Boomtown bound: Surging North Dakota energy development attracts Grand Valley businesses and workers
For people who’ve lived through the boom and bust of energy development in Western Colorado, the scenario sounds all too familiar.
A small city experiences a dramatic increase in high-paying jobs. The unemployment rate drops as workers flood to energy jobs. Opportunities abound for businesses that build and sell houses, broker mortgages and provide basic services for the influx of people.
The scenario isn’t a snapshot from four years ago in Mesa County, but a current picture of what’s happening in perhaps the biggest boom town in the United States. Even workers and businesses from the Grand Valley are headed to Williston, N.D., where oil extraction near the Canadian border has the town welcoming workers even as it faces the challenges of a growing work force.
“Things are looking very good in Williston,” says Amy Krueger, director of the Williston Convention and Visitor Bureau.
From the business travelers provided by energy companies to the usual summer tourist traffic, Williston is scrambling to keep up with demand for services even as unemployment has dropped below 2 percent, Krueger says. Hotel rooms now total 850 — 25 percent more than in 2009 — and three more hotels are under construction, she adds.
The rising price of oil and the oil-rich deposits in the Bakken shale formation provide opportunities for energy workers employed by Williams Production, Encana Oil and Gas, Halliburton and Schlumberger. Many of those workers once toiled in the natural gas fields of the Piceance Basin in Western Colorado.
Williams has purchased leases for more than 80,000 acres on tribal lands in the past year as well as an office building in Minot, N.D., says Susan Alvillar, community affairs representative for Williams. The company sent a Halliburton hydraulic fracturing crew to the area last spring.
“It’s driven by oil and the economic returns are superior to drilling for natural gas,” says Carter Mathies, spokesman for Clover Energy Services, which pursues oil and gas opportunities in the Western U.S. Oil that sells for $100 a barrel is more lucrative than natural gas that sells for about $4 per thousand cubic feet, Mathies says.
According to U.S. Geological Survey estimates, more than 3.6 billion barrels of oil lie in the Bakken shale.
“I’m just amazed at the activity,” says Wes D’Aponti, president of Environmental Audit and Assessment in Grand Junction. “Equipment, people, activity in oil and gas. Man camps everywhere. It’s like it was here five years ago.”
D’Aponti opened a branch office in Dickinson, N.D., to provide environmental clean up services in the wake of drilling activity in the Dickinson, Williston and Minot areas.
“It’s almost like an 1800s gold rush up there,” says Jack Hays, president and chief executive officer of Western Pump and Dredge and Resource West in Grand Junction. Of his approximately 400 employees, about 60 percent are working outside of the Grand Valley, aiding companies that extract oil and natural gas in Greeley as well as North Dakota and Pennsylvania. Employees typically work two weeks at a time on site, then return to the Grand Valley for two weeks to recuperate — and spend money.
Ads in the Williston Herald newspaper advertise oil field rig jobs paying at least $23 an hour. With the huge amount of overtime pay the workers accumulate during 14-day stints, they can earn more than $60,000 a year and enjoy 26 weeks of time off each year. “We inject millions into the local (Grand Valley) economy,” says Hays.
In addition to money the workers spend locally, the company purchases much of its materials from local companies. Hays buys nuts and bolts and pump parts from Monroe Pump and Supply.
While Western Pump and Dredge supplies people to work on pumping liquid from drilling sites, Resource West assembles equipment that Hays sells or leases to companies working on energy sites. The inventory includes a Land Shark Evaporator, a device that sucks water out of evaporation ponds that store water and materials that are a byproduct of drilling. The evaporator atomizes the water particles and sprays them back over the evaporation ponds. The water particles are so small they evaporate soon after the device sprays them into the air. The machine evaporates water nine times as quickly as when water is allowed to naturally evaporate from ponds, Hays says. The device sells for $45,000.
The robust economy in Williston also provides work for companies that aren’t directly involved in resource extraction, but still capitalize on the effects of the energy boom. The demand for housing, for example, runs high. Some apartments are reportedly renting for as much as $1,500 a month. Man camps are still required to house workers who can’t find a place to stay.
Enter such Grand Junction companies as Senergy Homes, FCI Constructors, ProBuild and Envoy Mortgage, which are all working in the Williston area while they maintain base operations in Mesa County.
