Posted on 11/26/2011 10:00:18 AM PST by Titus-Maximus
TIOGA, N.D. — As much as the drilling rigs that tower over this once placid corner of the prairie, the two communities springing up just outside of town testify to the galloping pace of growth here in oil country.
They are called man camps — temporary housing compounds supporting the overwhelmingly male work force flooding the region in search of refuge from a stormy economy. These two, Capital Lodge and Tioga Lodge, built on opposite sides of a highway, will have up to 3,700 residents, according to current plans.
Confronted with the unusual problem of too many unfilled jobs and not enough empty beds to accommodate the new arrivals, North Dakota embraced the camps — typically made of low-slung, modular dormitory-style buildings — as the imperfect solution to keeping workers rested and oil flowing.
But now, even as the housing shortage worsens, towns like this one are denying new applications for the camps. In many places they have come to embody the danger of growing too big too fast, cluttering formerly idyllic vistas, straining utilities, overburdening emergency services and aggravating relatively novel problems like traffic jams, long lines and higher crime.
The grumbling has escalated despite the huge influx of wealth from the boom, largely because it has become clear that growth is overwhelming capacity. Indeed, local leaders note incredulously that a conference on regional infrastructure took place in Colorado last month because the region lacked the facilities to host its own event.
“We need a little time to catch our breath to figure out what resources we need in place before we keep expanding,” said Ward Heidbreder, city coordinator in nearby Stanley, which has two camps.
In recent weeks, Williams County, where thousands of previously approved camp beds have yet to be built, and Mountrail County, where one-third
(Excerpt) Read more at nytimes.com ...
If these were Obama jobs, the New York Times would present this as Nirvana.
Bring it up there and rent it out!
I got no clue what you are talking about!
They will be drilling for as long as it makes economic sense to do so.
People who don’t live near or in boom towns/regions in the west where natural resource booms happen don’t understand how they rise ... and then collapse at 3X the speed of the rise.
The S&L banking scandal of the 1980’s (for which we taxpayers were bilked of $500B+ of money to bail out) was a result of the oil patch boom of the early 80’s. Everyone was saying that commodities (especially oil and gold) would go up and never come back down.
As we saw by 1986, this turns out to be a bad assumption.
Just think of the jobs which will be created when they build the infrastructure - sewers, water treatment plants, roads, etc. - and when they increase their local law enforcement. The local governments should get off their duffs and start to work on this, rather than wringing their hands.
Ever been in a ghost town in the west?
Ever wonder why those structures were abandoned?
Because when these local economies are based on these resource booms... when the oil/gas/gold/silver/etc runs out... it doesn’t much matter whether the local politicians were smart and saved for a rainy day. The economy goes down and the population implodes with the resource depletion.
Best example I can give you is Eureka, NV. Small town (and county) that has been run very prudently for decades every time a wave of mining comes through an brings in a fresh injection of money. They have no debt, they’re so fat with tax funds that the state of Nevada wants to rob their school fund.
The population is only about 700, with moly mining it might go up to about 1500 for a while. When the moly mine north of town is depleted (or the gold at Ruby Hill runs out first), the population, it will go back down to 500 people or so, and there will be lots of unoccupied housing, just as there was when gold was under $300/oz. The local economy reverts to farming, ranching and tourism during hunting season, and that’s about it.
If I were in those areas of North Dakota, I’d be telling the county government to not allow a housing boom to take off... because when the oil development is done, they could implode their local real estate market with the left over housing.
In these situations, the mining/oil companies and counties have found it better to set up a man camp, pull in the groady trailers, which can then be hauled right back out when the boom is inevitably over.
Study the west and ghost towns (and I’ve lived in one) and you see there’s a reason why the counties and local governments wring their hands.
“O big mama government, Do Something! Save them!”
These are definitely NOT the jobs Obama had in mind. Surely there is something he can do to stop this.
Sure, no one can predict the future, but oil is over $100 when we are in an invisible recession, what will it be when this economy is moving again. The past also did not have China and India and one billion more cars on the road, plus huge domestic demand for petroleum based products! These are world changing factors that have driven oil rigs to every corner of the Earth - like Cuba. We have also been drilling in the US for decades. So it is very likely this will continue for a long time.
They are producing about 400K barrels per day in ND, which is $40 million a day in revenues. In a state that has very few people. The reserves are huge and the prediction is one million barrels per day.
Just like the oil sands in Canada - it will go on for a long time, and it will enrich us, and weaken our enemies only if we can stop the green anarchists and their leader, Barack Obama.
What we are doing in South Texas is building a lot of 14-20 spot RV parks. They are usually full by the time they get them finished. Also some of the oil companies are building apartments.
Some of the workers are driving 100 miles one way to work.
The companies are giving them housing allowances.
Open a restaurant - even a pizzeria, and get rich. There will be nothing for these workers to do on their day off.
Neither does anybody else!
The interiors of these beer cans are actually quite nice. All wood, cozy looking. I’d post the pic but being NYT nobody can.
They already have.
ND hired another 100 sheriffs a while back to police the trucker driving hours....some are working 100 hours a week and pulling in 6 figures.
I guess all the former sheriffs got jobs as oil field workers.
As I said before: It will go on for as long as it is economically viable. You mention the Canadian oil sands. They have very high start-up costs, and pretty high ongoing costs. Here’s an example of the levels of crude prices they need to sustain themselves:
http://online.wsj.com/article/SB10001424053111904007304576498633288366042.html
A pipeline would help their profit margin, but absent that, they have some pretty high costs in those projects.
At the depths of the implosion in 2008-2009, oil was under $50/bbl. Add in the addition of Bakken oil at cheaper prices and the oil sands have a problem. If the Saudis want to gut the Bakken project, they could just turn on their excess production capacity for a year after the infrastructure is into ND and bleed them dry. The Saudi’s have done this crap before, BTW.
As I said, we’ve heard this “oil will be expensive forever” talk before. Farmers used to crow about how much money they were making in the late 70’s and early 80’s... people used to think that gold was going to the moon in the late 70’s.
And by 1986, all that talk was busted and gone. The oil patch in OK/CO/TX/NM saw a devastating five to 10 year period after ‘86. In ‘86, farmers were going bust left and right.
If you go back to the 1920’s, you’ll see the same pattern as well.
BTW - when the economy gets moving again will be much further out than economists are predicting. It always is after a debt deflation. Look at Japan for an example of a multi-decade period of economic mediocrity, despite massive “stimulus” of both fiscal and monetary varieties.
I suspect that in the near term, we’re going to see lower commodity prices across the board as the speculators are pulling in their horns. JP Morgan just issued a “get out of commodities” letter to clients this past week:
http://www.zerohedge.com/news/phase-shift-jp-morgan-downgrades-all-commodities-sell
People who live and have lived for decades in commodity-based local economies know this. They know about boom-bust cycles, and they’re smart to not rush into building a lot of housing that will become a problem in the future.
Yep I bet about now a 3 bedroom mobile home could easily be rented for $1000 a week.Bet anyone who wanted to sell an RV right now could take them there and they would be sold by the end of the first day.
Pick and choose which Constitutionally guaranteed rights should apply much? That comment fits right in with the communist manifesto.
Road trip!
Sounds like the Alaska Pipeline days in the late 70’s....temp housing is what’s needed. Back then, we had a mechanic make MORE in one year than our Company President (Caterpillar dealership)
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