the state’s Republican leadership and the oil and gas industry, I think a majority of North Dakota voters see a common sense relationship that’s based more on getting the right outcome than exercising ideological vendettas.
If North Dakotans, who actually live here amid the oil and gas activity, saw things the way Oliver does then Democrat Ryan Taylor would be governor right now and Democrats would likely control the state Legislature. But they don’t, because they do actually live here, and they aren’t seeing oil and gas activity in the state through the lens of the New York Times.