Observations in the Bakken -- Widening the Highway South of Williston -- Sunday, August 28, 2011 -- Bakken, North Dakota, USA

Fourteen Observations -- Some Related To The Bakken

First and foremost: thank goodness for McDonald's. The company-owned franchise restaurants offer free wi-fi. I just walked from where I am staying to city library, about a 2-mile walk to use wi-fi there. When I got there, the library was closed. During the summer, the city library is closed on weekends except for Sunday evenings, 6 - 9 p.m.

But's it's an "evil" free market that has free wi-fi 24/7. Almost 24-7.

Second: shovel-ready jobs: I was last in the Bakken about six weeks ago. I don't recall any road construction on the two-lane road south of Williston to Alexander. Today, I drove that two-lane highway to Alexander and it appears that it will be a four-lane highway by winter. I asked a local about the highway: he said it was not going to be a four-lane highway, but rather stretches of four lanes for passing lanes. From a practical point of view, it certainly seemed to me that most of the Williston-Alexander stretch would be four lanes, and as noted, I don't recall any evidence of construction six weeks ago, and now it is close to being blacktopped. See Williston Herald for more on this project.

Third: this is a Sunday and everywhere building was going on. This is a right-to-work state; I have no idea if that has any impact. But on public projects (the aforementioned highway) and on private projects (the new Schlumberger complex going up) construction workers were out there working.

Fourth: speaking of working 24/7, the back-hoes were working digging ditches for the new water pipeline that is being paid for by the oil companies. See WAWS, a $150 million shovel-ready job. This new water system will include a significant upgrade and capacity expansion at the Williston city water plant and drinking water will be piped to surrounding communities fifty miles away, including Grenora, Watford City, Alexander, etc. I don't know the extent of this system but it will be huge. Geographically, it may be one of the largest water systems in the US. Six weeks ago I saw some pipeline being laid near the water plant; today I saw pipeline stretching north, south, east and west of Williston. Again, the back-hoes were digging on a Sunday; there is a sense of urgency here in the Bakken. No doubt there is a reason for this sense of urgency: it's but a few months to very cold winter weather. For newbies, the winter won't affect drilling operations until late January, February. The first freeze is around Halloween, but the severe winter doesn't kick in until after the new year.

Fifth: there's no pleasing everybody.  I talked to a local resident about the new four-lane highway being put in between Alexander and Williston. At least when I asked him about it, I thought it was a four-lane highway being put it, expanding from the current two-lane highway. He corrected me, saying that the project was a "waste of money." He said that it wasn't going to be a four-lane highway, just stretches of passing lanes. He thought "they" should have put in a four-lane highway. I agree with some of what he said, but from my perspective, the passing lanes seemed to be most of the stretch between Alexander and Williston, essentially making it a four-lane highway. And, oh by the way, for all the complaints about the roads, the highway between Alexander and Williston was in perfect condition.

By the way, if anyone knows about the appropriation process, it is sometimes easier to get an "addition" approved rather than a completely new project. I don't know if this applies in this case -- passing lanes vs four-lane highway but I wouldn't be surprised. 

Sixth: flooding. Much of the flooding is receding. It appears any wells affected by the flood are now high and dry (I'm sure folks will write me and tell my I am stupidly wrong on that; be that as it may), but the water has receded significantly. We drove out to a Madison / Bakken pair of wells that I was curious about, and the road was recently filled in for oil trucks and on the way out, we passed an oil truck heading out to the same well to load oil that was being stored in the on-site tanks. As expected, the Madison was was not pumping (according to the NDIC website, this well is not currently producing, but it is not abandoned). The BEXP Bakken well had a great first month and then the typical horrendous decline. I don't know for sure but this might be the well that BEXP (if it was BEXP, and not Whiting, I forget) that is holding $2 million in royalties until the owner of those mineral rights is sorted out; the horizontal runs under the river).

Seventh: the traffic is incredible. Busy, that is. But drivers seem courteous. Compared to Portland, Oregon, where I have just come from, the traffic in Williston moves smoothly. It seems traffic signals are set correctly and there is minimum congestion at lights (by big-city standards). Long-term residents will disagree and say the traffic congestion at lights is very, very bad.

