Road Tripping Along North Dakota's Oil Bust Alley
Dickinson, North Dakota is a very different place than it was two years ago, when this oilfield town of less than 30,000 people was one of the fastest growing cities in the country. Since then, the price of oil has fallen by more than 50 percent. Nowhere are signs of the slowdown more visible than along Dickinson’s Highway 22. I decided to take a road trip to see what had changed along oil bust alley.
I began my drive on the north end of town, where the oil-fueled sprawl of new apartments and industrial parks fades into what western North Dakota used to look like: rolling prairie and wheat fields. In the past 18 months, one of these fields has become a kind of graveyard for drilling rigs that are sitting idle, waiting for the price of oil to rise.
They look like a platoon of skeletons, standing in neat rows behind a chain link fence. I pulled off the highway to get a better look and counted 27 of them. That's the same number of rigs that are actively drilling for oil in the Bakken oilfield as of today, May 11, 2016. Two years ago, when the price of oil was over $90 a barrel, there were more than 190 active rigs.
Every time a drilling rig gets stacked, about 120 people lose their jobs. Nationwide, there have been nearly 100,000 oilfield layoffs in the past two years.
Kaley Haugen’s husband was one of those let go. He worked on a drilling rig for 11 years as a well site geologist, "but even that doesn’t save you when the price of oil is down so far," she said.
Things have been tight – especially since Haugen is a brand-new small business owner. A year ago, she opened the Uniform Unit just down the highway from the rig graveyard. She sells flame-resistant clothing to oil workers, scrubs, and tactical clothes to police and fire departments. Haugen just missed the tail end of the oil boom and things have been very slow, forcing her to rely more on non-oilfield sales than she originally thought.
"When we do have (oilfield) customers, they are looking for more of the bargain clothing," she said. "Some of the (flame-resistant) sweatshirts can range from $230. Those ones are not moving as quickly right now."
Just south of the Uniform Unit, the commercial development along Highway 22 becomes more dense as you approach the city center. I drove past hotel after hotel, muddy trucks sitting in their half-empty parking lots. Dickinson added almost 1,000 hotel rooms over the past five years, and for a while it seemed like a good move.
Bill Evans moved to Dickinson in March 2014 to do maintenance at three small hotels. At the time, there were no vacancies.
"If somebody checked out, you probably already had somebody’s name who was waiting on that room," he said, chuckling.
Rates were much higher, too: $80 a night for a single room, more than $100 for a double. And that was at Evans' lower-end, older hotels. The nicer, newer hotels built explicitly for the oilfield were charging much more. Now, Evans' guests are paying $32 a night.
Connie Hank is the general manager of the hotels where Evans works. She says they’re only 30 percent full right now, leaving her with a lot of time on her hands.
"I’m sitting here waiting, praying that a car will pull into my parking lot," she said, laughing. "We look like a bunch of vultures, the minute they walk into the door, like, 'Hey, thank you for coming here!'"
All those oilfield layoffs have actually been good for other businesses along Highway 22. Take TMI Systems, which makes custom cabinets and countertops. At the height of the boom, the 400+ employee company lost over 60 employees to the oilfield. And Dickinson's exorbitant rents – in March 2015 the average rental was $1,650, according to Trulia.com, – made it hard for the company to attract new employees.
Scott Weiand is one of those who left. He wanted more money and a new challenge, but found his oilfield job, loading crude oil onto rail cars, more stressful than he anticipated. "We would put oil into tank cars at 20 barrels a minute. That’s a lot of fluid being transferred. A lot of things can go wrong in a short period of time," he said.
He left that job as the oilfield was beginning to slow down in summer 2015, and set his pride aside to return to TMI in March 2016 as a cabinet assembler. Since 2015, TMI has hired back 10 former employees, plus another 10 laid off oilfield workers.
Weiand misses the high oilfield paychecks, but not the frenzy – which sums up how many people along Highway 22 in Dickinson feel about the downturn. They’d like to see the oilfield activity come back, but not quite as crazy as it was before.
On my way out of town, I swung by the Taco Bell to see how things had changed there. Two years ago, the only way to order food here was at the drive-through: the restaurant couldn't hire enough workers to staff the inside seating area, and there was a small paper sign on the restaurant door that instructed people to go through the drive-through instead. But today, Taco Bell is fully-staffed, inside and out. I ordered nachos.