MEDIA MONDAY: Economy Booms in the North Dakota Oil Fields

By Teri Saylor

Editor’s Note:  This is first in a series of stories about newspapers serving their communities in the Bakken Oil Field of northeastern North Dakota, where an oil rush is creating extravagant population growth and an (almost) out of control economic boom. Working for the National Newspaper Association’s Publishers Auxiliary, I spoke with the publishers at four newspapers. Here is an introduction and the first installment:

 

Black gold. Liquid loot.

North Dakota is booming thanks to a horn a plenty of oil in its northwest corner.

While the nation is saturated with news of rampant home foreclosures, employee layoffs, government cutbacks, and double-digit unemployment rates, the “Peace Garden State” is bowing under an economy that has grown so fast, the area can’t to keep up.

Where newspaper classified advertising is shrinking, newspapers in the oil field are doubling their classified pages.  Where reporters, ad directors, and production staff are being laid off across the country, in North Dakota, the newspapers need more workers.

In North Dakota, around the oil fields, fast food restaurants offer $15 an hour to attract employees. Local governments are issuing building permits for new construction as fast as they can approve them.  .

Oil has been a huge shot in the arm for the State of North Dakota from a tax standpoint,” North Dakota Newspaper Association executive director Roger Bailey said. “Unemployment is virtually unknown off the Indian reservations and is in the 3 percent range statewide. The state legislature in early 2011 was dealing with a budget surplus in the area of $1 billion – with a population of 650,000.”

The Bakken Oil Field Straddles the U.S. - Canada Border

But there is a dark side.

“Expenditures for the state will be rising dramatically in the areas of infrastructure, mostly for deteriorating roads and increased law enforcement,” Bailey said. “A special session of the state legislature will be held in November to address these issues. Nobody really understood how much of an effect this was going to have on the state and its people. Only now are we getting a firm hand on the situation.”

People traveling out west to seek jobs and better lives should take their own housing with them. There are not enough available places to live for the scores of new workers in the area, and the housing that is available is offered at astronomical prices.

Accident rates have tripled. Schools are overflowing, and some people have compared the amount of traffic to volumes seen in major metropolitan areas.

Publishers Auxiliary interviewed publishers and editors at four community  newspapers located around the Bakken oil field, a shale formation spanning 14,000 square miles in North Dakota, Montana and Canada.

There are no absolute figures on the amount of oil present, but estimates range from four billion barrels to 20 billion. The controversial method of frakking horizontally deep below ground rather than past methods of drilling straight down, enables oil companies to extract large volumes for many years.

The publishers in this piece reckon the oil boom will last a long time.

STEVE ANDRIST, PUBLISHER, CROSBY JOURNAL/TIOGA TRIBUNE

Steve Andrist

“North Dakota is our domestic Saudi Arabia,” Steve Andrist says. “The oil reserves here are even more significant than earlier geographic surveys predicted.”

Over the last couple of decades, parts of the state were on the decline, according to Andrist, publisher of the Crosby Journal and the Tioga Tribune, newspapers that have been in his family for three generations.

North Dakota is a largely agricultural state, where technology has improved farming efficiency, and reducing reliance on human resources.

“This has led to a population decline,” Andrist says. “We’ve watched young people move elsewhere, because there are not many jobs here. And this has led to a loss of economy and population decline.”

What a difference a few years and a large oil reserve make.

People are returning to northwestern North Dakota. In droves.

“For the first time in 50 or 60 years, our state’s population is increasing,” Andrist says. “At first we thought we had found the answer to turn our economy around. But after a couple of years, the honeymoon ended.”

North Dakota, which makes the news each summer because of river flooding, is now flooded with oil workers, big rig trucks, manufacturing outlets, and jobs.

Local businesses, government and infrastructure can’t keep up.

“Today, anyone who wants a job can find one,” Andrist says. “Reports that unemployment is at two percent are too generous. If there is anyone here who doesn’t have a job, then something is wrong.”

The Crosby Journal and Tioga Tribune are bursting at the seams with legal notices, advertising and news.

“In the de-population days we were scrambling to find stories, and we ran a lot of features. Now we are wishing for the luxury of time so we can do more features,” Andrist says. “We are spending all of our time covering development stories: planning, zoning; water; roads. So many issues.”

Heavy trucks traveling along the rural roads have torn up the asphalt.  Housing rents are hovering between $2,000 and $3,000 per month for homes occupied by several oil workers rooming together.

“We cover more traffic related issues and crime such as bar fights and personal assaults,” Andrist says. “Our health care system is struggling to keep up with the demand, as well as handling injuries caused by oil rig accidents that they have never seen before.

On the advertising side, Andrist has seen an uptick in legal notices and classified advertising.

“We have always had a very small classified advertising section, just one page, which was a joint section shared by our two newspapers. Now we are at two pages of classifieds every week,” he says. “We have public notices published because of zoning and annexation hearings we never used to have.”

Andrist has  had to go up two pages overall in his newspaper, and advertisers are requesting more color, “which we really like,” he says.

“I feel kind of self-conscious when I go to NNA meetings and talk with publishers cutting budgets and laying off people,” Andrist said. “For us, the last two or three years has been our best ever in this business.”

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2 thoughts on “MEDIA MONDAY: Economy Booms in the North Dakota Oil Fields

  1. Interesting angle. I had heard only the hard-luck stories from a colleague who was involved in the Red Cross relief effort around Minot. He said the people displaced by flooding had little hope of rebuilding because farmland had become so valuable, because of soaring grain prices, no one would sell lots for residential construction. As a result, the area was depopulating.

    • This story was also featured on NBC’s new news magazine’s Rock Central last night. Harry Smith reported on it. From the standpoint of the newspapers up there, it is good news and bad news. Good because the economy is booming. Bad because there are no places for people to live, crime is rising, traffic is terrible and people are injured in accidents that the hospitals are struggling to handle. The flooding just compounds all of that. The people who are getting rich own the mineral rights to their land, and are either selling them or leasing them. But some people only own the surface of their land and not the mineral rights. I picked out four publishers there and wrote about how the boom is affecting their newspapers for NNA’s Publishers’ Auxiliary. It’s pretty wild!

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