In North Dakota, an oil boomtown doesn’t want to go bust

Reporting from WILLISTON, N.D. —  People loved to leave this town. Kids grew up and got out. Take me to Minot, they would say. To Fargo or Bismarck. Anywhere but this emptiness.

Then the boom began and the world came to them.

Young men arrived by the thousands seeking their fortunes in the Bakken formation, an abundant source of crude oil cracked open by hydraulic fracturing and soaring oil prices.

Yet while jobs were suddenly plentiful, there was almost nowhere to live — until the barren hillsides came alive with the man camps.

The oil industry’s answer to people pitching tents in downtown parks, the camps are mobile homes strung into instant shelters for workers flying in for two-week or three-week shifts. The charges for a clean room, hearty meal and hot shower are pulled directly out of a paycheck.

Now, after more than five flush years, oil prices are in a prolonged slump, the flow of workers has reversed, and the city is moving to close the camps.

It may be tempting to write off Williston as another boomtown heading for a bust, a story that has defined the American West, whether the resource was fur, gold or timber.

But Williston believes it can build something more enduring. The way city officials tell it, closing the camps is a show of faith in the future.

“It’s very difficult to build a sustainable community on man camps,” said Ward Koeser, who retired as mayor in 2014.

The city used its newfound wealth to build a $70-million high school, a $68-million recreation center, and new water and sewer systems. It renovated Main Street and created a city position for someone to write parking tickets. Highways have been widened, and an airport is under development.

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The biggest transformation may be in the city’s housing stock. As the population tripled to more than 36,000, developers built about 10,000 houses and apartments.

In time, some workers began bringing their families and making longer-term commitments.

“We came out here with like 250 bucks in our pockets, lived in a tent, and now we own a house,” said Emily Springer, 30, who moved from Minnesota in 2011 with her boyfriend. Now they are married. He works on an oil rig, and she works at the Riddle’s Jewelry store in a strip mall that opened last summer.

“I love Williston and I will forever be thankful for the opportunities presented to me here,” she said.

That is the future that city officials envision: a boomtown turned hometown.

But just as things seemed headed in the right direction, the price of a barrel of oil plummeted from more than $100 to less than $35. Drilling dropped off dramatically, with the number of rigs in operation falling from nearly 200 to fewer than 70 over the last year or so.

Fewer workers showed up each month. Some who did questioned why they would commit to a lease or a mortgage amid such uncertainty.

“What happens if you move here and buy a house and then you don’t have a job?” asked Francisco Real, 34, an oil rig maintenance worker who commutes to Williston from the Chicago area and lives in a small camp.

The population is down to 30,000, though city officials insist there will be no bust. Although the rig count is drastically down, they note, oil production has declined at a lower rate because rigs have become more efficient. The U.S. Energy Information Administration forecasts that production from the Bakken, which peaked at 1.2 million barrels a day in 2015, will remain above 1 million barrels in January.

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“When we go into these up cycles, the goal is to come out of them a better community than we were going into it,” said Shawn Wenko, the city’s economic development director.

Industry estimates say the Williston region has reserves of at least 6 billion barrels and possibly much more. Wenko said that oil executives told him not to be blinded by the slowdown; that although oil may not hit $100 again soon, it will inevitably rise past $50 or even $70 a barrel; and that Williston could thrive for as much as half a century on the Bakken.

“I think 50 years from now, this is going to be a story that can be told similar to that of the California Gold Rush, that this was a tremendous game changer,” he said.

Although the California Gold Rush of 1848 was tumultuous, its infusion of people and money eventually helped small cities like San Francisco develop diverse economies.

No one predicts that Williston will become the next Bay Area, but officials said it is moving in the right direction.

“When we started this thing, we had a tent city in our park,” said Mayor Howard Klug, recalling the beginning of the boom. “We got rid of that. Then they moved to the streets and camped. We got them out of there. Then they moved into people’s backyards. We got them out of there.”

“Then we had the man camps situation,” he said.

At their best, the camps are models of efficiency that help keep the oil economy running, enabling quick changes in personnel working in the region and taking service burdens away from the city.

But critics say the camps nurture a transient culture that does Williston no favors. A recent program on the National Geographic Channel, “Fracking Hell,” portrayed the Bakken area as a hub of drugs and crime.

Real, the worker from Chicago, said that portrayal was partly deserved. “There are a lot of crazy people,” he said. “You don’t want to bring your family here — at least until it calms down.”

The price of a barrel of oil has plummeted from more than $100 to less than $35. Drilling dropped off dramatically in Williston, N.D., with the number of rigs in operation falling from nearly 200 to fewer than 70 over the last year or so.

(Eric Gay / Associated Press)

The industry has helped build some apartment complexes, and it pays to rent some apartments on behalf of its workers. But the mayor said it needed to do more — that the town he grew up in was not just another oil patch.

“I think they could tweak their business plan a little bit so their employees could become permanent residents here,” Klug said.

At a city council meeting in November, Klug was on the winning side of a 3-2 vote on mandating that the camps close by July. The council agreed it would meet this month to consider allowing some camps to remain until later in the summer.

The meeting exposed tension between the oil industry and real estate developers over the issue.

Travis Kelley, who oversees local operations for Target Logistics, which runs the largest of the man camps, testified that the camps continued to serve a vital purpose.

“What we do in serving the industry with the rotational worker is unique,” he said, according to the Williston Herald. “They may be at Rock Springs one week and here another. We don’t believe permanent housing as far as an apartment is an appropriate solution for that.”

But John Sessions, an investor in a new apartment complex, told the council that the occupancy rate there was 60%. “This is not what the investment community expected,” he said.

Williston may have a problem it could not have imagined a few years ago: too much housing. Real estate prices have been plummeting as a result of the oil slump and the new construction. At one complex, a two-bedroom apartment that cost nearly $4,000 a month at the peak of the boom now goes for about $1,600.

Marcus Jundt, a developer and former mayoral candidate, predicted a “blood bath” for real estate investors until oil prices rise again and workers start coming back.

Williston is not like California or Arizona or even Texas, he said. “If you lose your job in Williston, you leave,” he said.

Even so, some newcomers said they were committed to staying, that Williston’s appeal was still on the rise. Springer said she was pleased that a Buffalo Wild Wings restaurant had opened in town.

“The list of things you have to go to Minot for is slowly getting smaller,” she said.

Special correspondent Eric Killelea contributed to this report

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Twitter: @yardleyLAT

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