Boom towns are springing up in the vast grasslands of this frontier landscape. Transportation is woefully inadequate and the iron horse, the railroad, is king. Makeshift labor camps have been established, the men toiling long days and then seeking diversion of the usual kind, arranged by the entrepreneurs who have been drawn to this long forgotten wilderness. This is not, however, the steppes of Mongolia but the Great Plains in the sovereign state of North Dakota, one of the states of the United States of America and the homeland of Infrastructure Journal editor John Kjorstad.

While these images may evoke the American Wild West of the nineteenth century, this is not a historical portrait. It is happening now, the result of the oil boom in the Bakken region, a principal economic driver of the US economic recovery and a place ripe for significant infrastructure development and investment but also with risks not usually taken by traditional infrastructure investors.

The Bakken play is not primarily about shale gas, although there is plenty of that. Much of the gas is flared for now, glowing brighter at night than the City of Chicago when viewed from space. It's about tight oil, horizontally drilled. Geologists’ estimates of the oil contained in this ancient rock formation vary wildly from 2 to 24 billion barrels. Current production has surpassed 800,000 barrels per day, about a twenty-fold increase since 2008. This makes North Dakota already about as significant as Oman as a producer in the global economy with much more to come, but without international trade issues for US consumption. In the meantime, with access to markets on both coasts and the gulf, by pipe and rail, the Bakken is a powerful economic engine and the industry and the region scream for development to support this growth, directly and indirectly.

“The Bakken play is not primarily about shale gas, although there is plenty of that...It's about tight oil, horizontally drilled.”

What is needed? Everything. Roads, rails and pipelines to carry more oil to market and bring in drilling equipment and materials. Accommodations of every variety. Municipal services such as water, sewer and power. Airport expansions, school and hospital expansions and every other form of social infrastructure to serve the growing population. In short, everything a frontier infrastructure market needs. This is a Texas-size bonanza of opportunities. Think Houston growing from a cow town to the fourth largest city in the United States, also fuelled by an oil boom.

Global infrastructure investors will be wary of news of a new US emerging market. It was just six years ago that the international infrastructure market was romanced by the promise of a US size emerging market in PPP development. Many European and Australian professionals who were drawn to the United States have since returned. Nevertheless, the demand for infrastructure around the Bakken is already huge and, by all estimates, still in its early stages. This was a US market that truly emerged in 2007 – around the same time that the shale gas boom got underway.

“Global infrastructure investors will be wary of news of a new US emerging market. It was just six years ago that the international infrastructure market was romanced by the promise of a US size emerging market in PPP development.”

The Bakken region has many of the risks typical of a frontier market. Moreover, there is the overriding concern that this relatively expensive form of oil extraction is entirely at risk if demand were to dramatically fall or global oil prices were to shift down significantly for any other reason. I recently chatted with one of the world’s leading oil traders about the energy market risk to the Bakken region. He is an unqualified bull on Bakken. First, he is making a case at his firm to place a major bet on US$250 per barrel oil in a short number of years. He bases this on what he sees as an unprecedented oil scarcity at this time and nothing (not even multiple Bakkens) that will eliminate that. “Not enough lithium in the world to meaningful replace internal combustion cars. The only risk to petrol demand is natural gas vehicles which will require massive investments to happen on a large scale. Were that to occur, gas prices would rise which would justify the development of additional pipeline infrastructure to utilize all the gas currently being flared and more that can be extracted with fracking which is already growing in the Bakken as fast as the oil extraction.” In short, no end in sight for growth in the region.

How will all this play out for infrastructure development beyond energy? Like every other frontier market, the government must take a bigger role. Under the US federal system, infrastructure is generally a state prerogative so watch Bismarck, the state capital, not Washington D.C., for indications of direction. In the meantime, those more intrepid among the infrastructure community will find many ways into this market now and fortunes will undoubtedly be made. I recommend watching (or re-watching) Elizabeth Taylor, James Dean and Rock Hudson in Giant, the 1956 Hollywood classic about, among other themes, the oil boom in Texas to put one in the right head for thinking about Bakken. If nothing else, it’s a good film.