There Will Be Bucks in the town that struck black gold
In recession-hit America, one small corner of North Dakota has never had it so good. David Usborne reports from Williston
Monday 13 June 2011
It barely matters that the view from the motel patio is a building site where a new Holiday Inn will soon rise. It's Richard Seeley's night off, chunks of boneless pork are spitting on the gas grill and the beer is good and cold. And he knows that before dawn he'll be back on the job again. Thousands of miles from home, Seeley is here for one thing only: the black juice underground that is catapulting western North Dakota out of the stereotype of lonely, broken-down farms and empty ghost-towns into a land of plenty that is soon to join the ranks of the top oil-producing territories of the world. It is a process that is bestowing great wealth on a few North Dakotans whose forebears, mostly immigrants from Scandinavia, homesteaded on unforgiving land here and whose own children held on to their sub-surface mineral lease rights even during the grinding times of the Dust Bowl and the Great Depression.
Not doing badly either is North Dakota itself. It was just as our current Great Recession was descending on the rest of the US three years ago that its oil boom was kicking up. Today, the state has an unemployment rate of 3.3 per cent, compared with 9.1 per cent nationally, and a huge $1 billion budget surplus. And then there are guys like Richard Seeley, who joined the stampede here for a piece of the action. Based in this motel in Williston, the main town servicing the energy industry and housing its workers – or trying to – he puts in more than 100 hours a week for Halliburton. For every month he works, he gets two weeks off.
"Williston is the modern day gold rush town," says Seeley, who leads a "fracking" team, the name of a new and controversial drilling technology that uses pressured liquids to blast oil out of the vast table-top layer of rock 10,000 feet deep, known as the Bakken formation, that stretches into neighbouring Montana and Saskatchewan. "If you ever wanted to go back in time to the 1800s in California, this is it."
Or to California's oil rush of the turn of the 20th Century. If it's not quite like the 2007 film There Will Be Blood, there is a bit of the Wild West feel here. Scores of communities big and small in this lumpy landscape of wheat fields gashed by rocky canyons are discovering that with the boom comes heavy disruption, environmental and social. They worry about lorry traffic tearing up the roads, the gas flares lighting the night skies, the chemicals in the fracking water, the invasion of so many strangers, and what happens when one neighbour with mineral rights gets an oil windfall and another, without rights, does not.
Nobody sees the tumult more clearly than Tom Rolfstad, the director of economic development for Williston. If his title once implied working to stimulate business activity in his town, today it might mean doing everything possible to stop Williston from blowing up from the pressure of having too much of it.
In a quirk of history, Rolfstad's father – his family is from Norway on both sides – was a prominent lawyer in town whose clients included the Bakken family, also of Norwegian blood. A first well drilled into the shale layer from their farm back in the early 1950 gave the Bakken Formation its name. "I was probably out there in a pram for all I know," Rolfstad muses.
His office in City Hall has maps on every wall with projections for growing Williston to cope with its accelerating population influx. "No one thinks that this town isn't set to double in size, but we could be talking about triple or quadruple," he ventures, describing plans to push out the town's sewerage, water and utility lines as well as roads and residential subdivisions.
"If this was happening over maybe a 30-year period, it might be manageable," says Rolfstad. He notes that 2,100 new wells are being drilled a year and each one needs four miles of pipe. That means shipping 8,400 miles of pipe to this part of the state every 12 months. "What we are trying to do here essentially is build a new industrial subdivision that is the size of some small states," he says. "It's mind-boggling."
One of the toughest problems is finding workers for businesses not directly connected to drilling and which can't compete on wages. This has driven Williston to arrange visas for foreign students from as far away as India and Brazil to come here just to make hotel beds and flip burgers at the local McDonald's.
Another drama was the discovery that a new strip-club had opened, undetected and virtually overnight. A new zoning law was quickly passed to push future erotic joints into the industrial parts of town. This is no frivolous matter. With so many workers pouring into Williston and other communities nearby, what used to be a traditionally even mix of men and women has been thrown completely out of kilter.
The oil workers, meanwhile, can't find rooms – the not-yet-built Holiday Inn is sold out for months – and are mostly being crammed into so-called "man-camps" sprouting all over the region, composed of spartan trailer homes bolted together to create not just bedrooms but cafeterias, laundries and recreational rooms too.
