ND Oil Boom Brings Jobs And Concerns

Details: Category: Oil Industry News; Created on Sunday, 20 November 2011 09:53; Written by Justin Christianson; Hits: 498

Courtesy Of Larry Oakes - Minneapolis Star Tribune

WILLISTON, N.D. - School bus driver Barb Russell heard there was good money to be made here in the oil fields of North Dakota, so she locked her home in Farmington, Minn., and headed west in September. The 60-year-old tripled her income by driving a bus full of workers to drilling rigs in a place where trucks roar nonstop and everybody who wants a job has one.

Finding somewhere to lay your head is another matter. Russell lives in one of the dormitory-style "man camps" that have sprung up to help house the influx of an estimated 35,000 workers.

"I wish 'em the best on getting housing for everybody, especially with winter coming," Russell said.
There's no place like it anywhere else in America.

New drilling technology has freed up vast reserves of oil in the Williston Basin of western North Dakota, fueling an economic bonanza. As most of the country desperately tries to skirt a double-dip recession, North Dakota boasts a $1 billion budget surplus and the nation's lowest unemployment rate. Recruits from Minnesota, Texas and both coasts keep arriving, reversing a long population decline. Schools are rushing to hire more teachers. Towns are adding more cops.

Almost 200 drilling rigs are boring 100 new wells a month. The state's recent figures show 16,435 job openings, 48 percent more than a year ago.

But so many workers have flooded the oil patch that many long-time residents and officials are beginning to complain about too much rapid growth.

In a region burned twice by oil booms that went bust, memories run deep. Towns such as Williston are trying to foster roots for workers, many of whom have no intention of settling in North Dakota, while figuring out how long this boom could last. It takes up to 100 workers to drill and prepare a well, but only one to operate it once it's producing.

"We got caught off-guard, thinking this would be another blip on the radar screen," said Williston dentist, umpire and sports announcer Ron Seeley. "We need schools, roads and housing."

On a butte southeast of town, overlooking the Missouri River, Kodiak Oil and Gas is drilling a new well, Koala.

The 170-foot tall drill rig is one of 195 operating in western North Dakota, compared to 107 in early 2010. That was when Denver-based Kodiak asked oilman Jerry Myers to open a branch office in his hometown of Dickinson, N.D. He's helping Kodiak tap a share of the oil in the vast "Bakken" formation two miles into the Earth's crust.

"The oil industry is runnin' and gunnin,'" Myers said.

Prospectors first discovered oil in the Bakken in 1951, but the layer of oil-bearing rock is thin, and early vertical wells didn't produce much. Smaller booms in the 1950s and late 1970s-early '80s petered out when oil prices fell.

But around 2005, new advances in precision horizontal drilling and multistage hydraulic fracturing, or "fracking," changed everything. The new techniques make nearly 100 percent of new wells productive. North Dakota went from producing 110,000 barrels of oil a day in the fall of 2006 to 444,000 barrels a day today. It is expected to pass California and Alaska to become the second-highest oil-producing state, behind Texas.

Experts say the industry could conceivably pump between 4 billion and 24 billion barrels of oil out of the Bakken, which also extends into Montana and Canada. They say there appears to be enough oil to support drilling 48,000 more wells in North Dakota during the next 20 years.

Officials estimate up to 20,000 workers live in temporary cities known as man camps or crew camps, scattered across 17 counties.

One of the largest, Bear Paw, houses nearly 1,000 people, 15 percent of them women, just north of Williston.

But Bear Paw and other camps have strained roads, water and sewage systems. Last spring, the Williston wastewater treatment system reached capacity. Now trucks haul 36,000 gallons of sewage daily from Bear Paw to Minot, 126 miles away while another treatment facility gets built.

Williston's population grew from 12,500 to around 20,000 in the past five years. Housing and rental prices have doubled.

"There are people living in basements, in campers, in back yards," Mayor Ward Koeser said. "... It's wild and crazy."

If drilling continues as projected, western North Dakota will have 45,000 wells within two decades, each with a life expectancy of 30 years or more, supporting 45,000 long-term jobs. That's in one corner of a state with 647,000 people.

It would mean not only growth but change. It means dealing with environmental concerns about wasting natural gas and the effects of so much fracking.

Williston is adding 20 public employees this year, including six police officers. Police calls jumped from 6,500 in 2009 to 16,000 last year. The school district added 28 teachers and 10 prefabricated classrooms this year to handle the 25 percent increase in students in the past two years.

"I can't keep a janitor because they all want to go work in the oil fields," said schools Superintendent Viola LaFontaine.

Public officials say they need more of the extraction taxes that oil companies pay the state: 11.5 percent on every barrel, currently more than $1 billion a year.

"Eighty-eight percent of that money stays with the state," Koeser said. "We need a lot more money out here to deal with the impacts."

(Contact Larry Oakes at loakes(at)startribune.com.)

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