From Boom to Bustle: The Transition of the North Dakota Economy

Published November 7, 2014

The North Dakota oil boom is over. At least that was one of the recurring talking points at the North Dakota Petroleum Council’s (NDPC) annual meeting in Dickinson, North Dakota about a month ago. As the oil field has matured, life in the Bakken has started to become “more normal.” This shift has caused policymakers and local residents to change the way they talk about economic growth; as the boom has turned to bustle, the term “boom” has been replaced by “sustained growth.”

The idea of a boom implies an impending bust. This reality is not lost on policymakers and local residents who remember North Dakota’s two previous rendezvous with oil production, during the 1950s and again in the late 1970s and early 1980’s. At that time, western North Dakota towns such as Williston experienced rapid, substantial growth. A few years later, however, oil prices crashed, and the oil industry pulled out to explore more productive fields, leaving the area economically depressed.

Such a scenario may not be repeated this time. Officials at the NDPC meeting predicted the drilling phase (which is the most labor-intensive) of the current upsurge in oil production will continue for 15 to 20 years, creating 60,000 drilling jobs during that time. As many as 50,000 wells could be drilled in the state in the coming decades, with each of these wells requiring 2.2 people to maintain it throughout its lifetime, meaning the wells could employ 110,000 people.

However, a major concern for businesses big and small in what has been called the “Sutter’s Mill of the 21st century” is finding and retaining enough workers. In fact, in September¬†there were 26,000 job openings in North Dakota. One of the main problems many companies are experiencing is the exodus of experienced workers leaving after working in North Dakota for six months or a year because they no longer want to be away from their families.

In response, companies, workers, and developers are placing a greater emphasis on building communities, and the process of “domesticating” what had been described as the Wild West has already begun. Gone are the days when solitary oil workers made their homes in tent cities or vehicles parked in Wal-Mart parking lots. Hotels, apartment buildings, and single-family houses are rapidly turning what used to be the outskirts of town into family-friendly suburbs.

Other amenities geared toward building a stronger sense of community are also taking root in the Bakken. New hospitals, schools, community centers, and parks are being built, providing people with greater access to medical care and expanding opportunities for education and recreation. Foundations for strip malls, banks, and home improvement stores are being poured as the next generation of middle-class families begins to settle in to their new surroundings.

Growing pains persist, however. Although there has been significant progress in building housing for the influx of people searching for opportunity in North Dakota, rents are still high, and some of the people I spoke with lament the lack of things to do in town. One person in Williston said, “All there is to do here is work.”

Despite the growing pains associated with rapid development, and the recent downward trend in oil prices, officials at the NDPC annual meeting expressed optimism. They say the economic outlook for North Dakota is still bright, and these low oil prices and high rents are likely to be only short-term hiccups on the road from boom to bustle.