Idle Rambling on the Bakken --

Note: earlier I posted a link to some photos at The Atlantic; the link was broken; it's been fixed. Here it is again. Sorry. Click here for photos of the Bakken.  (I hope that works. Smile.)

Now, back to this post.

Below: opinions mixed with facts; not easy to sort out which is which; but it's how I view things in the Bakken on a March night in 2013. I assume some folks living and working in the Bakken will disagree on some of the things. 

For newbies, right now, most of the activity in the Bakken is taking place in northern McKenzie County (opinion). Watford City is the county seat; its population was 1,744 in the 2010 census.

1. Population:  Currently, the "permanent" population is estimated to be 3,500. The "temporary" population is estimated to be 5,000. Regardless of the exact number, the city council has to think in terms of providing utility services to nearly 9,000 folks -- remember two or three years ago, the census was less than 2,000. And if the Bakken boom affected Watford City in 2010, then go back to 2004, well before the North Dakota Bakken boom, and the census was probably around 1,500. In the 2000 census, the count was 1,435.

Okay, so there it is: somewhere from around 1,500 to about 10,000 in the last few years.

Studies suggest the city needs to plan for a population of 20,000 permanent residents. Permanent, not temporary.

2.  Oil booms and populations: The banks and credit unions (the folks lending money for houses) work on the basis that it takes ten (10) years before temporary housing starts to convert to permanent housing in an oil boom.  Developers in the Watford City area feel they are in year six (6) of this boom. And the developers now see the conversion from temporary to permanent housing taking place, confirming what the bankers say. [By the way, I agree that North Dakota is in year six of the boom: it began in Montana in 2000 in Elm Coulee, Richland County, Montana; and in North Dakota in 2007, in Parshall, North Dakota.]

3. Drilling activity and production: If you have a Rand-McNally map, take it out and turn to North Dakota. If not, go to google maps. Find Watford City or New Town or Minot or something in western North Dakota. 

Then find Highway 23 from Watford City east to New Town; then take the road (8, 1804) up to Stanley; follow that with your index finger. Then trace US Highway 2 west from Stanley to Williston; then so south on US Highway 85 from Williston to Alexander, then west back to Watford City. Inside that "box" accounts for 80% of the Bakken production.

That "box" is about 1,600 square miles. And a lot of it is under the Missouri River.

Rhode Island is 1,000 square miles.

Bexar County (San Antonio), Texas, is 1,300 square miles.

4. I was looking for something else on the internet tonight, and ran across The Atlantic article that I linked some time ago. The author was questioning whether the boom in North Dakota was already over. 

Tonight, I happened to re-read his conclusion, why the author had suggested the Bakken boom had peaked. From the conclusion of the article:

The only large private sector category that is growing faster now than in 2011 is hotel and food services jobs, at the far right of the second graph. These jobs are lagging indicators of population growth because they respond to growing cities. 

This is how an energy boom should go, you could argue. First come the core mining jobs and manufacturing jobs. Then you build the houses and roads to accommodate the miners and factory workers. Then you open restaurants to feed their families. And you build hotels to room their visitors and petro-tourists. That's not a bust story. It's a modern growth story.

Okay, fine. Perhaps that's all the North Dakota slowdown is. Chapter Two in North Dakota's modern gold rush. The state's job creation isn't weak, after all, it's just, well, average. But that's just the problem. When you're girded for a historic gold rush, average growth isn't average news. It's bad news.

A couple of points the writer missed. First, he moved the goal posts. In his conclusion he talks about the "North Dakota gold rush." The Bakken is not North Dakota and North Dakota is not the Bakken. North Dakota is 71,000 square miles; 80% of the Bakken production is coming out of an area well less than 1,500 square miles. The writer needs to go back and re-look at the population figures: forget about "North Dakota"; concentrate on where the boom is happening -- in a very small area in western North Dakota.

The population centers of North Dakota are way outside the Bakken: Fargo and Grand Forks on the Minnesota state line; and in the center of the state, Bismarck, the capital, and the forgotten city, Mandan.

But what caught my attention in that article was the economic cliche: "...hotel and food services jobs .... are lagging indicators of population growth because they respond to growing cities." There's a difference between boom cities and growing cities; there's a huge difference between "temporary workers" and "permanent workers" and how to count them and how they affect the economy. The author misunderstands and/or miscounts temporary residents and permanent residents.

When I first read The Atlantic article some weeks ago, something about the article did not ring true, but I couldn't put my finger on it. Kent provided some of the data in paragraphs 1, 2, and 3 above; if there are errors, I made them. But it now makes sense. Now I understand better why The Atlantic article did not ring true.

Finally: if the "only" private sector growing faster now than in 2011 is the hotel and food services sector -- wow. After seven years of boom between Williston and Watford City, and "they" are still not caught up with lodging and food....what can I say. They may be lagging indicators in somebody's world but I thought two years ago, the area had caught up in lodging and food services -- in fact, I did a poll on that very subject and found I was completely wrong. Now, it's confirmed: lodging and food services have still not caught up. That simply blows me away. Six years into this and the hotel and food services is still growing faster than what it was in 2011.

I think it all goes back to how one defines a "boom." The boom may be over, but not the growth. Not by a long shot.

By the way, there is talk of a McDonald's going up in Watford City. How fitting for this story.

Here's a projection of the increase in the student (K-12) population; as much as 150% in Watford City.