Now that oil prices have been reduced the once frenzy-like Bakken activity, Watford City’s mayor Brent Sanford takes a moment to recall the past five to seven years.
“If you go back seven years ago, that’s when the drilling rigs started to move into the county and they haven’t left,” Sanford said. “The anomaly you are seeing now is we were hovering around the 40% rig count and the last time I counted we were around 57% of the rig count for the state right here.”
A rapid rush of employees and entrepreneurs filled the small town and began using the city’s services well beyond their means.
“So what you saw five years ago was a community that ballooned ten times in population from a 1500 person community and it ballooned ten times with trucking employees, drilling employees, site builders, roustabout company employees and nowhere to put them,” Sanford said. “There was no infrastructure and all these people were living in campers, literally.”
Campers, sleeping bags and public showers were only part of the story. Even back then Sanford saw some of the unintended consequences of the Bakken boom.
“We’ve operated the last few years with 40-50 percent of our kids in the school living in campers,” Sanford said. “So dad’s making over a 100K and qualifying for free and reduced lunches because they are technically homeless. It was quite an anomaly.”
By the time anyone had a handle on the situation, the horse was well out of the barn and everyone had to make the best of what their current reality was.
“To look at that situation it doesn’t seem right but that’s what it was,” Sanford said.
Today, Sanford sees Watford City as the pivotal player in the Bakken. The evolution of the play has concentrated much of the operator’s’ activity into their proximity.
“We are very much moving into a production phase of the oilfield play,” Sanford said. “There are 13,000 Bakken Three Forks wells completed now, and there didn’t used to be any of those.”
Their basic infrastructure in conjunction with the oil play’s economic sweet spots for drilling intersect in Watford City creating new opportunities for the growing community.
“Measures are anywhere from 1-3 full time jobs required for each one of them,” Sanford. “As you look at the scattered diagrams of the drilling programs there is a very heavy concentration east of Watford City. Basically within 50 miles of all direction a high percentage of the wells.”
One of the issues with the Bakken is geography. River, hills, lack of infrastructure and basic Badlands create physical barriers to entry for many of the operators, impacting the price and cost of oil extraction.
“The Missouri River puts a real hamper on the movement back and forth of the materials and employees,” Sanford said. “We have that on the east and north side, and the little Missouri to the south.”
However, those obstacles are being corrected and satisfied everyday and more companies are making the changes to their business plans to return to the Bakken.
“This is a very isolated area and we have a lot of the production,” Sanford said. “Part of the sweet spot is right here and all the sweet spot is within 50 miles. We are feeling a concentrating type movement at this point. Even the fracking and drilling companies are eyeballing Watford City.”
Sanford explained many of the people in the industry are deciding what their next move is going to be and where they are going to put their employees when they come back the Bakken.
“The Bakken’s core holdings are just north of the river south of Tioga and Stanley and just south of the Little Missouri and the Killdeer area and then across the Missouri River on the Fort Berthold Reservation. So we are right there,” Sanford said.
According to Sanford, in addition to oil extraction the movement of oil is in Watford City’s future.
“Plus we are getting more inquiries about where to put the pipelines that will be moving through with the Dakota Access pipeline and all the gathering pipelines while they try to reduce their flaring goal,” Sanford said.
The past has created a new blueprint for the future in Watford City, but today is what everyone has to live and work with. Sanford is well aware of the new normal in Watford City.
“It’s a busy place and not to say it hasn’t been rough for the last 14 or 15 months compared to what it was, a lot of business models were set up and family incomes based on what was happening the five years before,” Sanford said. “There has definitely been some reduction in all that economic volume.”
That future, however, is something hovering over every business owner, resident and public official’s head. Sanford sees this time to fill in the gaps and let the new project take hold.
“For the future we are very hopeful. We have infrastructure in the ground now. Five years ago we had none,” Sanford said. “We are ready to take advantage. We have places to house employees, place to build these operation centers, office buildings, retail facilities, etcetera,” Sanford said. “Like everybody we are kind of in a waiting mode.”
Despite the negative media towards oil and gas, Sanford remains optimistic about the industry, the operators and his community.
“The companies that are operating the wells, like Whiting and Conocophillips, built new operation facilities here because they have to have employees that work these wells for the next 50 years,” Sanford said. “So the employees who work for them expects to live in a house and be in a stable environment where they families work and kids go to school here.”
The waiting mode, however, can create situations that ripple throughout the state in a variety of ways. School funds, housing prices and basic community engineering are just a few examples of issues energy communities have to deal with while waiting for higher numbers.
“The numbers of people around here have dropped, but the school enrollment has held steady for the past year,” Sanford said. “So basically it tells me the workforce is a more permanent type workforce that has stayed and a lot of that rotational workforce has gone home for the time being.”
Even with all the money North Dakota spent on community studies and projections, Watford City is still dealing with current issues and future potential scenarios. Issues like too many apartments and too little residential homes.
“We still need to make that big jump to towards single family developments for the employers that are here now once the wells are completed and once the pipelines are in the ground,” Sanford said. “There is much less of a trucking impact today. Trucking companies are evolving into what they are going to be as a midstream company as opposed to just hauling the oil and salt water off the drilling rigs. They are evolving their employee base, their asset base.”
While many in the media and state government are talking doom and gloom, Sanford talks reality and public perception.
“As the mayor, looking at the downturn and what we need is hundreds of affordable single family homes for sale for those employees,” Sanford said. “And that is just not happening yet.”