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NORTH DAKOTA - Oil Bust Alley

"A stretch of North Dakota highway witnesses oil's boom and bust" PBS NewsHour 8/2/2016


SUMMARY:  Oil prices have been dropping since the industry's boom in 2014, and with that decline comes economic uncertainty for oil towns like Dickinson, North Dakota.  Over 180 rigs drilled at the nearby Bakken oil field two years ago; only 27 remain active today.  The slowdown has taken its toll on all sectors of business, from the housing market to hotel occupancy.  Inside Energy's Emily Guerin reports.

GWEN IFILL (NewsHour):  But, first:  a report on the Bakken oil fields in North Dakota, where employment and the economy are directly affected by the price of oil.

Oil prices have dropped since their peak in 2014, and drilling has slowed, idling rigs and sending the once booming economy into uncertainty.

Inside Energy's Emily Guerin takes us on a tour of Oil Bust Alley, a short stretch of highway where the boom and bust of the oil industry plays out.

EMILY GUERIN, Inside Energy:  I have spent two years reporting on the Bakken oil field in North Dakota.  I have seen it when it was booming, back in 2014, and now, when it's busting.

There's one highway in the oil field town of Dickinson, Highway 22, where you can see the entire boom and bust story.  So we're going on a road trip through Oil Bust Alley to see what we can learn in this five-mile stretch of road about how a community changes when the price of oil crashes.

Let's start with the obvious losers, businesses directly involved in the drilling and production of oil.

So, I'm standing in front a field of stacked drilling rigs.  There's about 27 back there.  We just counted.  And that's actually about the same amount that are actively drilling for oil in North Dakota.  Two years ago, when the price of oil was high, there were over 180.  And it's really a sign of how much things have slowed down here in the oil field.

Every time a drilling rig gets idled, about 120 people lose their jobs, people like Kaley Haugen's husband, who worked on a drilling rig for over a decade before being laid off last year.  Haugen has also seen a huge impact of the slowdown on her business, the Uniform Unit, which is right on Highway 22.

KALEY HAUGEN, Owner, Uniform Unit:  We do uniforms for a variety of industries.  We do flame-resistant clothing for the oil and gas industry, as well as electrical.  We do scrubs, medical uniforms, and then we also have brought in tactical for EMS management services.

EMILY GUERIN:  The Uniform Unit just opened last spring, right as oil prices were tanking.

KALEY HAUGEN:  If we would've been operating two years ago, three years ago, I would bet 90 percent of our business would have been oil field.  Now I would say we're pretty even within the different fields.  I mean, I would say 30 percent oil fields, 30 percent tactical, 30 percent scrubs, so definitely different than I thought.

EMILY GUERIN:  Hotels have also been hit hard by the slowdown.  Over 1,000 new hotel rooms were built in Dickinson in the past 12 years.

Connie Hank and Bill Evans manage and do maintenance in three of those hotels just off Highway 22.

BILL EVANS, Hotel Maintenance Worker:  When I got here in March of '14, there were no vacancies.  If somebody checked out, you already had somebody's name who was waiting on that room.

CONNIE HANK, Hotel Manager:  You would've been paying $80 a night for a single and almost — just about $100 for a double.  That was cheap.  And now you can get a room for $32 a night.  That's a big change.

BILL EVANS:  Drastic.

EMILY GUERIN:  Now their three hotels are at less than 30 percent occupancy.  They end up with a lot of time on their hands.

This post first appeared on Mage Soapbox, please read the originial post: here

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NORTH DAKOTA - Oil Bust Alley


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