Chaos is self organizing.
But before getting to the story, here are some dots that need connecting:
- During my last visit to the North Dakota oil patch this past summer I wondered about the hodge-podge of activity that seemed chaotic.
- Then, and completely separate, we all remember the day the Williams County abruptly and unilaterally shut down all truck traffic on county roads. (That didn't last long; a phone call from the Tesoro refinery in Bismarck ended that debate.)
- Recently the state announced oil impact funds for villages, towns, and cities affected by the oil boom. Tioga was to receive almost $8 million.
- A recent article suggested that the Bakken may be the largest industrial park in the United States.
Now, that you have the dots connected, quick, name the multinational industrial corporation that is the face of the Bakken. Exxon? Halliburton? Chevron? Name the multibillionaires running the show.
No, the face of the Bakken is Continental Resources, until recently headquartered in Enid, Oklahoma, the ninth-largest city in Oklahoma, one of the least populous states in the country. (CLR has announced it is moving to Tulsa, OK, the second-largest city in Oklahoma.)
CLR, with a market cap of under $10 billion, is not in the same league as Exxon or Halliburton, and yet, we are being told the Bakken may be the largest industrial park in the United States, the second-largest industrial park in North America, second to the Alberta oil sands.
And who are the folks running the show with regard to policies and regulations? County commissioners. With all due respect to these hard-working county commissioners, their county commission work is a part-time job.
I was in Williston the day the county commissioners put a moratorium on all county road truck traffic.
I had heard that the state was ready to distribute up to $100 million to villages, towns and cities, mostly for highway and sewer and water upgrades.
Again, with all due respect, think about a few part-time folks in Tioga charged with contracting $8 million for roads, sewer, and water.
My first thought: the state should have contracted with a multinational industrial corporation with experience in multi-billion dollar industrial parks. Like Halliburton.
Of course, that's not gonna happen. An opportunity lost.
But maybe we are starting to see some chaotic activity that is organizing.
This is a long, long story, but I think it is worth following.
It is my understanding that in 2008,
the Bismarck city fathers put together an industrial park to partner with Bobcat, with the expectation that Bismarck would privatize the industrial park and Bobcat would have first option to buy.
The Northern Plains Commerce Centre, completed in 2008, was designed to be an industrial park and intermodal facility to handle Bobcat Co.'s overseas shipments of freight containers, with rail service connected to ocean transportation. The city provided $5 million from its economic development Vision Fund to build and develop it.
On April 27, 2011 (just a few months ago),
The Bismarck Tribune ran a story that said
the city was ready to privatize the industrial park (same link as above).
The industrial park is huge, in geographic size, and potential, as a transportation hub at the southern entrance to the Bakken, and as a stretch, the eastern entrance to the Niobrara and the Powder River Basin.
The Northern Plains Commerce Centre (NPCC) encompasses 243 acres. Offering both rail and non-rail served industrial sites, the NPCC has access to Canadian Pacific Railroad and the Burlington Northern Santa Fe.
Highway access to I-94 is less than 5 miles on roads that were designed for heavy haul and dimensional cargo.
The park is a rail served industrial park offering rail and non-rail served sites for expansion and new manufacturing/distribution. The NPCC Transload offers transloading of rebar, pipe, poles, pilings, sheet steel, lumber, precast concrete structures.
Privatization has begun.
Bismarck and Tubular Transport & Logistics, a rail transloading and distribution company based in Rifle, Colorado, recently approved an 18-month lease agreement of $184,500.
The initial lease-to-buy contract includes seven acres now, and an option to buy another 29 acres down the road.
TTL will unload and deliver rebar lumber and rebar, and broker tubular material to the the Bakken formation. It started operating on the NPCC site on Aug. 1.
Now, it gets interesting.
Today,
The Bismarck Tribune breaks the story today that Bismarck city commissioners are going into closed session to begin discussions on how to negotiate with the second largest construction company in the world, LaFarge, which already has an operation in the park.
Here's the interesting quote, from Brad Beyer, territory manager for the North Dakota division of the company:
"We (LaFarge) have a lease with the NPCC," Beyer said. He said now that the NPCC is leased with TTL, "We want to see what our options are."
Here's another interesting quote that ends the Tribune story:
Neither [the city] nor Beyer would reveal how many acres were being considered in the lease with LaFarge. Beyer said the company will announce that later if a lease agreement is reached.
Why is that interesting? Like TTL above, are we talking a lease-to-buy option? Why is the city still talking leases when the city says they want to privatize the park? Is LaFarge big enough to run the entire park? Would they want to?
The point is this: at some point, the North Dakota oil patch needs to see some big name, well-capitalized, international corporations that are willing and able to coordinate the hodge-podge of chaotic activity that is occurring in the western part of the state.
By the way, the second paragraph of that Bismarck Tribune story:
LaFarge is the second largest construction company in the world, said Brad Beyer, territory manager for the North Dakota division of the company on Monday.
According to Wiki, LaFarge is the second largest cement manufacturer in the world, not the world's second largest construction company. Was that a typo? Did Beyer misspeak? Is LaFarge the second largest construction in the world? That would put it behind Halliburton, I would think. LaFarge has only a $8 billion market cap, so I think "second-largest construction company" is incorrect. (HAL is $40 billion market cap.)
Remember, in 1864 Lafarge signed its first international contract for the delivery of 110,000 tonnes of lime to the Suez Canal construction project.
Bottom line: this could be just one more story of hodge-podge chaotic growth in the oil patch, or it could be huge. I'm hoping for the latter, but most likely the former.