His visit to North Dakota's oil fields is for the purpose of gathering information on economic conditions and learning more about the opportunities and challenges of the Bakken. Narayana Kocherlakota, president of the Federal Reserve Bank of Minneapolis, arrived in Minot yesterday.
As president of the Ninth District, the second largest district in the Federal Reserve, Kocherlakota hopes to deliver to policy makers in Washington, D.C. "a better feel for the wide range of economic experiences that are taking place across the country." The bullseye of furious economic activity centered on the Bakken, says Kocherlakota, is unmatched anywhere.
"The reports that come out of here are unusual to anything that's going on in the U.S. right now and, really, in the developed world," stated Kocherlakota.
Kocherlakota's visiting delegation includes Mary Brainerd, chairman of the Ninth District Board of Directors, and additional members of the board. Today they are scheduled to tour some of the most impacted communities in the Bakken - New Town, Stanley, Tioga and Williston.
"The reports from North Dakota are different from everyone else's. It's a learning trip," said Brainerd. "It is a really good thing to have the folks from the Fed out in the community, on the ground and learning what's happening."
"I'm particularly interested in understanding the labor market conditions in this area and how it differs from the rest of the country and even within relatively small areas," added Kocherlakota.
It is not Kocherlakota's first visit to the Bakken. Despite being Ninth District president for less than three years, it is his second trip to the booming oil fields of the west. A previous trip saw him visiting Helena and Sidney, Mont. and Williston.
When asked if the current boom has staying power, Kocherlakota responded, "China and India will definitely be demanding more oil down the road. How that race turns out is hard to predict. I don't have any deep insights to that. It will be a long run race over the next 10 to 20 years."
Kocherlakota emphasized that, with any commodity, the race is between technology and demand. He said he hesitates to give an answer on the relationship between the price of oil and the amount of activity in the Bakken, saying only that the cutoff would come when oil prices get so low that it would be inefficient to extract oil from shale formations with existing technology.
"General news for the district now is that things are getting better and that they are even more better in North Dakota than the rest of the district," stated Kocherlakota. "Obviously this is a very exciting time in terms of opportunities, an example of what happens when technological discoveries really enhance a way of life."
Kocherlakota and Brainerd addressed a gathering of business and community leaders at Minot's Holiday Inn Riverside last night. They are scheduled to host a similar event in Williston tonight.