Investment In The Bakken

The other day I mentioned that venture capitalists from Wall Street, Connecticut, and Singapore come out to the Bakken, talk a good story about investing in the oil patch, then leave and never come back, unable to come up with an idea for investment in the western counties of North Dakota. The StarTrib talked about these venture capitalists/out-of-state investors.

My contention is that investing in the oil patch in North Dakota, a relatively small area in the western part of the state, essentially four counties, and three cities (Williston, Watford City, and Dickinson), is pretty much going to be limited to oil and gas industry and will come from within that sector. The most recent example was the announcement of a new midstream company, Oasis Midstream Services, a wholly-owned subsidiary of Oasis.

I was struggling to figure out where the Wall Street, Connecticut, and Singapore investors would do better, trying to capitalize on the Bakken.

A story in The Dickinson Press today answered that question. Interestingly enough, Carpe Diem featured a Minneapolis Fed study (easily accessible in the Business Insider) that provides additional support.

The problem with the western counties: lack of work force and lack of transportation infrastructure. The answer: Fargo and Grand Forks. Fargo at the intersection of two major freeways. Both cities with railroad and better air connections. [Update, May 12, 2013: actually, the best two cities: Fargo and Bismarck, followed by Minot and/or Grand Forks. If it weren't for Fargo, Grand Forks would definitely be ahead of Minot, but Fargo takes too much from Grand Forks, leaving Minot in contention for #3.]

Having just read the history of the Institute of Advanced Studies at Princeton (think Manhattan Project during WWII), outside investors coming to North Dakota to capitalize on the Bakken might do well to visit with the movers and shakers at the two universities along the Red River of the North.

Both Microsoft and McDonald's have large operations in Fargo, if I remember correctly. Software and french fries. Or maybe it's Grand Forks. Whatever.

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A Note To The Granddaughters

As noted earlier, I am in my information theory phase, having just completed George Dyson's Turing's Cathedral and James Gleick's The Information. I am now reading Inventing Los Alamos, by John Hunner.

After overseeing building the Pentagon, Colonel (and then soon after that, General) Leslie Groves was responsible for the Manhattan Project. He selected J. Robert Oppenheimer to run the Los Alamos facility.

Born in New York City on April 22, 1904, Oppenheimer went to Manhattan's Ethical Culture School and then to Harvard. In his third year at Harvard (where he graduated summa cum laude), Oppenheimer took six courses and audited foru more. The normal quota was five courses. ... After Harvard, Oppenheimer went to Cambridge in England and then, in 1927, on to Gottingen University in Germany, where he neglected to enroll. Three weeks after he finally did enroll at Gottingen, Oppenheimer received his Ph.D. He was just twenty-four years old. His Ph.D. thesis was a brilliant paper on quantum mechanics. Back in the United States in 1929, he received a dual appointment at the University of California at Berkeley and the California Institute of Technology in Pasadena as a professor of physics. During the summer breaks from his hectic travels between Pasadena and Berkeley, he vacationed at his cabin in the mountains of northern New Mexico. -- p. 20.

Hunner goes on:

Even though Oppenheimer was a theoretical physicist, other fields attracted his interest. At eleven, he joined the New York Mineralogical Society. The next youngest member was in his sixties. Fascinated by the Hindu religion, Oppenheimer taught himself Sanskrit (his eighth language) so he could translate its religious texts. Until 1936, he was apolitical, but then the Great Depression and the Spanish Civil War awakened his social consciousness. -- p. 20.