Boom in northeast Montana appears to have staying power

2011-12-28T14:30:00Z Boom in northeast Montana appears to have staying powerBy JAN FALSTAD | Lee News Service Bismarck Tribune
December 28, 2011 2:30 pm  • 

SIDNEY, Mont. - When logging fell off around Kalispell, Brenda and Vance Birkey, natives of western Montana, moved 550 miles away to Sidney to work in the Bakken field, perhaps the biggest oil find in modern U.S. history.

Screwing plywood skirts around their small trailer to prepare for snow and 40-below temperatures, the Birkeys, like thousands of others, traded in the comforts of their home for a fresh start in this region's Klondike fever for oil.

When western Montana's recession destroyed his livelihood, Birkey said he traded in the mountains and his chain saw for the steering wheel of a scraper.

"We came for the jobs. Now we're out here where the buffalo roam. It's different," he said.

Richland County surrounding Sidney sported Montana's second-lowest jobless rate in October, 2.8 percent. That compares with 14.6 percent in Big Horn and 14.4 percent in Sanders counties, the state's highest rates.

The vortex of real and wished-for riches from the oil patch is sucking in workers and products and services and gushing the boom money out across Montana.

Knife River's Yellowstone Division is grading and hauling gravel to a railroad loading facility being built north of Fairview where crude oil will be loaded into 100-car tanker trains.

"The Bakken work is huge. It's massive. It's extraordinary," said division general manager Hal Fuglevand.

More than 50 Billings businesses are chasing the estimated $1.5 billion a month being spent drilling oil wells in the Bakken, straddling the Montana-North Dakota border. There are more than 200 rigs, and each one can drill a well a month at an average cost of $7 million per well.

Montana's Bakken produces roughly $1.2 billion worth of oil per year.

A steady stream of trucks haul food, gravel, scoria, sand, natural gas, crude oil, pipe, asphalt, concrete, fresh water and liquid nitrogen to keep the rigs drilling and the wells pumping.

The Bakken business has jumped eight-fold in two years at Billings' Whitewood Transport Inc.

"And we haven't even tried. It's crazy," president Mike Wilson said.

Last year, The Sage Corp. of Billings set up a special team to train more oilfield drivers, including for Canadian-based Sanjel Corp., which recently opened a Billings office.

In just three years, the Bakken has tripled sales at Aspen Air US Corp. of Billings, which hauls liquefied nitrogen. Sales at RDO Equipment Co., which sells heavy equipment, are up one-third in two years.

"Thank God it's going on because there's not much work going on in the rest of Montana," Knife River's Fuglevand said.

Last year, Big Sky Economic Development officially started marketing Billings as an energy hub and is setting up "speed dating" events to connect oil executives with local businesses.

Executive director Steve Arveschoug said he tries to envision this large-scale development five to 10 years from now.

"It's not just the Bakken, it's coal and natural gas," he said.

The first unit-train hauling crude to Louisiana left Dickinson, on Nov. 9.

Within a 35-mile circle around Bainville, oil companies are investing $500 million to $1 billion to build two oil loading facilities and a natural gas loading plant, according to Bainville Mayor Dennis Portra.

The unprecedented growth leaves Portra happy, but wary.

The 52-year-old native has lived through two previous oil booms and busts. He remembers when crude prices plummeted in the 1970s and the drillers immediately dropped pipe and left town.

But this boom feels different, Portra said, because of all the infrastructure being built, including a proposed small refinery over the state line near Trenton, N.D., where Lewis and Clark once camped.

"You don't build a railroad siding for short-term gain," he said. "It costs really serious money."

Somewhere to stay

Don't chase the oil boom money or jobs unless you have a place to stay. Rents have doubled and tripled in the Bakken's boomtowns.

Hotel rooms are booked solid months in advance, forcing travelers to drive on and on to Glendive or even Bismarck. Companies must rent or buy trailers or RVs and scramble for a place to park them. A parking spot with no water or sewer hookups in Froid costs $1,000 a month.

For the first time in its history, Billings-based Stockman Bank may have to provide housing for its workers in Sidney so the two loan officers being hired have a place to live.

Century Companies Inc. of Lewistown has built and paved roads in eastern Montana for nearly three decades, but this boom has doubled its oil field business.

"There are people from every state now. They are swarming the place," said Century president Tim Robertson, who has hired 30 more workers.

The boom is spreading west along the Hi-Line.

"Wolf Point has never seen this activity. It's crazy," said Rick Isle, the city's public works director.

With 350 oil companies working the Williston basin, the demand for services seems endless.

 

  • Double-Tree Inc., of Bozeman, is building a sewage treatment plant north of Tioga, N.D., and is talking to three eastern Montana cities about expanding their sewage lagoons.
  • Man camps have popped up at virtually every turnoff or farm yard.
  • Blaine Rogers' Door Bust'n Portable and Septic Service in Sidney now delivers and maintains 428 toilets, five times more than three years ago.
  • Sidney has three motels and is building three more. But before contractors can start building the Microtel Inn & Suites, they have to build a dormitory for the builders.
  • High wages attract workers and drive up pay at other businesses. Most shops along Sidney's main drag are closing early due to a scarcity of workers.
  • Since October, McDonald's in Sidney routinely closes its lobby, so the minimal staff can handle all the drive-up orders.
  • Hoogie's Car Wash in Billings has seen its business triple.

Industrial cleaning of tankers and oil field equipment now provides 75 percent of the work at Hoogie's. Last year was the best in 31 years, said owner Don Haugan. By June of this year, he'd topped that record.

An Illinois trucking friend told him there are more trucks rolling through Williston, now than in downtown Chicago.

"Casper (Wyo.) used to be the king of the oil industry, but I think Billings serves that role now," Haugan said.

Billings Gazette reporter Jan Falstad can be reached at (406) 657-1306 or at jfalstad@billingsgazette.com.

Copyright 2015 Bismarck Tribune. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

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