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  Comments (16) Total Friday Apr. 18, 2014
 
Oil Rush
Migrating for work
Photo illustration by Steve Larson/Flathead Beacon
In 2008, National Geographic published a story called “The Emptied Prairie,” detailing a prolonged migration out of North Dakota’s plains. Towns were left deserted as “American assumptions about the land proved to be wrong.” Century-old homesteading dreams died in the grasslands.

But an oil boom, which started in Montana over a decade ago and has spread into Canada and North Dakota, is rapidly populating the plains once again, even if the living arrangements are only temporary. Workers from across the country are traveling great distances to North Dakota, willing to brave frigid winters in mobile homes and toil in oil fields, just happy to have a job.

Throughout the recession North Dakota has maintained the lowest unemployment rate out of the 50 states, hovering around 4 percent. So it should come as no surprise that residents from Northwest Montana, by far the state’s hardest hit area during the economic downturn, are flocking to their eastern neighbor in search of work.

Flathead County’s unemployment rate reached a record-high 14.1 percent in January, while the jobless rates in neighboring Sanders and Lincoln counties eclipsed 20 percent.

“We’re seeing quite a few people who are unable to find work locally and they’re going to jobs in North Dakota,” Laura Gardner of the Flathead Job Service said, adding that out-of-state employers have been actively recruiting and holding job fairs in the region.

Beginning soon, however, a number of those workers may be able to stay in Montana. Dave Galt, executive director of the Montana Petroleum Association, said oil drilling permit requests are ramping up in 2011, largely focused in the state’s northeastern counties. Online oil and gas investment sites are giddy with speculation about Montana’s fields.

Jim Halvorson, petroleum geologist for the Montana Board of Oil and Gas Conservation, said exploration is already taking place in areas as far west as Glacier and Toole counties.

“Every time our phone rings it’s someone interested in places over by Cut Bank and Shelby,” Halvorson said. “There are at least three companies active on the Blackfeet Reservation and each one of those companies has established some wells.”

It remains to be seen what impact oil exploration will have on unemployment in those counties, but if the areas that already have extensive drilling are any indication, jobs will be plenty.

Richland, Wibaux and Fallon counties, which border North Dakota, have unemployment rates between 3 and 3.7 percent at last count, while immediately to the west McCone’s rate is 3.3. The counties have the four lowest jobless rates in the state.

But such numbers are nothing new for the region. After all, the boom currently taking place in North Dakota has its roots in Montana, dating back to 2000 when the first horizontal well was completed in the Elm Coulee oil field near the North Dakota-Montana border.

Elm Coulee is still producing and will continue to do so for years to come. But even if it were to run dry today, its impact on the regional oil industry would persist in a big way. Were it not for Elm Coulee, there may not be a North Dakota boom today.

****

In the late 1990s, Richard Findley, an independent geologist out of Billings, studied the Bakken Formation – a large underground geologic structure – at length. It had been known for decades that oil reserves lay within the Bakken, though drilling attempts over the years often produced marginal results. There were, however, some boom years.

“There have been historical Bakken plays, back in 1980s, but they petered out,” Halvorson said.

As many oil companies were giving up on the Bakken, which stretches into Canada and the Dakotas, Findley discovered that the middle layer of the formation is porous and would likely yield more oil. Previous attempts had focused on the top shale layer. Thanks to Findley’s ingenuity, the Bakken turned out to be the largest onshore oil discovery in the U.S. in decades. A formation underneath the Bakken is producing large amounts of oil as well.

Findley also helped to pioneer horizontal drilling and hydraulic fracturing technology, which opened the doors for Elm Coulee and subsequent Bakken exploration, including the current North Dakota rush. Findley became a folk hero in the oil industry, garnering national headlines and profiles in publications such as the Wall Street Journal.

Similar to what’s happening in North Dakota now, the Elm Coulee boom created instant millionaires and filled the state coffers with oil money. There were more jobs than workers, which is still the case even though Elm Coulee reached its peak over five years ago.

“North Dakota and Northeast Montana around Sidney – the only thing with more of a shortage than the workforce are places to have the workers sleep,” Halvorson said.

A 2008 report by the U.S. Geological Survey concluded that the Bakken Formation holds 4.3 billion barrels of “recoverable oil,” not including the expansive Canadian Bakken. There were previous reports that the Bakken held up to 500 hundred billion barrels, which would be nearly double the oil reserves located in Saudi Arabia.

“That was based on the unpublished work of a deceased USGS geologist,” Halvorson said.

Following Elm Coulee, oil exploration picked up along both the Canada and North Dakota Bakken. Galt said North Dakota’s success has brought attention back to Montana’s oil fields, outside of Elm Coulee.

“Success breeds interest,” Galt said.

North Dakota’s portion of the Williston Basin, in which much of the Bakken is located, is the deepest, Halvorson said, “which helps the productivity of the source rock.” But even if Montana’s fields don’t yield as much oil, it’s apparent that increased exploration in the Treasure State is arriving.

In other words, the boom has returned to its roots.

“You’re seeing it circle back,” Galt said.

****

For now, Montanans are more than happy to travel to North Dakota for work. Dave Truckner, manager of Horab Transport Company in Williston, said his company has “a half dozen” employees from Western Montana and a couple more from Bozeman. It’s 600 miles from Kalispell to Williston.

Truckner is from the Flathead and said he decided to begin recruiting employees in the region after visiting the area last year. There were so many people without jobs, yet back home in Williston there were no workers left. They all have jobs. Restaurants like McDonald’s are desperate enough for work to offer significant signing bonuses.

“Unemployment in the Williston area is under 3 percent,” Trucker said. “The people who want to and are able to work are working.”

Horab Transport and its sister company McCody Concrete Products make and deliver precast concrete foundation pads to be used in oil field pumping units. Truck driving jobs pay $20 an hour while labor jobs pay a couple of dollars less. Workweeks are between 45 and 60 hours.

“That will pick up as the weather gets nicer and the days get longer,” Truckner said.

There are no statistics on the exact number of Montanans who work in North Dakota, though it is a lot, and growing. Barbara Wagner, senior economist for the Montana Department of Labor and Industry, said her agency is working on a report on newly hired employees, which may shed light on the state’s transitory workforce.

Gardner of the Flathead Job Service said many of the workers heading east from the Flathead have been laid off by the timber industry or Columbia Falls Aluminum Company. In addition to the regular job fairs, Gardner said one employer is considering holding a videoconference job fair for Montana workers.

Truckner said his company has grown from single-digit employees to more than 70 in the last decade because of the oil rush. His out-of-state employees work year round and live in campers on the company’s property, where water and septic are available. They maintain residency in their home states.

This large migration has dramatically changed daily life in Williston. Truckner said traffic is “unbelievable” and you see “a lot of empty shelves in Walmart.” The only time there are hotel vacancies is when workers head back home for the weekend.

“During the week, you’d almost have to shoot somebody to get a hotel room,” Truckner said.

But Truckner isn’t complaining. These are exciting times in western North Dakota and Truckner enjoys seeing all of the different license plates in town. He especially likes to see Montana plates.

“I’d really like to have my Montana workers stick around because I’ve gotten some good people from over there,” Truckner said. “But who knows? Most of them have families back home.”
 
On 03-27-11, Yudamni commented....
Virginia Commonwealth University has beat Kansas and put the coup de gras to the Presidential Bracket.  Now what can he focus on?
 
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