One, run by a company called Target Logistics, is a grey scar on the landscape six miles north of Williston. "It's my own minimum security prison," jokes manager Brad Moulton, who has built trailer towns like this for oil workers in Iraq and Saudi Arabia. There is a fence around his camp topped with barbed wire, and overnight "guests" – women – are strictly forbidden, as is alcohol. The fraternising-with-females problem is "pretty bad", Moulton agrees, noting that the camps planned for around Williston will soon add 6,000 men to the population mix. "That makes the women-to-men ratio go down real quick", he says.
Among those worrying for his home town is Jason Wheeler, 31, who manages rigs for one of the smaller drilling companies. "This whole darn place is going to collapse in on itself," he predicts, drinking a Budweiser and tomato juice at Big Willy's Saloon, where a favourite dish is the Frac' Attack, featuring grilled cheese and a 12-ounce burger in a bun with chips and a smothering of red pepper cream sauce.
Wheeler is also in charge of recruitment and the workforce squeeze affects him too. "It's gotten almost to the point where if they've got a pulse you hire them, though I do try to weed 'em out if I can."
Kathleen Neslet, a geologist in nearby Tioga, reckons this boom is not only here to stay but has barely begun. "We are only in the baby stages," she predicts over iced water in a local coffee shop. "This is just in its infancy and we still have a lot to learn." She has a team of more than 100 in her company working the oil patch, but she also runs a ranch with her husband and two sons. "Some of what's happening is good and some of it is not so good," she concedes. "I understand both sides of the story."
The not-so-good includes stories like those of Joe Huber, who returned to his native North Dakota in 1998 to buy a small ranch with his wife to start a new life, he imagined, of rural tranquillity. Today, the couple have split up and the home they built is on the market, thanks, he says, to the misery caused by the drilling.
"I have really seen it turn neighbour against neighbour already and this is only just getting cranked up," Huber says. For him, the trouble started when oil companies tramped across his land surveying for oil without permission. He kept them at bay but they were soon there drilling – and fracking – right by his property lines. In his home, there was no peace. "The whole place hummed, it literally hummed. It was just the most unnerving sound," he says.
Now he has thrown in the towel and Mr Huber – who, by they way, is one of those without mineral rights – says he will leave the state entirely.
Tracing the owners of those rights falls to people like Tressie Heinle and Toby Panasuk, who spend most days county courthouse in Stanley, in the heart of the oil patch. They are "landmen", trained to trawl through property deed archives going back a hundred years or more. As many as 90 landmen will crowd the courthouse on some days, rushing to trace lease-holders for the oil companies to contact and cut deals with.
While it is said that North Dakota is gaining two new millionaires daily, finding them isn't easy. "You can see a guy dressed like he can't piss in a pot but is worth a fortune," says Panasuk. Heinle reveals that she and her husband, who also have a farm, had some of the magic mineral rights and had been getting royalty cheques from oil production on their land. "It's been good," is all she will say.
But Panasuk, 60, is more forthcoming about his recent luck. He has sold mineral rights he owns to a drilling company for $120,000. All being well, he will then receive $900 a day in royalty payments once the well starts production.
Panasuk is the human face of all that is happy about the North Dakota oil boom. How will it change his life? "You know, it's all so new, I haven't really had time to think about it yet."
Beneath the oil boom
* As geologist Kathleen Neslet remembers, this is not North Dakota's first oil boom. The Bakken Formation was identified 1951 and it was in the early 1980s that the oil companies poured in to exploit it. But the rush was over almost as soon as it started when in 1983 they packed up and left almost overnight. They had been drilling vertically into the shale and the success rate of the wells had barely been 30 per cent. "We were eating dust" after they left, she says of herself and her colleagues. "Or eating nothing at all."
* Things were already starting to pick up again in early 2008 when the US Geological Survey concluded that Bakken and another formation just beneath it called Three Forks might contain as much as 4.3bn barrels of oil. Most importantly, new technology and higher oil prices suddenly made the Bakken attractive again.
* The big innovation is horizontal drilling. In essence, the rigs can now go down to the level of the oil-bearing shale layer and then turn 90 degrees to drill horizontally. As they do so, they also pump in huge quantities of water under pressure to smash the shale and release the oil inside it – known as fracture stimulation or "fracking".
* Today, the oil companies have achieved an astonishing 98 per cent success rate with their wells in North Dakota. The oil flows out under its own steam for a few weeks and then is drawn out by nodding donkeys (above). The biggest problem is building the trail links and pipelines to get it to market.
* Two weeks ago the US Geological Survey said it was preparing a second survey in North Dakota. Most experts think this will raise the estimate of recoverable oil to 10bn or 11bn barrels. Now number four among the oil producing states in the US, North Dakota could soon be number two only behind Texas.
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