Editor's note: This is the second of two stories about the impact of the oil and gas business on the local economy.
Jared Ritz
Havre Daily News
jritz@havredailynews.com
When most people think of the oil and gas industry, the image that comes to mind is big-time Texas suits and the people they bring with them. The image that should come to mind is that of the person next door.
Many area residents are getting a direct benefit from the healthly local oil and gas market.
”The people of Hill County don't realize the impact natural gas has on this county,“ said Lynda Patrick-Hayes, a former Chamber of Commerce executive and now spokeswoman for C&C Excavation Inc. in Havre. ”It's a quiet industry, and most people don't realize that a constant, continual growth is occurring.“
Lots of local companies report an increase in jobs and revenue because of local growth in oil and gas development.
In fact, anyone who lives in the Havre school district has saved some money because of oil and gas activity in Hill County.
On Aug. 9, the Havre school board approved a final budget that did away with a $100,000 tax increase approved by voters in May because of increased revenue from oil and gas production in the district.
Oil and gas money ”assisted the district in our entire revenue picture and ultimately helped us not to have to use the property taxes that were approved,“ HPS Superintendent Kirk Miller said.
All together, school districts in Hill County took in $2.25 million in oil and gas tax money in the 2004-05 fiscal year. HPS' $1.2 million share is the largest amount of money Miller has seen the district get from the industry in a long time - at least five years, he said.
Blaine County schools similarly benefit. They received $1.43 million in revenue from oil and gas in fiscal year 2003-04, and $1.38 million for fiscal 2004-05. The five districts that have oil and gas production within their boundaries receive most of that money, but the county's other five districts also get some money through retirement and transportation funds, Blaine County Treasurer Wenda Oehmcke said.
The situation when Art Kleinjan first joined the Blaine County Commission in 1983 just about mirrors the situation today, he said.
”We were running in the neighborhood that we are now,“ he said about tax revenues from oil and gas. In fiscal year 2005, Blaine County took in $2.49 million in oil and gas tax revenues, which is more than a third of the county's total revenue. Add that to the royalties Blaine County receives from wells that tap resources owned by the county and a chunk of the proceeds from mining on federal lands within the county, and oil and gas brings in nearly half of the county's operating budget, Kleinjan said.
In the first years he took office, though, the rosy picture turned dark. The industry took a nose dive.
”We lost a third of our revenue in a period of two years,” he said.
With so much money gone in a flash, continuing regular operations was a difficult - but necessary - task. The county tightened its belt, raised taxes, and waited out the dry period, he said.
”The last four or five (years) have been pretty good again,“ he said.
With such a marked increase in activity, many area businesses are feeling positive effects.
Tom Patrick may not be an oil or gas man, but he may as well be. Without that industry's increased presence in the area, his construction company wouldn't do half the business it does now, he said.
Patrick Construction first started doing business with the oil and gas people in 1989, Patrick said, helping to hook up new wells, extend pipelines, haul water, build access roads, dump gravel, and just about anything else needed when setting up a natural gas well. At the time, he had 35 people on Patrick Construction's payroll, more than ever before. Shortly after, the work slowed down and he had to downsize to 20 employees.
About four years ago the work started coming back, and in the past two it has completely returned, and then some, Patrick said. The company now employees 42 people, with an average two-week payroll somewhere between $85,000 and $90,000, he said.
”Without the oil and gas, we'd have about half that,“ he said.
C&C Excavation Inc. in Havre opened in 2001 with four employees. Now it employs 30, said the company's public relations manager, Patrick-Hayes. The company does preparation and cleanup work at drill sights, and helps connect wells to pipelines.
Patrick-Hayes, executive director of the Havre Area Chamber of Commerce from 1984 to 1987, thinks of Havre's economy as three-pronged - agriculture, the railroad and natural gas.
”I've always maintained that Havre always stays the same because we have those really influential industries,“ she said. ”Havre is really lucky, because if one of those industries is down, the others are up.“
In the last year and a half, Doug Bruner has seen a 300 percent increase in business for his Chinook-based Faith Drilling, he said. His company furnishes people and equipment to drill gas, oil and deep water wells.
To keep up, he's hired two new crews, and his employee count is 50, up from 32 at the end of 2003.
Like others, Bruner thinks the increase isn't good just for him.
”It's got to help (the whole community),“ he said. ”A lot of people are coming to town. Maybe it'll put a few kids in school, (and) a little spending money downtown.
”It's definitely picking up. (I) hope it does more for the churches than it does for the bars,“ he said.
Midfield Supply is a Havre-based oil and gas industry supply store that sells pipes, valves, fittings, and other items. Bruce Johnson, who has managed the store since January, said business has gone up about 30 percent in the past year. Because of this, the store has doubled its staffing, and now have four people.
Bob Sharples, owner of the Chinook Motor Inn, said oil and gas has provided him a steady supply of business over the last five years.
”You can almost count on it,“ he said.
Morgan Jensen is the sales manager at the TownHouse Inns in Havre. Since she started in May 2004, she's seen many different seismic and drilling crews call the TownHouse their temporary home, sometimes for as long as two months. The largest crew she's seen took up 20 rooms.
”We like to take care of them because they are really good to us,“ she said.
