Rock Center with Brian Williams did a segment on Williston, ND this evening, and the town is at the beginning of an oil boom that has doubled the population and drawn people looking for work from every corner of the country.
The main problem the town has is the shortage of housing. The local wages start at $15 an hour and go up from there. More than that, construction jobs, trucking jobs, and entry level work at the wells are leading the job openings. An electrician said he called four places and got four offers in under two hours. He and his wife, an elementary school teacher who was offered a contract sight unseen (unheard of for nearly any other place) have purchased an acre and a half of land and are purchasing a modular home.
I wish all of them well, but even the man who owns the company drilling the oil says those deposits will last last ten years. Are they counting on currently unknown technology making further drilling possible? Is anyone looking ahead at all? What happens if the deposits are pumped out, and there’s no more oil in the region?
The company will be okay. I’m sure the owner will invest his profits (he’s a smart man, clearly), and diversify drilling sites. The company employees may have the opportunity to move to other places that still have oil. What about the town? Once the oil is gone, they’ll have the business base they had before the oil was drilled - agriculture, and very little of that.
What’s the most likely outcome? What would you recommend? Why is it we get so excited about the good stuff now but somehow never manage to discuss the inevitable end and how to cope with it?
I live in a Kentucky coal mining town, so I think about this fairly often.
At least in Williston the owner is saying outright that the oil is running out in ten years. The coal companies have put tons of money and effort into creating the impression that coal will sustain us forever as long as we don’t put any restrictions on mining it. Politics around here is just a contest for who can fellate the coal companies most vigorously. If you’re crazy enough to think we’d be better off diversifying our economy then you’re a tree-hugger and (according to a popular local bumper sticker) one could save a coal miner by shooting you.
But we all know that the coal isn’t going to last forever, and coal-fired plants will eventually be a thing of the past. It might be ten years from now and it might be thirty. All the political manipulation in the world won’t keep it up for more than a few years. And the minute it stops being profitable to dig coal those companies will be gone; they’ll probably leave behind some token charitable efforts, but we’ll be left with nothing.
My town is sort of a medical and shopping hub for the region, so we’ll survive for quite a while as the smaller mining towns around us become shadows of themselves if not outright ghost towns. With any luck that advantage will give us time to draw in some new economic activity, but I wouldn’t bet on it.
The best bet for Williston would be to try to piggyback some more sustainable industries on top of the oil boom, but that’s hard when you’ve got full employment. I imagine they’ll go back to being a poor little town, but with a few new faces and a crapload of unoccupied housing.
If only there was a way to supply portable houses to an area that needs housing fast, but may not need it in the relatively near future. Nahhh, the free market could never dream up such a fantastic thing. Clearly we need the government to step in and stop the madness.
What’s stopping anyone from building a mobile home park in the vicinity? Clearly, the eeeevil eeeevil government is mandating that everyone get a permanent home built.
I didn’t say anyone was stopping them. I think that is the best solution, and I doubt the local government would be so stupid as to stop such a thing.
If they do decide to build permanent houses, and it really is a foregone conclusion that the oil runs out in 10 years, that will be factored into the price.
Actually… coal is really common. Really, really common. There’s a vast amount of coal in the world. Running out of coal isn’t really a problem.
Aside from which, I have no problem with people diversifying their economies, but it may be that people don’t want to do that. That is, they may like the town but not feel it’s worth the effort.
I’m not following your complaint with the government. People are choosing to build permanent housing when other options are available. The government is neither driving their decisions nor prohibiting other options. Where’s the beef?
You know, I was thinking to myself, “how expensive could land in Williston, North Dakota be, anyway?” Well, this listing shows a 1.5 acre vacant lot on 26th Street on offer for $420,000.
:eek:
I can only imagine that it must be covered with marijuana plants or some such.
On the other hand, this lot on 133rd is 0.85 acres for only $30,000, so apparently the living is a lot cheaper uptown in Swedish Harlem.
I don’t have a complaint about the government. I’m not following where you are getting that I do. I have a complaint about a gratuitous swipe at the market taken by one of our posters here. The logical next step is to get the government involved, but maybe Tao had something else in mind. If so, he should stet up and offer his solution.
Who cares about the town? It will boom when the oil flows, and die when the oil dries up. And so what? It isn’t like the people are going to die. They’re going to move. If they’re under the illusion that they can buy an expensive house today, and sell it for the same price after the bust, then they’re sadly mistaken and will lose a lot of money. OK, that’s true. And so?
There may be a lot, but the problem is that in any given spot, the supply is still finite. Running out of coal around DoctorJ’s home town is certainly a possibility.
I grew up in Dickinson, ND which is near Williston.
They’ve been through it before. There was an oil boom in the late 70’s. Dickinson went from 6000 to 24000 population in just a few years…then back down to 12000 after the oil prices tanked.
I don’t remember things being bad. The ‘economy’ (I put in quotes because there isn’t much of an economy in Western ND) as it was before the boom is still there.
What happened back in the early 80’s when the boom crashed was that most of those people who came into the area becuase of the boom go back ‘home’ or go somewhere else…so there isn’t massive unemployment.
I remember rent prices stayed sky frickin high for something like 5 YEARS(!) after the bust and I remember the city saying vacancy rates were above 80% (meaning only 20% being rented) during that time. The rent prices were absolutely insane for the longest time and they would just not come down*. Young adults and others had to stay shacked up with parents or others because local wages would not support those rents.
Finally after about 5 years, rental prices collapsed by over two-thirds to come to a more reasonable level and normal people could finally rent apartments again.
However, that is about it. Lotsa people leave but they were the ‘new’ people to begin with. Rentals took forever to adjust but otherwise I don’t remember it being such a shock.
*This seemed to fit the culture of the area. There never seemed to be real competition. Pepsi and Coke set prices high and wouldn’t really compete with each other. Car dealerships ALL went for the ‘Low Volume High Profit’ business model. Business owners never seemed to compete with each other. So, not hard to imagine landlords doing the same.
Yeah, I found myself thinking, if I just had $300K in start up cash, I’d start a yurt business up there. Maybe even create a simple “campground” of basic housing good for short and long term.
So, it sounds like the long time residents will be okay, especially if they understand that this is a temporary situation. If the town has any brains, they’ll invest the tax revenue in infrastructure to last them a lot longer than ten years. It would be even nicer if they’d figure a way to bring in other industry, but you can’t have everything.
I didn’t say the government should get involved. Stupid as this waste is micromanaging what kind of houses people can have would be more objectionable.
However Free Market types like to complain about government waste. Well the market can be just as wasteful. I wonder if they’ll complain about it? I think not.