[WRE ADVISOR | BUSINESS] BOOMTOWN!
The best and worst of the shale oil rush in Williston, North Dakota
BY JOE NOLAN I
n 2012, North Dakota overtook Alaska to become the number two oil producer in the United States. T is black wave from North Dakota has lifted the production of the U.S. oil industry to its highest numbers in 15 years, and, at this rate, America is poised to take back its spot as the world’s top energy producer within the next fi ve years. Of course, this isn’t the fi rst time that North Dakota has
had an oil rush. During the 1970’s and 1980’s the state and it’s Bakken formation oil reserves captured the attention of the industry at a time when prices were on the rise. However, despite the enthusiasm and the profi ts, the vast sums of oil available in North Dakota remained tantalizingly out of reach until 2008. T e dawn of rock fracturing renewed interest in the Bakken oil and sent the industry clamoring to places like Williston, North Dakota – everyone anxious to be the fi rst drill in the dirt. Whether you call the process fracturing or fracking this brand new technology is actually a novel combination of older techniques that can force oil and natural gas from the shale formations where they’re trapped using a high-pressure wash of water, sand and chemicals. T e process of fracking and its impact on the environment
remains a highly controversial topic, but what’s not in dispute are the spiking production numbers and the economic impact of the shale oil boom on the state of North Dakota. At 3.2 %, North Dakota boasts the lowest unemployment rate in the country. Of course, one could argue that the state’s relatively small population makes that target easier to hit, and not too long ago that might have been a point that would stick – but not anymore. Michael Hughes is the branch manager at Howard Supply Company in Williston. Howard Supply is a commercial and industrial mining, and oil fi eld supply house. Hughes was in Williston when everything changed. “Business picked up in 2008 and in 2009 it tapered off – but, it didn’t stop and drop,” says Hughes. “By the end of 2010, the beginning of 2011, it skyrocketed.” T e resulting rush of money, industry and masses of people turned the city and the region upside down. “When I fi rst moved up it had a population of 12-15,000
people,” says Hughes. “People traced their roots back for 100’s of years. You’d go to family reunions and they’d have their
74 MAY-JUNE 2013 WIRE ROPE EXCHANGE
manifesto from when their family came over from Norway. T e population is probably now pushing 45,000 in a matter of a couple years.” T is sudden, massive population increase has pushed Williston’s limited retail market to the breaking point – crowded stores and empty shelves are the norm, and some unscrupulous storeowners have been known to use shortages to their advantage. “I’ve seen people gouge,” says Hughes. “I’ve heard about
it. T ere is a lot of gouging going on.” In fact, it’s Howard Supply Company’s anti-gouging pricing policies that have helped them build a reputation as a business that’s looking past the boom in an eff ort to be a long-term industry player in Williston. “At Howard Supply Company the same item costs the
same in Texas as it does here,” says Hughes. But, it’s not only the price of products that’s gone up in Williston. Along with the tripling of the population, there has been a massive spike in the price of land along with the cost of rentals, and it’s common to hear stories about people living out of their cars while they struggle to fi nd available – let alone aff ordable – housing. CNN Money ran a story about the Walmart parking
lot in Williston. T e spot has become a kind of refugee camp for would-be workers from a number of industries who’ve made their way to North Dakota to fi nd work. Matt from Minnesota was a truck driver until the company that employed him shut down in 2009. He started working in a Walmart for $7.50 an hour before transferring to Williston where he makes twice that and still can’t fi nd a roof to live under. Matt moved to town with his friend Colby, an unemployed construction worker who found work at the Williston Walmart’s Tire Lube Express. T e pair live in an RV in the parking lot of the 24-hour store, occasionally buying small items and saving the receipts, just in case they are harassed by local police – shopping is not a crime. A young Michigander named James Cameron works 70 – 100 hours a week at an oil refi ning company, earning $15 an hour and getting plenty of overtime. He was kicked out of the Walmart lot and now sleeps in his car on a side street near his job. Stories like Matt, Cory and James’ are partly motivated by the hard times being experienced in America by the working
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