Divide County, North Dakota: Years of high crude prices have transformed the sleepy US Midwest state of North Dakota into of the US’s fastest growing, with thousands of workers attracted by its promise of low unemployment and high prosperity.
The government has invested billions back into the state, not to mention the private investment behind the countless new hotels and restaurants popping up to house and feed many of the out-of-state of workers.
But with US crude losing more than half its value from about $100 (Dh367) a barrel in June last year to below $50 last month, several oil industry firms have warned of layoffs.
Charlie, who works in the oil industry pumping wells in Divide County, which lies on the fringes of the states oil boom, is thinking about changing jobs.
The number of oil rigs operating in the state dropped by around 20 per cent from mid-December to the end of January, according to state data. Though US crude rebounded in February to above $50 a barrel, which means some of these rigs, could come back online.
But Charlie, who did not want his surname published because he did not want to jeopardise his employment, said the oil companies “are going to trim some fat” as long as prices stay low.
Charlie is considering switching back to driving trucks. Truck drivers are a commodity in high demand. The local high school and primary school, struggling to compete with the high wages offered by the oil industry, has been unable to run the necessary school buses each morning with employees switching to the oil industry.
“There are winners and losers … everybody is nervous,” said Gerry, who was sitting in a roadside truck stop with Charlie. The two discussed the slowdown and what it will mean for them. Charlie asks Gerry for advice, “I don’t think there’s an over-abundance of oil trucks. They aren’t part of the boom are they?”
Gerry, who also requests his surname not be published, acts as a broker for a trucking company operating in North Dakota’s oil boom. Gerry, who after years of driving trucks, now spends his time ensuring the trucks are always on the road but low prices are changing all that.
“It’s going to get thin,” he tells Charlie.
“You can feel the slowdown,” he later adds.
But trucks continue to tear up and down the state’s west where the oil-rich Bakken formations, where most of North Dakota’s shale oil is located, stretches across 31,079 square km. The roads that were never designed to handle such heavy loads have been left rutted by years of the oil boom. There is hope that weak oil prices will slow down the industry just enough for the state to catch up.
“This breathing space seems to us like an opportunity to get the infrastructure on the ground in a more efficient way,” said Democrat State Senator Connie Triplett.
The North Dakota Petroleum Council, a group that represents the interest of more than 500 companies working in the state’s oil industry, is concerned the industry will not be able to replace the laid-off workers. North Dakota has had one of the lowest unemployment rates in a country that has been pulling itself out of recession for years. The oil boom meant thousands from across the US flooded the state to seek employment.
The unemployment rate in North Dakota was 2.7 per cent in 2014, according to preliminary state data, less than half the 6.6 per cent national average.
“This is a world-class resource. We know it’s here. We’re going to produce it long term,” said Ron Ness, president of the North Dakota Petroleum Council, speaking on the state’s abundance of oil that saw 1.2 million barrels a day produced last year.
“[But] the shale oil plays are very labour intensive. We need a lot of people so having the ability to ramp up again will depend on our ability to attract and retain people,” he added.
North Dakota was the fastest growth state in the US between 2010 and 2013 when its population grew by 7.6 per cent compared to the 2.4 per cent nationwide average, according to federal data.
Modern day gold rush
The state had seen its population decline for decades as residents moved away from its sleepy country towns and cities for bigger, cosmopolitan cities. But on the back of a modern day gold rush, thousands flocked to the state to cash in on its booming oil industry. The 50,802 people that moved to North Dakota over the period nearly matched those that left over the 60 years before 2010.
Others in Divide County that do not work in the oil industry but have benefited from its boom do not share the same concerns as Charlie and Gerry.
“Oil production is always up and down,” said Kay Garbel, co-owner of the sole furniture store that bears her name in Crosby, a town in Divide County.
Roughly 80km south from Divide County in Williston, the heart of the state’s oil boom, people are still flocking to the city hopeful of still cashing in on the oil boom even as prices weaken.
Mo Noor, a University of Connecticut graduate, left his job at Bank of America last October when prices were hovering around $85 a barrel, down from Brent crudes June high of $115, to drive taxis in Williston.
Noor, who has paid $12,000 off his university debt since moving to Williston, said he makes more money today driving taxis than the white-collar job he left in New York. Noor is not alone. He said he moved with a friend and fellow University of Connecticut graduate who has a degree in mechanical engineering.
Earlier, on a bus from Bismarck, the North Dakota capital, a man who gives his name as Idrissa has travelled 2,819km from Atlanta, Georgia in search of a job.
“Maybe I’ll get a job on an oil rig, maybe I’ll get a job at a restaurant,” he said without giving his surname.
North Dakota’s sole congressman, speaking at his office in Bismarck, is bullish the state has built a strong enough economy to wait out weak prices. Bismarck, 365km from Williston, has also cashed in on the oil boom even though there are no oilfields in the capital. The city has built an entire north side that is lined with brand new hotels, fast food restaurants and departments offering sign-on bonus for as much as $600 and hourly salaries starting at $12 an hour, much more than the standard national minimum wage of $7.25.
“We are not on the verge of an unemployment crisis, largely because there are tens of thousands of unfilled jobs. If anything we have a workforce crisis,” said Kevin Cramer, a Republican.
