The lessons behind the North Dakota miracle

The state's economy has proved profoundly resilient. While the rest of the country is still mired in recession, the Roughrider State has built up a $1 billion budget surplus, added tens of thousands of jobs and cut unemployment to just 3.5 percent — the nation's lowest rate.

The question of what's driving this success matters, because the North Dakota miracle is replicable elsewhere.

The key reason for the state's stunning economic rise is its energy sector. North Dakota is blessed with massive oil reserves. But these resources had to be coupled with smart policymaking. North Dakota's public officials consciously cultivated a regulatory environment friendly to energy investment. Digging into the details of what state lawmakers did, and of the astonishing harvest they've reaped as a result, reveals a blueprint other resource-rich states can follow to cash in on their natural bounty and kick-start their economies.

For most of the past century, much of the oil discovered in North Dakota was effectively unreachable. Notably, the estimated 24 billion barrels buried in the Bakken formation — a 25,000-square-mile hunk of rock running under the northern tip of the American Great Plains — is encased by hard shale that was impenetrable to older extraction tools.