Dakonomics: Part 3

By Rachel Leingang
Contributing Writer

The much-publicized oil boom in the western part of North Dakota has brought with it a billion-dollar surplus and an ever-expanding discussion of what the next move should be.
“The energy economy is more like a gold rush than it is an organized development,” said Bill Patrie, executive director of Common Enterprise Development Cooperative in Mandan. “Because of the extensive amounts of oil in the Baaken formation, the speculators and true energy developers are here, and it’s driving everything else –housing, construction, road building and repair.”
All of the wealth that resides in the Baaken and Three Forks formation in western North Dakota is enticing to those looking to make significant money at jobs ranging from dangerous to mundane.
Peter Sinclair, a 23-year-old Williston native, moved back to his hometown in May to work in the oil fields.
“I am a roustabout. It’s a more glamorous way to say we do what the big oil companies tell us to do. I’m sort of a heavy-duty plumber that works with 2-4 inch diameter steel pipes. Compared to other oil field jobs out there, it’s pretty safe. The few minor injuries I’ve gotten were from not paying attention and making a stupid avoidable mistake. Probably the most dangerous part of our job is working on tops of the tanks. The tanks are roughly 30 feet tall with slightly inclined tops, which get real slippery when snowy.”
Sinclair was working as an assistant manager at a Subway in Fargo when he decided to make a change and get more money in the bank.
“I decided to put school on hold a while longer after I saw that first paycheck,” he said. “As long as the oil boom is going, it’ll keep padding my wallet so there isn’t much incentive to go anywhere else where I would likely have to find a lower-paying job. Some of the major issues associated with the lack of a development plan in oil boom areas are a lack of housing, damages to roads, burdens on the education system and an increase in crime.
“The first priority is making sure that you’ve got roads,” said A.L. “Bud” Johnson, an oil expert with over 33 years of experience in the oil industry. “Make them stronger, because I’m sure the equipment will get bigger. If the roads fall into too much disrepair, it’s going to inhibit the general business operations and it’s really going to have a bad effect on their ability to fracture those underground formations.”
Part of the problem with addressing the issues in the Baaken lies with state legislators.
“The legislature in good economic times like we’ve had the last number of years don’t have to be as good of legislators as those who’ve had to preside during lean times and had to make hard choices,” Patrie said. “I wouldn’t give them high grades for the decisions they’ve made. I think that they’re a little less thoughtful than they used to be. Part of the change has been due to the extreme monolithic control of one party that there hasn’t really been a debate of priorities.”
Meanwhile, populations in oil cities like Williston have exploded.
“Almost everywhere you look there is construction,” Sinclair said. “New streets being built, with houses going up as fast as they can build them. New apartments. New hotels. New restaurants. New people. Drive down main street and you will see license plates from at least 6 different states every time.”
With this population boom comes a lack of proper housing for the influx of workers. While Halliburton has tried to address the problem by bringing in a housing complex that was a part of Vancouver’s Olympic village, it only can house up to 300 workers, which is doesn’t solve the problem.
“One of the most noticeable problems is homelessness, not because they can’t afford it, but because there are not homes to buy,” Sinclair said. “Walmart’s parking lot has permanent residents in campers. There are man camps. Before winter hit, there was ‘Tent City.’ People came up to work, found out there wasn’t anywhere to rent or buy, so they bought tents and camped out in a local park. They had to be cleared out in November due to weather, though. It would just be too dangerous to try camp out in winter conditions.”
Johnson and Patrie are looking for more long-term solutions to problems in the Baaken. “The big thing is, if you’re looking at a potential upside of a million barrels (of oil) a day, somebody ought to be figuring out what the state’s slice of the pie is and then figure out how to allocate it intelligently,” Johnson said. “Nobody’s going to get it done perfect, but it’s best that you take some steps in the right direction with roads, schools and property taxes.”
Patrie looks beyond simple legislation and thinks North Dakota needs to pursue ways of refining the crude oil into a final product.
“The drilling rigs, land surveyors, leasers – those jobs are going to be gone,” Patrie said. “What we need is refining and the utilization of energy here, rather than just being a commodity broker. None of that wealth is captured here. We need to have more public interest in adding value to our minerals and natural resources, like a state-sponsored, state-owned or partially owned refinery. I think that makes a great deal of sense so that we’re selling higher values than just crude oil.”
The budget surplus, while it poses problems for public policy, makes the state look at issues of importance and address them before they get more out of hand.
“It’s a wonderful burden to have,” Johnson said. “The policy implications are staggering. There’s so many things you can do if you have money. It’d be nice if they sit down, scratch their heads, and think, ‘If we’re statesmen, we need to be looking down the road and not tripping over the coffee table right in front of us.’”
While legislators work to combat the larger problems, Sinclair is trying to solve one of his own: finding an apartment.
“This is my home town and my parents live here so they let me move back in,” he said. “However, I’ve been looking for a place since May when I moved here to no avail. I do think this will play a major factor in how long I stay.”
And though he likes having new people to meet in town and seeing different faces, there is a visible increase in crime.
“There have been multiple stabbings, and a murder-suicide,” Sinclair said. “And the most ridiculous thing, someone shot a urinal. I don’t ever remember anything so serious before the boom. Not even a shot urinal.”
With the number of wells and rigs increasing monthly, these problems cannot be swept under a rug and should be addressed as soon as possible.
“If you’re talking about 21,000 more wells at about 1,000 per year, that’s 21 years, at the very least 15 more years,” Johnson said. “It probably will be tapering off at about 15 years. How do we get our house in order?”
Patrie thinks that this budget surplus is a wonderful thing, “but I think it’s accidental. I don’t think it’s the result of prudent planning by legislators or executives.”
Since a lack of planning before the oil boom led to some unforeseen issues, prudent planning for the future can help to solve the current problems facing oil development in North Dakota.

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