More signs the North Dakota infrastructure is catching up
If you let an economy function, market forces will create pressures to smooth things out. The forces of supply and demand have an amazing ability to balance a temporarily unbalanced marketplace. Several recent articles illustrate this concept in North Dakota.
11/17 – Amy Dalrymple at Dickinson Press – Pipelines now outpacing trucks for gathering Bakken oil – After oil is pulled on the ground it needs to be moved from the well pad to either a rail-loading terminal where it leaves the state by rail or it gets moved to a major transmission pipeline where it leaves the state by pipe.
The oil is initially moved by either trucks or underground pipes.
The number of small gathering pipelines to carry oil away from the wells is finally large enough that more oil is moved by gathering pipelines than by trucks.
As an indicator of progress, the number of trucks moving oil is about the same in 2015 as it was way back in 2012. By my calculation, the average monthly production in 2015 is up 78% from the average monthly production in 2012. That there has not been a 78% increase in the amount of trucks moving oil shows the amount of gathering pipelines that has been installed in the last three years.
Eventually the infrastructure will catch up with the radical increase of oil generated by the shale revolution.
11/30 – Dickinson Press – Market forces close one of Williams County’s largest man camps – The Capital Lodge, a man camp between Ray and Tioga, has closed up due to low occupancy. Company owning the facility tried to convert it into an extended stay hotel but the county did not approve the necessary zoning change.
The facility had permits for over 2000 beds. Article says recent occupancy was 100. It has its own on-site sewer treatment.
With the drop in drilling and pulling back their remaining rigs to the best locations, the need for thousands of workers out towards the Tioga area has dropped. As a result the demand for beds in that area has dropped. As an expected result, facilities are closing up.
That is exactly what a free market does. Assuming you are willing to let the free market work.
12/1 – Bismarck Tribune – Largest man camp could transition into family homes – A few more tidbits about the Capital Lodge, which has closed.
Article says the facility cost $40M to build. It was licensed for 2,000 beds or more.
At one point, Williams County had 12,000 licensed beds in man camps. Current count is under 2,000. That excludes the count of beds inside Williston. For context, 12,000 beds would make a larger community than the population of Williston before the boom started.
Previously mentioned there were 3,600 beds under authority of Williston.
Working with just those two numbers, that means there were 15,600 beds in Williams County at the peak.
P.S. Even though I have been past it multiple times, I do not have any good photos of the Capital Lodge facility.