TOPICS > Economy

North Dakota Boomtown Suffers Growing Pains Trying to Keep Up with Demand

August 7, 2012 at 12:00 AM EDT
As domestic oil production increases, towns like Williston, N.D., struggle to meet demand for workers, housing and improved infrastructure. For some communities experiencing the benefits of an energy boom, rapid expansion comes with serious trade-offs. Ray Suarez reports.

JEFFREY BROWN: Tonight, we begin a series on the changing landscape of energy in the U.S. and the consequences of ever-increasing development.

Ray Suarez is our guide this week. Tonight, he visits the booming economy in western North Dakota, where new drilling technologies have opened up massive oil reserves.

RAY SUAREZ: In western North Dakota, near the Montana border, there’s so much oil around, it almost feels risky to say it: boom — a 1 percent unemployment rate, heavy traffic in what was once a sleepy town of 12,000, nowhere to live, restaurants that close early because they can’t find enough people to work at $15 an hour and others offering signing bonuses to dishwashers and fast food workers.

Geologists say there is a small ocean of oil, hundreds of billions of barrels trapped underground here in North Dakota. So, thousands of workers flocked to Williston to pull it out. Instant towns rose, instead of corn and wheat, as Williston joined a new American energy boom driving growth in parts of the West.

Just two years ago, the United States was importing two-thirds of its oil. Today, imports are down to less than half U.S. oil needs. Oil companies have known about these supplies for decades, but new technology makes the deposit, known as the Bakken, profitable to drill.

Lance Langford manages the Bakken for the international company Statoil.

LANCE LANGFORD, Statoil: It’s just the tip of the iceberg right now. We are going to be here for many, many years. And once we are finished drilling these wells, these wells will produce for 30 to 40 years.

RAY SUAREZ: For Williston, that means growing pains and a gusher of cash surging through a town not totally ready for it. Williston’s population doubled in size in two years. Suddenly, the parking lots are full with cars from all over and job-seekers coming from every direction.

Joe Gunderson moved from Montana and says he is making the best money of his life.

JOE GUNDERSON, N.D.: It’s been good. It’s really good, I mean, anything you want. Money is not really an issue. I mean, if you want it, you just buy it and make it work.

RAY SUAREZ: The word’s out. Men are getting in their cars and trucks and driving to North Dakota.

MAN: It’s easy to find a job here. It’s just what you are going to get is the issue. Within 24 hours of being here, I already had maybe five different job offers and took one of them.

RAY SUAREZ: Tyler is working as a cook until something opens up in the oil fields and living in his car.

MAN: That is the food section down there. That is the kitchen. Out back, that is toiletries. Essentially, what I do is, I move everything from back to the front whenever I want to sleep and then the front to the back whenever I want to drive around or can fit a passenger in. I have my cooler. I have a lot of good camping gear, but there’s nowhere to camp around here, unless I want to pay a ridiculous amount of money. Yes, welcome to my home.

RAY SUAREZ: So, for now, home is a parking place.

The price of housing comes up again and again, from longtime residents, newcomers and businesses. Labor-hungry companies have found one solution: workers’ camps built and operated by outside contractors like Target Logistics. Workers who can’t find an affordable place to live want to leave Williston. A clean decent room in a sturdy prefab building, three big meals a day, and a private shower all take a little of the sting out of an 80-hour week.

TRAVIS KELLEY, Target Logistics: You don’t want a bunch of permanent housing sitting around there on the market.

RAY SUAREZ: Regional vice president Travis Kelley oversees accommodation for almost 4,000 workers in Williston for housing contractor Target Logistics.

TRAVIS KELLEY: I know the general public, when they see one of our lodges, they think, oh, it is just a man camp and, you know, these are rough-and-tumble guys getting in fights all the time. It’s really not true. The demographic of folks that we have staying with us come from all over the country. And most of them are family guys. They have a wife and kids that they are trying to support back at home.

RAY SUAREZ: Jeff Burgof didn’t expect to wind up running a kitchen in a workers camp 1,500 miles from home or living dorm-style without his wife and family. When the economic crisis hit, he tried to hang on, but eventually had to close his restaurant in Mesa, Ariz.

