Oil prices are at a five-year low and oil companies are cutting spending. Falling prices are expected to slow production in western North Dakota's Bakken oil fields and put the squeeze on some companies.
But no one's expecting producers to start pulling out.
Companies in the Bakken have spent millions of dollars in the current boom on new technology and techniques like horizontal drilling and fracking that bring crude out of the ground in new ways. Some experts believe those sunken costs — a single well can cost $10 million — will be enough to keep the Bakken from busting.
"Nobody's going to shut down wells, at least not at $48" a barrel, said North Dakota Petroleum Council President Ron Ness. "You get a little lower and you might start thinking, 'Well, let's see, do I want to produce this oil today at $25'? But you still have to service your debt. You've got to remember that, you've got to service your debt."
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Some oil companies are already cutting exploration investment, though. Ness said he expects 25 to 30 percent fewer new wells drilled in North Dakota in the first quarter of next year.
David Flynn, director of the Bureau of Business and Economic Research at the University of North Dakota, sees the next year or two as a needed correction for the North Dakota economy.
"I don't see it as a bust at all," he said. "Think of it as an ability to finally reach an equilibrium. You've had shock after shock after shock hitting the labor market in North Dakota."
The demand for energy jobs has slowed growth in other sectors of the economy, from construction to agriculture, he said. A slowdown might also enable the state to catch up on infrastructure like housing and roads, he added.
The long-term effect on the Bakken depends on how low oil goes. U.S. crude for January delivery settled at $63.82 a barrel in New York on Tuesday.
"Forty dollars a barrel you start to get into the question of if it's even worth it to get it out of the ground," said Flynn. "Between $40 and $70 there's still profit if you've already sunk the well. But $40 is another one of those points where you have to start to worry about that."
Most oil companies carry a lot of debt, so if prices fall too low, many will be in trouble. Many smaller oil industry service companies that support drilling and fracking operations also carry a big debt load because they grew rapidly to keep up with the oil boom.
"There's going to be some opportunities for companies to gobble up the assets of others who do not have the financial strength," said Ness, adding that his biggest worry is that banks and outside investors will abandon companies working in the Bakken.
"It's going to be an interesting time," he said. "At the end of the day, I think most of your producers think they're going to be able to maintain a flat growth."