Upside and downside of the Bakken boom – in-depth article & videos
The Telegraph has a full length article on Boomtown, USA. In addition to a great feature in words, there are 9 videos, of about 2 minutes each.
The upside of the oil boom is incredible. Lots of guys are making $100K to $150K by working hard doing difficult work. The article guesses there are 10,000 men living in crew camps. Each of them is making, by my guess, between $70k and $125K a year.
My guess is most of those guys would be making $40K to $70K if they were working back home. Assuming they even had a job. Most of them wouldn’t.
Business is booming. Consumer stores are crowded. Construction is going as fast as the city can permit projects.
Oil workers are dropping rolls of $100 bills at one particular store to put in fancy sound systems to their brand new trucks. Articles I’ve read in the past say that guys arrested in a bar fight often bail out of jail with the $5,000 cash they had in their pocket.
Ranchers who have oil under their land AND own the mineral rights are rich beyond imagination. Try doing the calcs for one well at average amounts of initial production. It’s staggering.
The city, which when it was slowly dying had a population of about 12,000, currently is struggling with population probably around 30,000 or more. Perhaps 10,000 of those are in man camps. By the way, man camps can be packed up and moved when the infrastructure of housing eventually catches up.
The expected 30,000 or 40,000 producing wells running for the next 4 decades will generate one or two jobs for every well.
Guesses in the article are for the population to eventually stabilize at the 80,000 to 100,000 range.
Then on the other hand…
A crash course of growing from 12K to 80K is going to be quite painful.
Rents are increasing, putting severe pressure on everyone, especially retired folks.
Some level of skills and drive with a dose of entrepreneurial spirit is needed to get a job. Many people are getting left behind, especially people who show up at the bus depot or train station with a duffel bag but no job or housing or contacts.
Crime is surging. Housing is scarce. Entertainment options are few.
For those with work, the work is really hard. In bitter cold you can at least put a parka and long johns under your oil slickers and layers of socks inside your boots. Still have to wear that protective clothing when it is 90 degrees with matching humidity.
Work schedules are for the young: 12 or 15 hours days, two weeks on with one or two weeks off. I’ve heard of 28 day schedules at 12 hours a day with 2 or 4 weeks off.
Infrastructure for the natural gas isn’t in place, so there is still too much flaring.
It will take time for the sewer & water capacity, housing stock, law enforcement staffing, government services, shopping options, gas collection pipelines, and entertainment to catch up. Eventually all will catch up. Few towns can increase in size by a factor of 3 or 8 in a few years without a lot of pain.
There is mind-boggling upside and painful downside.
Check out the full article and 9 videos. Superb.