Indicative of the capital spending of the oil industry in this region, I focused on the efforts of two of the oil industry's biggest players, Hess ( HES) and Halliburton ( HAL). Hess and Halliburton have built, or are building, major office buildings and equipment yards in what had been dusty farm towns, as they add capacity to their oil production capacity in the area. Hess has earmarked almost $5 billion in capital expenditures for the Bakken region alone in the past two years. It budgeted $1.8 billion for Bakken capital in 2011 and recently bumped its 2012 outlook to $3 billion. Hess is in the proces of doubling the capacity of a gas production plant in Tioga, North Dakota, in the middle of the Bakken field, where it has also just completed a sparkling new regional headquarters building. And it recently got government approval to build a 430-mile pipeline that will bring ethane, which is produced from natural gas that comes along with crude oil from the wells, north to Calgary, Alberta Canada. Hess also has about 900,000 acres under lease in the area, making it one of the largest exploration companies in the region. Hess is also expanding its shipping capacity by expanding an existing rail loading facility. It has nine "train sets" or unit trains comprised of engines and hundreds of tank cars in the area, which provide it the capacity to ship 54,000 barrels a day out of the region and to refineries. Hess executives said in a conference call early this year that "net production from the Bakken in 2012 was forecast to average 60,000 barrels of oil equivalent per day or twice the 2011 average of 30,000 barrels of oil equivalent per day. We expect net Bakken production to further increase to 120,000 barrels of oil equivalent per day in 2015." Three years ago, Hess' Bakken production averaged only 15,000 barrels of oil per day. Halliburton, which earned more than three-quarters of its 2011 income in North America, and most of that from the Bakken, is such a big presence in the town that is in the center of the Bakken boom, Williston, that locals joke that they should rename it Halliburton. In addition to a huge new office building, repair and construction facilities and storage yards, Halliburton is building and buying residential real estate throughout the region to house its growing workforce. Halliburton, which says it is "the leading service provider in the Bakken with more people and capacity than any other provider," announced a year ago that it planned to add 11,000 new jobs in North America, and most of them in the Bakken region. This in a state with the nation's lowest unemployment rate of just under 3%. The national average is about 8.3%. Halliburton's heavy capital spending in North Ameica will hurt results in 2012, according to Morningstar. Customers switching from gas to oil production, "added pumping supply, and higher raw material costs, combined with logistical challenges from the higher levels of equipment needed for the new basins have placed pressure on crew utilization levels, prices, and supply chains. "As a result, we expect lower operating margins in North America in 2012" but that "some of these costs will be temporary, as the rig switching and associated cost challenges will be alleviated after the gas rig count bottoms in 2012."