Saturday, August 06, 2011
I just got home from a long trip into the Bakken Formation oilfield. My last trip there was when snow was still on the ground - but that was just a few months ago. Winter lasts forever "up there." The whole area is hopping, but it seems even more active now than then.
We hear about how our regulatory agencies restrict drilling for oil all the time. I know this is true. But when I read someone bitching about how we really need to open up the Bakken for more exploration so the .gov should relax the regulations - well, while I'm all for relaxing what I consider to be unnecessary and restrictive rules that have never been voter reviewed, I'm not sure how that is going to help that area.
The major area of concern is the northwest corner of North Dakota. The eastern border of Montana has a lot of activity, and Canada has a lot of drilling going on right across the border to the north. Everything north of Interstate 94 and west of Bismarck is a madhouse right now. Everywhere you see billboards at fast food places begging for help. There are huge billboards on the outskirts of Minot and Williston advertising new apartment complexes expected to open soon and are now accepting reservations (some motels, too). Traffic is heavy - and it's oil service industry trucks. Mud hauling pneumatics. Water and oil tankers. Frakking trailers. Rigs on the move. Flatbeds with drill stem loads. End, belly and side dumps. You name it.
US Highway 2 is a four lane highway from Minot to Williston. I've been on it several times, but this time the traffic was unreal for such a deserted looking rural area. The traffic in and around Bismarck and Minot is pretty impressive for such a "backwater." I got into a sort of rush hour in Williston - the little truck stops there were backed up to the street with trucks waiting to fuel. When I went through Watford City, the tiny convenience store with two lanes to fuel big rigs had them waiting five or six deep.
Housing and motels? Lots of new trailer houses on the move. When I got off US2, I saw collections of camping trailers surrounded by cars and trucks parked out near some farmer's shelterbelt - home sweet home to them (I hope they had a sewer system at least). I saw an ad for a sheds converted to dormitory style rooms (complete with satellite tv, kitchenettes and shared bathrooms) for rent or lease.
Oh, and motels? Booked ahead for weeks. Bad news for the hapless and uninformed traveler planning on stopping in that area on a whim - they might have to drive for hours to find a place. We do. Our guys that go there every week stay in Belfield because the motel there keeps some rooms for them. We give them a lot of business. Lately, the work is about a three hour drive from that motel, so the workday includes a solid six hours of driving time before getting to the site. We can't take our wide loads there directly, because of road construction and the last round of flooding started some sinkholes on another north/south corridor (North Dakota Highway 22 north of Killdeer), so it's closed. We take our loads from Belfield east to Bismarck, north to Minot and then back west within sixty or so miles of Williston. Ideally, since our customer is in that area, that would be the best place for our operations to center, but it ain't happenin.' We were working north of Killdeer earlier, so Dickinson would have been the logical choice. We've also set a bunch of batteries in the New Town area in the past. But we, like everyone else, have no choice.
It's no different for any of the roustabouts, roughnecks, construction crews, or any other industry the oil boom needs. The motel parking lots are full of fairly new pickups, many with service beds and all dirty. The better grade motels have more pickups without service beds - supervisor trucks. Dirty. The eighteen wheelers all need a bath. Our trucks kinda stand out up there, because we're required to keep 'em clean, and if we get up there without getting rained on, they're pretty shiny. We've got a stellar rep for the quality of our tanks, plus we've got the best lookin' rigs in the oil patch.
At any rate, I've got to wonder just how this area could stand some more stimulus. Where are the new drilling rigs gonna come from? How about some more labor? Can't get enough as it is. Where the hell are they gonna eat and sleep? How are the roads going to be able to handle the extra traffic? How are they gonna handle the extra oil? The systems handling the crude are maxed out now.
You'd have to get the feds involved. That's an idea I'm not especially fond of, because of the stellar record they enjoy in these matters. Yeah, the CCC worked in an era when one could conceivably conscript workers who were willing to work. Now?
And to be fair, the local and state governments are stepping it up. North Dakota has made their state business friendly, plus they are working on that infrastructure thing. There are only so many roads you can turn into four lanes in a short period of time. Plus, let's be fair. Let's say you are a member of a city commission. Would you be in favor of borrowing a ton of money to expand your sewer and water systems, plus expand your streets and so on and so forth if you weren't sure just how long this gravy train is gonna run? There is a reason this is called a boom, because it's generally followed by a bust. No one wants to get hung out to dry with a bunch of bonds coming due for improvements that required a greatly increased population that didn't pan out. No business owner wants to have a brand new motel with no guests, or a McDonalds with no customers.
From what I see, we need new refineries and the pipelines to feed them more than anything else. That is where the .gov needs a fire lit under their posteriors. Supposedly there is more crude coming out already than the closer refineries can handle.
So the next time you get an email or read an article going on endlessly about how the Bakken could keep the country going with oil imports, but it's a Big Secret or something and the .gov is doing all it can to prevent it or restrict it and if we could just get the .gov off it's ass and out of our way the free market could get down to bidness and use that there massive oil reserve - welp, I gotta ask just how the hell can an unregulated market do it faster? As I've said before, it's maxed out now. Don't get me wrong, this is no endorsement of the regulatory maze currently in place. The sky isn't falling in this case.