Built Up by Oil Boom, North Dakota Now Has an Emptier Feeling

Source: By JACK HEALY, New York Times • Posted: Monday, February 8, 2016

WILLISTON, N.D. — The “man camps” sprang up from the prairie, rows of trailers and modular steel boxes that housed thousands of workers chasing their fortunes in North Dakota’s oil fields. But these days, the man camps are missing something: men.

Roughly eight years ago, at the peak of the last recession, oil drilling began to transform these remote corners of the plains into an economic beacon, attracting billions of dollars in new investments and thousands of workers in search of good-paying jobs and an escape from America’s economic pain. But now, as oil prices have skidded to $30 a barrel, new drilling has dried up here, and the flood of wealth and workers is ebbing.

“You couldn’t find a place,” Brian Resh, 32, said, recalling the busy days one recent morning as he glanced across a nearly empty cafeteria of one of the area’s largest remaining man camps. “Two years ago, you’d drive at night at 3 a.m. and you’d see 300 people.”

Now, laid-off oil-field workers are piecing together new jobs, and some have left town. Hotels that were once booked solid for months are about half occupied. Some of the new luxury apartments built to handle the surge of arrivals are dark. Business is down by 40 percent at new brewery that once had two-hour dinner lines for cowboy-cut rib-eyes and Williston brownies (which come à la mode). And many of the camps built to house an influx of workers, the vast majority of them male, are emptying out like a bar after last call.

James Calier, an electrician for Tarpon Energy Services, had breakfast in the mostly empty cafeteria at the housing camp run by Target Logistics north of Williston, N.D. Credit Andrew Cullen for The New York Times 

It is hardly a bust — unemployment is low, and there are still plenty of help-wanted ads for the area — but the slowdown opens an uncertain second chapter for a place that has spent heavily on new roads, schools, hotels and developments over the past five years.

“We’re overbuilt,” said Marcus Jundt, a businessman who followed the boom to Williston and owns several restaurants here, including the Williston Brewing Company, the place that  serves the rib-eyes and brownies. “We have too many hotel rooms, too many apartments, too many restaurants. People are going to go broke. People are going to lose their jobs. It’s going to be painful.”

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The slowdown has hammered governments across North Dakota, forcing some to cut spending or dip into reserves. Williston expects $151 million in revenue this year, down about 23 percent from two years ago. Real estate prices have come down, giving a welcome break to many renters, but agents say there is a glut of about 300 to 400 homes for sale, with more being built. At the State Capitol, Gov. Jack Dalrymple last Monday ordered 4 percent budget cuts and tapped $497 million from a rainy-day fund to close a $1 billion budget shortfall.

Rural towns that spent the past years building, spending and taking on debt are now facing grim realities. Williston, for one, has taken on $215 million in debt, and governments around the region are spending to build infrastructure, including a sewer plant and recreation center for the growing population.

Some local officials, business owners and academics express optimism, saying the economy here is taking a breather after years of unsustainable growth.

“Those communities out there were drinking out of a fire hose,” said Nancy Hodur, a research assistant professor at North Dakota State University who has been studying the boom. “A lot of those communities would come right out and say that pace of growth isn’t good, isn’t sustainable. They’re still playing catch-up.”

Local leaders say they have faith that oil will rebound and fuel decades of economic opportunity. As evidence, they point to rising school enrollments across the Bakken oil patch and rising population numbers statewide. New neighborhoods are filling up with full-time residents, recent arrivals who seem to represent a vote of confidence in the staying power of an oil-based economy that also offers a paradise for hunters and anglers.

Teenagers playing hockey on a frozen pond in the middle of a housing development in Williston. CreditAndrew Cullen for The New York Times 

“We know where the oil is,” said Howard Klug, the mayor of Williston. “It’s like money in the bank. It’s just sitting there.”

Cindy Sanford, who oversees Williston’s job-services center, also sees the bright side. Yes, drilling is down and oil workers have been laid off. But Ms. Sanford pointed out that hundreds of local jobs are posted on North Dakota’s jobs website, which estimated there were still five open jobs for every three people looking for work.

“It sounds like we’re a ghost town, and we’re not,” Ms. Sanford said. “Name a job, and I can pull it up.”

North Dakota’s unemployment rate is still an enviable 2.7 percent, and the jobless rate is even lower here in Williams County — 2.2 percent, up a percentage point from a year ago.

Camps like the Bear Paw Lodge or Black Gold reflected the allure and growing pains of an oil rush that overwhelmed the housing supply and infrastructure to the point that people camped in parking lots and homes rented for big-city prices — $3,000 or more. Many camps had their own security and strict rules against alcohol and drugs, as well as maids, fitness centers, high-thread-count sheets and 24-hour meal service.

But now, about 50 miles from here, Capital Lodge in Tioga, built for 2,000 workers, is a fenced-off ghost town. About 130 miles away in Dickinson, a 600-bed camp had dwindled to 30 guests when its owners shut it down for the winter.

In Williston, where the population soared to more than 40,000 at the height of the drilling frenzy from 12,000 before, local leaders ordered the remaining man camps to close by the summer.

Oil pump jacks near Alexander, N.D. As oil prices have dropped, new drilling has dried up here. CreditAndrew Cullen for The New York Times 

In the half-empty cafeteria of one camp operated by Target Logistics just north of Williston, electrical workers and pipe specialists were starting and ending their 12-hour shifts over a breakfast of eggs, sausage, and coffee as thick and black as crude oil one morning.

They talked about how many drilling rigs were operating (46 across the state, compared with 190 two years ago), their falling overtime pay and friends who had gone elsewhere for work.

“If you get fired tomorrow, you get fired,” said Scott Benson, 32, an electrical worker who was heading out to make sure compressor parts did not freeze over in the bitter cold. “Just calm down and go to work.”

To Mr. Klug, the mayor, closing the man camps was a step toward becoming a town where workers stayed and raised families, rather than flying home to Texas or Colorado or Louisiana. “I don’t think Williston needs to be a temporary town anymore,” he said.

But the promise of ready work is fading for some. At the Fox Run R.V. park north of town, Reid Thibodeaux has been living out of a trailer given to him by a friend. He came up from Lafayette, La., on a bus 16 months ago and quickly found work encasing newly drilled wells.

He lost his job in December, and with few new holes being punched in the ground, he said he was on the verge of abandoning his $800 monthly rent and returning to his 13-year-old son in Louisiana. The empty lots around his trailer suggest others have already made that decision.

Yet newcomers are still arriving. Jerry Mallett left his home in Mississippi to chase a dream of high-paying work driving trucks out here, but by the time he got to Williston — the center of it all — the boom was going slack.

“I wish I’d come a couple years ago,” Mr. Mallett, 60, said one afternoon as he sat at a hiring center, waiting to hear about a job hauling sand and water to fracking sites. “I wouldn’t be broke.”