What the boom of energy development in the Bakken — and development and exploration west and south of Havre — eventually will bring is unknown, so local leaders are working to plan for the best and the worst.
Oil development has caused a population explosion in western North Dakota, with some communities growing as much as four or five times in size. Dore, N.D., just east of Sidney, has grown from population 2 to nearly 50 — with the original two residents ready to move out.
Sidney and Glendive and other Montana communities in the region are seeing explosive growth and the benefits — and problems — it brings, with other indirect impacts spreading across the state and nation.
Those indirect effects also are happening in Havre.
Planning for expansion in Havre
A group of local political, economic and community leaders met at Bear Paw Development Corp. in Havre last Friday to talk about what could and should be done to prepare for a potential local boom from the energy development in the Bakken oil formation — along with oil, gas and wind development in the Shelby area and farther west — spilling over into Havre.
Most say Havre is unlikely to see growth like in Williston, N.D., — a region where oil extraction in the Bakken has pushed North Dakota to the second-highest oil-production in the state, only behind Texas — but they want to be ready.
Tom Rolfstad, executive director of the city of Williston’s Economic Development Department, said the lesson to be learned from his city is to be ready for anything.
“We’ve seen it all, ” he said. “It’s probably easier to tell you what we haven’t seen. ”
Williston struggles with growth
Rolfstad said the population has exploded, as has economic activity.
Local officials expected the town of about 12,500 to double, he said.
“Now, we’re … saying we’re probably going to be 50,000, and some are saying even above that, ” Rolfstad said.
The increase has created problems along with its benefits. One is an increased need for businesses and services.
“Dentists and doctors and attorneys and accountants … shoe shops and houses and pretty much everything, ” Rolfstad said. “When you double the size (of the town) you’ve got to pretty much have another of pretty much everything. ”
Oil companies will take action to make sure their workers have a job and a place to stay, but won’t make sure those dentists and doctors and shoe shops are available, he added.
To compound the problem, the high wages paid in the oil fields are taking people, employees, away from jobs in support services.
“They don’t do anything so much to make sure we have employees at the newspaper, let’s say, or at the restaurant, ” Rolfstad said. “In fact, if anything, their wage scales kind of suck those people away. ”
That doesn’t mean people aren’t showing up for jobs.
“My job service has 160 to 200 people a day coming in looking for work, ” Rolfstad said.
Finding a place to stay
Another issue is housing. Rolfstad said investors and developers from around the country are coming to look at erecting housing, and other investments — “it’s just a constant stream of them” — but the demand still outpaces the supply.
Rents in Williston have been reported to triple in the last few years, with one-bedroom apartments running about $1,500 a month and two- or three-bedroom apartments often double that.
Rolfstad said it spills over to hotels — the cheapest room someone could find would probably be $100 or more a night.
“If you can get a room, ” he added, explaining that they could be booked out months in advance.
But one of Williston’s foci has been on increasing family housing and attracting more families to the area, which also could bring more workers outside of the oilfields, Rolfstad said.
Some of the stories about what the Bakken expansion is doing in the Williston area may be slight exaggerations, including the increased crime rate.
That issue, which led to a multistate law enforcement forum in Glasgow, was highlighted by the kidnapping and murder of Sidney schoolteacher Sherry Arnold in January. Two men who reportedly moved to the area to find work in the oil fields are charged with kidnapping and murder in that case.
But Rolfstad said that, while the population increase has brought an increase in crimes in the Williston area, media coverage may be slanting its severity.
The number of calls to law enforcement has increased dramatically, but so has the number of people in the area, he said. The actual seriousness of the crimes committed has not increased.
“The media has portrayed this like, if you’re coming out here, you’re coming to the front line of Afghanistan, ” Rolfstad said.
In reality, he said, people come to town and leave saying they ran into a pretty nice little town, and that it was a lot safer than they expected.
“(The crime) has not gotten harder or more severe, there are just more incidents, ” he said. “Can you find some guys going to have a fight outside of the bars? Sure, but we had that in the old days. ”
Ridership on Amtrak
The attraction to Williston also seems to be making passenger rail transportation attractive. Rolfstad said the number of people getting off the Empire Builder has grown steadily. Part of the usage of the Empire Builder is commuters.
Many of the workers in the Bakken will put in about two weeks straight, often working up to 20-hours-a-day during that time while staying at the oil field mancamps. They then will have two weeks off.
People are riding Amtrak to put in their two weeks in the Bakken, then ride home for their time off.
The number of people getting off the Empire Builder at the towns of the Bakken have grown exponentially.
An Amtrak release said the ridership at Williston and Stanley, N.D., is expected to double this year from last year’s ridership due to increased demand from the oil boom.
At Williston, the ridership has grown from 13,328 in Fiscal Year 2002 to 29,920 in 2011, and expected to hit 58,500 this year. That would increase revenue at the Williston stop from $1.1 million in 2002 to an estimated $7.5 million this fiscal year.
The numbers in Stanley are smaller, but the growth just as dramatic.
In 2002, Stanley station saw 2,112 riders with just more than $154,000 in revenue. In 2011 that grew to 6,146 riders and nearly $665,000 in revenue, with 2012 predicted to bring 11,900 riders and nearly $1.4 million.
The top points of origin for both stops are Minneapolis-St. Paul, followed by Whitefish, with Spokane, Wash., coming in third.
And the demand for transportation has spread farther and created other opportunities. A group in the Missoula area is starting a bus service to take passengers from Lolo, south of Missoula, to the Bakken and back, picking up and dropping off passengers at points in between.