And for the nearly one in 10 workers looking for jobs in Mesa County, Williston could offer an oasis in the desert of a soft national economy.
“Right now we are dying for workers,” says Ron Wilson, president of Crown Trucking and Crown Supply Company in Grand Junction.
Wilson says he’s been sending workers to the Williston area since February 2010 and also has people on the ground in Texas and Pennsylvania. About 60 workers are in North Dakota, with 30 workers on the job at a time. Most provide support services for the fracking process, which fractures rock to release oil and natural gas, Wilson says. Others drive supply trucks. Most of the workers set up their base near Williston, but work in various parts of North Dakota, he says. Drivers with commercial drivers’ licenses are in high demand, and the Williston newspaper advertises truck driver salaries ranging from $45,000 to $75,000 a year.
Business is so brisk Wilson leases a 19-seat private airplane to fly workers directly from Grand Junction to Williston. The flight takes two hours, compared to a nearly day-long travel itinerary when the company uses commercial flights and several connections, Wilson says.
The Mesa County Workforce Center in Grand Junction doesn’t hear about all of the energy related openings outside of the area, but does post some of those openings for people looking for work.
“We have had openings for companies that are here, but the jobs are elsewhere,” says Gilbert Lujan, supervisor of the workforce center. “We’re always open to any company that seeks workers.”
Lujan says he’s received an offer from an economic development organization in Minot to conduct a job fair promoting the jobs in that area to Mesa County residents.
The Census Bureau estimated Williston’s population in 2009 was a little more than 13,000 — smaller than Montrose. The population is likely to grow as long as energy companies can sell the oil they produce. Should the boom continue for another nine years, city leaders estimate the population will reach 40,000 by 2020, Kruger says.
Darin Carei, owner of Senergy Builders in Grand Junction, says he’s involved in a project to build 40 homes in Williston. He’s working with Ted Martin, former owner of Powderhorn Ski Resort.
“It’s just a boom town,” said Carei, adding the atmosphere reminds him of the oil shale boom days of the 1980s in the Grand Valley. “As soon as we landed, it was like, ‘Wow.’”
Carei says he works in Williston two weeks each month.
“It’s the fastest growing town in America,” says Lonnie Knob, branch manager of Envoy Mortgage in Grand Junction, who plans to open a branch office in Williston. “My potential to be up there is once a month.”
Major Mortgage also plans to open a branch office in Williston. “I’ll be heading up there in late July,” says Ryar Hayward, president of Major Mortgage in Grand Junction. Major Mortgage plans to hire people who already live in Williston to help establish a local culture at the office.
The influx of Grand Valley residents hasn’t created the friction that can occur when a slew of newcomers moves into a city, say the people interviewed for this story.
“We’ve been received very well,” says D’Aponti.
Census data indicates the median home sales price in 2009 was about $102,000 in Williston, with median household income of about $52,000 — the same median income reported in Mesa County in 2010. But home prices have risen in Williston in the past two years, says Krueger, who also serves on the board of the Williston Chamber of Commerce. The higher cost of housing can be viewed as one of the down sides of the boom, depending upon whether a person is buying, selling or building. Just as the Grand Valley has experienced the ups and downs of energy exploration, Williston has a history of similar cycles.
“Williston has been through several booms and busts,” Krueger says. “With growth comes growing pains. But it’s always a positive thing,” she says, acknowledging her job is to promote growth and development as part of the city’s goal of recruiting more businesses and people to live in the city.
Another parallel to the Grand Valley’s history is the money local communities realize from energy company contributions to charities, non-profits and government agencies. Energy taxes have enabled officials in Williston to acquire land for schools and parks, says Krueger. “They’re very supportive of our community,” she says. “They’ve donated a lot of money to our community.”
One voluntary contribution paid the bill for the largest community playground in the city, Krueger says.
How long can Williston and other oil-rich regions expect the boom to continue?
“Certainly more than five years,” says Mathies.
Hayward says he’s heard estimates the oil will flow freely for up to 15 years.
No matter what the time period might prove to be, it’s almost certain people in the Grand Valley who draw paychecks from North Dakota and elsewhere will take advantage of the boom as long as it lasts while pumping much of their incomes into the pockets of local businesses and government in Mesa County.