There’s no recession in Curt Schaefer’s world.
No time, either. Especially since last summer, when Minot [N.D.] Lumber & Hardware’s usual steady growth of 8% to 14% a year exploded, increasing 68% over 2010’s revenue.
“We didn’t have enough of anything—of people, equipment, or inventory,” says Schaefer, Minot Lumber’s manager. “We just hired two outside sales reps over the phone, one from Florida and one from Washington state. There is just no one locally we could find.”
The scenario is the same for other dealers living over the Bakken Formation, the largest petroleum deposit in the lower 48. The U.S. Geological Survey estimates that Bakken’s 200,000 square miles, which span parts of Montana, North Dakota and Saskatchewan, hold 4.3 billion barrels of oil, reserves that could keep oil companies busy for decades. Some oil industry experts say that figure is too low.
Since 2008, when the oil companies started hydrofracturing (better known as “fracking”) to capture oil that lies deep within Bakken’s layers of shale, workers have flooded into northwestern North Dakota, bringing huge changes to a state whose population numbers had remained virtually unchanged for the past 100 years.
For all that those changes have rocked its operations, Minot Lumber isn’t even near the epicenter of activity. That would be 125 miles west in Williston, the seat of Williams County near the Montana border, where the county’s 24,374 permanent residents now are dealing with 10,000 oil field and service industry workers sleeping in “man camps” (temporary housing for oil field laborers), RVs, campers, or even in cars in Walmart’s parking lot.
In 2008, Williston officials approved construction of no more than 10 housing units. Last year, they issued permits for 2,131 single-family homes, rental apartments, manufactured homes, and hotel units.
The vast influx of men and machinery has transformed the landscape and the lifestyle of the towns and cities in northwestern North Dakota. Develop-ments are being built before the streets are laid out, so pressing is the need to house laborers. Salaries, land values, and rents have skyrocketed.
You can drive any street and there is a help wanted sign. Truck drivers and oil field laborers can pull in $80,000 or even $100,000 a year, even though they might be living two to a room in temporary housing out in the middle of nowhere, while in towns like Minot and Williston, service workers at fast food joints get paid up to $15 an hour to flip burgers.
“Walmart is chronically understaffed,” Schaefer says. “You just get used to waiting in line. Some of the fast food places actually close their dining areas during certain times of the day, because they don’t have the staff to maintain it.” And there are always waiting lines for restaurants, bars, and movie theaters.
In Minot, city lots that cost $25,000 to $30,000 in 2005 now go for $60,000 to $80,000 or more, says Steve Heidrich, manager of Minot’s Muus Lumber & Hardware. A three-bedroom apartment that rented for $400 a month before the boom now commands $1,200 to $1,600. “I’ve heard companies like Hess [Petroleum Corp.] have rented out whole hotels for the next three years for their employees,” Heidrich says.
It’s a similar story 140 miles southwest of Minot in Dickinson, where finding skilled labor is a thing of the past. “I probably had 75 applicants when I put a help wanted sign put out front,” says Troy Bosch of Bosch Lumber, “but a lot had no high school degree or had criminal records.”
As roustabouts have flooded into western North Dakota to earn big money in the oil fields, locals have seen an uptick in crime in their towns and cities, including domestic abuse. Last year, the number of criminal incidents reported to the Williston Police Department nearly tripled to 16,495, according to a recent article by CNN.
Roads in western North Dakota “are beat all to hell,” says Wayne Briggs, president of Crane Johnson Lumber, which is headquartered in Fargo on the state’s eastern border and is opening a location just outside Minot. There are up to 9,000 trucks a day running through Alexandria township, 40 miles due west of Minot, says Briggs.
Most trucks traversing Bakken are hauling water used in the fracking process, but some were sent by dealers based as far away as Washington State. Mead Lumber has shipped building materials from its Cheyenne, Wyo., yard to Williston, 584 miles to the north, according to Craig Bradshaw, Mead’s president. So has Kalispell, Mont.-based Western Building Center (WBC), says company president Doug Shanks. Kalispell is 563 miles west of Williston.
The high cost of freight plus the state of the roadways make moving goods a tough proposition. “LP doubled its rates to North Dakota last year,” Schaefer says, “and Ainsworth wouldn’t even give us a quote to North Dakota last winter.”