Impacts across the state and nation
The effect of demand in the Bakken area is also drawing some people from Montana with interests other than oil. Rolfstad said a few examples include a man who ran a pizzeria in Big Fork moving to Williston to bake pizzas there, and brothers from Bozeman opening a sandwich shop in the town.
Other Montanans — including from the Havre area — are taking advantage of the demand created by the energy industry expansion while keeping their operations at home.
Rolfstad said that goes far beyond Montana. The oil boom is creating industries literally spending billions of dollars a month in the Williston area, with much of the purchasing spread to businesses across the country.
That spending could spill over to communities like Havre, he added.
“You just never know, ” Rolfstad said.
Growth in Shelby region, exploration near Lewistown
In the area from Shelby, Conrad and Cut Bank to Browning, two separate energy industries are driving an economic pickup — oil and wind.
New wind farms are springing up from the Rocky Mountain Front east, and new extraction techniques are reviving interest in oil fields that have lain mostly dormant for decades.
While no production boom yet has been reported, those extraction techniques also are raising interest southeast of Havre, where increased exploration is occurring in the Lewistown area.
But wind farm creation in Glacier County and east has been occurring for several years now and is continuing. Shelby Mayor Larry Bonderud said 800 people are expected to be working on different wind farm projects by the end of the year.
Bonderud said increased oil exploration and production also is occurring near Shelby, Cut Bank and on the Blackfeet Indian Reservation. While it won’t be like the Bakken expansion, it is significant.
“You know, for instance, those Bakken wells are coming in at 68,000 barrels a day, and the first shows here that we’ve seen are 800 barrel a day, ” Bonderud said. “But an 800-barrel-a-day well here is gangbusters and still will spur on a lot of the local development and (help) the local interests. ”
He said the area is ready for the increase in people and welcomes the development.
While housing is short, and rental rates are extremely high, the region as a whole is absorbing the increase in population, Bonderud said.
Reports are coming in that communities as far away as Brady, south of Conrad, are seeing rental rates going to more than $1,000 a month.
But Bonderud said the area already experienced that kind of temporary growth in earlier wind farm development. The rents went up, and the landlords experienced an economic boom of their own. When the projects were completed and the workers left, the rents rolled back, he said.
Toole County also has consolidated law enforcement and fire departments, with combined city and county operations, which allows for a fast response in case of emergencies, he said.
And the infrastructure is ready, Bonderud said.
“We have spent 40 million on infrastructure in the last 20 years, and our water, sewer and street systems are in very good shape, and so we look forward to this impact, of which we have planned for and can easily accommodate, ” he said.
State highways under examination
One concern, raised at several recent meetings in Havre including Friday’s planning meeting, has been the impacts of the trucking that takes materials to the oil fields.
Montana Department of Transportation already is looking at the impacts of that trucking.
MDT has hired a firm to conduct a study, with the purpose of setting a model to predict where expansion is likely to occur, predict the amount of traffic on highways in the state, and estimate the funding needed to upgrade and maintain the highway systems.
The timeline for that study, which the Upper Great Plains Transportation Institute of North Dakota State University in Fargo, N.D., is preparing, calls for presentation of the summary and results on Sept. 15 this year.
Impacts already seen in Havre
No one knows what the impacts of the oil industry surrounding Havre finally will have on the community, but some benefits already are here.
While no one seems to expect a population boom like in the Williston area, or even the Shelby area, Bear Paw Development Corp. Executive Director Paul Tuss and Havre Area Chamber of Commerce Executive Director Debbie Vandeberg both said they have talked to Havre landlords who have been contacted by Bakken workers.
“The caveat is, I just know two of these instances, ” Tuss said in an interview. “My guess is that there is far more of those, but I do know that that’s happening. ”
Ron Brenna, president of Havre Laundry & Dry Cleaning Co., knows more as far as his business goes.
Brenna said his business has picked up from energy development for the last 18 months. He now is exploring the possibility of adding another route to go through Sidney and Glendive and into Williston to pick up clothing to bring back to Havre, launder and then return.
Brenna said his business has worked in cleaning specialized clothing for the energy industry on the Hi-Line for many years and has in recent times expanded its operations farther east and west.
Havre Laundry deals in supplying and cleaning special fire-retardant clothing required for working in the oil industry and that is increasing. The work includes picking up clothes on its regular routes, but also from people riding the Empire Builder to and from the Bakken.
Brenna said, for example, one man who lives in Eureka drops off his laundry order when the train stops in Havre, then, two weeks later when he is riding the train back to the Bakken, stops and picks it back up.
He said Havre Laundry provides a needed service in short supply in the Williston area and surrounding region and is able to clean the specialized, highly expensive coveralls, which are normally royal blue and weighing 3 to 4 pounds, but generally black from head-to-toe and weighing 20 pounds when dropped off or picked up.
Anecdotally, other residents and businesses in the region also are participating, including in Havre.
Bonderud said, for instance, several Havre residents have purchased rental properties in Shelby and are in the process of rehabilitating them and renovating them, that is providing a business opportunity for the Havre entrepreneurs and much-needed housing in Shelby.
Montana State University-Northern also is right in the mix. Chancellor Jim Limbaugh has announced that the university is working with the state Office of Economic Development, the Montana University System and Sen. Max Baucus, D-Mont., in separate but related efforts to look at providing services and training to people in the Bakken.
Friday’s story in this series will look at what local leaders are speculating could come to Havre, and what they will do to prepare.