JEFF BURGOF, N.D.: My first week here, I didn’t sleep much, but thank God to technology. I am on the little phone every night with Skype and see my kids every day, tell them good night, give them the old kiss on the phone. It’s not the same, but at least they see my face, I see their face, and I’m able to tell my wife that I love her and it’s like looking right at her.

RAY SUAREZ: Trying to manage his city’s wild ride is Mayor Ward Koeser. Thousands of new people crowd the roads, drive up local wages and mean the local sewer system has to handle thousands more flushes.

MAYOR WARD KOESER, Williston, N.D.: Probably one of the biggest things that we face — are faced with is the cost of employees for the city. In other words, we have added — we added three policemen last year. We added six policemen this year, three more dispatchers, seven people in public works, building inspectors, planners. Basically, down the road, you have to add these people.

RAY SUAREZ: Raising the cost of local government by almost $3 million. And the town has had to borrow the money for personnel and infrastructure, like new streets and garbage collection. The surge in oil royalties and sales taxes is collected by the state, not by Williston.

MAYOR KOESER: Here, we have a rig. This is Statoil that’s drilling. They’re actually looking to drill four wells off of this location. And it’s interesting how close it is to the city.

There is a human cost in this whole process, just the stress that is right here. North Dakota has always been known as really a stress-free state. And I don’t know that Williston would be considered that right now.

RAY SUAREZ: The mayor seems to have his finger on his constituents’ pulse.

WOMAN: We’re frustrated with lack of housing. We are frustrated with lack of services. We are frustrated with traffic. We are frustrated with driving. We are not alone. And I don’t care whether you have been here a long or a short time. We all are. There’s not enough police. There’s not enough ambulance. There’s not enough fire. There’s not enough restaurants. There’s not enough anything.

RAY SUAREZ: The traffic woes come from a tremendous rise in truck traffic. Hydraulic fracturing takes millions of gallons of water pumped into high pressure in underground wells to break open oil deposits, the water hauled around Williston by hundreds of tanker trucks.

And water that is dirty has to go someplace after it’s used. The possibility of contaminated water making its way into local water supplies worries some longtime residents. Mark Trechock directed the Dakota Resource Council for the past 18 years.

MARK TRECHOCK, Dakota Resource Council: Last spring, when we had a very wet spring season, we had over 50 reserve pits across the state which contained drilling fluids and mud and oil and lots of stuff you don’t want in your water, and overflowed during that spring thaw and some of them got into surface water.

RAY SUAREZ: A saltwater pipe broke on Linda Monson’s land and contaminated soil and the water source her cattle rely on.

LINDA MONSON, N.D.: Actually, they say that the creek is OK to drink out of. There’s just one spot down here where they are — they are pumping the water out from underneath the ground. And there is a spot where it is coming to the top of the ground, and they don’t want them to drink out of that yet either. They keep testing it.

RAY SUAREZ: Ken Salazar is the secretary of the interior and knows there are worries nationwide about fracking fluid.

INTERIOR SECRETARY KEN SALAZAR: And so that is why we have proposed and are moving forward to finalize rules that will require full disclosure to the American public of the kinds of fluids that are being injected, requirements that will make sure that there’s wellbore integrity, so you won’t have leakage of fluids out into water-bearing aquifers.

Salazar recently visited North Dakota and says he is glad to see the development and the jobs.

MAYOR KOESER: There’s a lot of opportunities.

RAY SUAREZ: Mayor Koeser, if it all goes according to plan?

MAYOR KOESER: As we grow, I think there’s quality of life things that we can do so that some of these people who are moving here temporarily just to work will fall in love with Williston, North Dakota, and say, that’s where I want to live. I want to start a family here. I want to raise my family here.

RAY SUAREZ: And maybe, if Williston gets it right, Mayor Koeser hopes, longtime residents will fall in love again with their transformed hometown.

JEFFREY BROWN: Our energy series continues tomorrow, when Ray reports from Colorado, where a major coal producer is betting all on natural gas.

And, online, you can find more about the impact on boomtowns like Williston, N.D. We have an interview with John McChesney, a former NPR reporter, who has a new documentary about this from the Center for the American West at Stanford University.