Eighth: I can't remember if I posted this. Another rant about folks complaining about roads. The roads are bad. In the rural areas, they can be incredibly bad for the the farmers. The Williston Herald recently interviewed six men and posted their photos and their comments regarding the roads. Five said they weren't that bad; the six they said they were very bad. I believe most of the six (or was it five) were truck drivers; none were farmers. All were in their 20's and 30's. But considering there are 200 active drilling rigs in North Dakota, and most of them in four counties (there are 53 counties in North Dakota), the roads (from my viewpoint) are in great shape. Again, considering there are 200 active drilling rigs in these four counties. Seventy-five percent of wells are not connected to pipelines and require trucks to get oil from oil pad to nearest pipeline or rail facility.

Ninth: I asked a long-term resident how many oil service companies he thought were located in Williston. The long-term resident is a business man who deals with businessmen throughout Williston. He is very cognizant of the commercial build in Williston. So, how many oil service companies are located in Williston? He guestimated 25. --- Schlumberger, Halliburton, Sanjel, Baker Hughes, etc., ---

The Williston Herald says there are ... drum roll .. there are more than 135 (that is not a typo, more than 135) oil service companies located not "just" in North Dakota, but located in Williston. I imagine that if you asked the average person how many oil service companies in Williston, one would get the same answer, about 25.

And each of these oil service companies generate other businesses: restaurants, theaters, automobile dealers, construction companies, etc.

Tenth: supposedly there is a yellow Lamborghini in Williston. I have not seen it. It was spotted Friday night. I will keep an eye out for it. Hopefully get a photo in front of a Williston landmark to prove it's in Williston.

11th: I understand the Halliburton complex cost $60 million; and now, Schlumberger is building a complex probably about the same size west of Williston, perhaps about the same amount of money. I could be way off on the $60 million; it was idle chatter. I know I blogged about it months ago, but probably can't find it -- ah, yes, here it is, November 16, 2011.  Only $20 million, but I think that refers to the expansion project. Now there is a brand new Halliburton complex just west of the original site (there is an old, unused (?) Farmers Union building sitting between these two Halliburton sites). So, who knows, $20 million, $60 million? Whatever.

12th: someone recently wrote to complain to me about the long coffee lines at CENEX. I assume that 99.9995 percent of folks standing in line at CENEX have a home and could brew their own coffee and place it in a thermos. There are homeless folks in Williston that would love to have as one of their many complaints that the line for coffee is too long. I spoke to a local pastor earlier today and he brought up the issue of homeless folks. Somehow I just can't get excited about long lines for coffee. I can't wait to hear from folks on this one.

13th: And just for the record: I am impressed in general with how the residents, the county commissioners, the city commissioners, the truckers, the rough necks, the workers from Florida, Louisiana, and Texas, et al, are doing their best to keep this boom under some semblance of normality, if not control. I understand the state of Idaho has moved all its residents to North Dakota to help out with all the work that needs to be done. Right now I'm sitting in McDonald's and it's filled with grandmothers and their grandchildren enjoying an afternoon out. They've learned not to come during the coffee-hour rush.

Fourteenth: I was reminded last night that sales tax receipts in Williams County exceed sales receipts in any other North Dakota county, including Cass County, home of North Dakota's largest city, Fargo, North Dakota, with a population of 106,600 with huge regional farming population, on both sides of the border, North Dakota and Minnesota. The population of Williston is 15,000. Fargo is more than 7 times larger than Williston, and yet the county where Williston is located had a higher sales tax receipt total than the county where Fargo is located. Cass County, home of Fargo, also includes West Fargo with a population of 26,000. Moorhead, Minnesota, across the river from Fargo, has a population of 38,000 and more Minnesota folks probably shop in Fargo than vice versa (sales tax difference; retail shopping opportunities, etc). When you include West Fargo (in Cass County) but not Moorhead, Minnesota, Fargo is almost 9 times larger than Williston. But Williams County has a larger total sales tax receipt.

Enough for now.