Category: News

The boom’s gone, and some people in southwest North Dakota are OK with that

To get a sense of what’s happening in a community, it’s often best to consult the local barber.

Paul Ellerkamp owns Big Sky Barbers, a two-chair shop he runs with his younger brother in a north Dickinson strip mall.

Their business is a small, but accurate representation of the highs of the oil boom, the slows of the bust and the ongoing market stabilization the area is going through today.

The surprising similarity between the oil boom and now, Ellerkamp said, is his bottom line.

“We’re not turning away 50 people a day,” he said with a small sigh of relief. “… But somehow the bottom line is about the same. We do not see as many oilfield guys as we used to. I won’t even begin to give you a percentage of how much that has dropped off — but quite a few.”

As Dickinson and its surrounding small towns settle back into something similar to the pre-boom world, Ellerkamp said there’s plenty of positives to take from it.

“Overall, if you’d look at it from a person that has been here 10 years, or has lived here all their life, they kind of liked not so much of the hustle and bustle,” he said. “It’s definitely more of the hometown feeling.”

And so it goes for life in Dickinson and southwest North Dakota, where an oil boom brought thousands of people to the area, only to leave many high and dry when prices collapsed in early 2014 and kept falling through early January.

Now, instead of eyeing expansion and trying to track uncharted growth, most businesses and cities are planning for modesty and hoping they can plan for the possibility of both a calm and busy future, should oil prices and activity suddenly rebound.

Major projects and commercial development in Dickinson have all but come to a halt as the hub city begins paying off deficits created by infrastructure and building projects that helped alleviate the booming, oil-driven economy.

What remains of Dickinson’s once hurried building sector is on the public side, where the Dickinson Middle School building is taking shape and water treatment facilities are under construction. New commercial developments — such as stores and restaurants — while still opening, aren’t coming at as fast of a clip as they were the past two years.
However, Dickinson’s economy isn’t faltering — even in the face of low oil prices and uncertain farm commodities and livestock prices.

“We know we’re rebalancing the Dickinson economy now,” Stark Development Executive Vice President Gaylon Baker said in his State of the City speech on Jan. 19. “We’re going to get back to a more normal situation.”

Even the small towns in southwest North Dakota aren’t sweating the slowdown much.

“Some projects have kind of slowed down. Traffic has,” said Chuck Muscha, Killdeer’s mayor. “But I think probably the main people who had the biggest effect is the business owners. When this transpired, things were booming. Now they’re closer to normal.”

Mark Benz, who owns the Grab n’ Go convenience store at the corner of state Highways 22 and 200 as well as petroleum distributor Benz Oil in Killdeer, said the slowdown in activity is noticeable on both the visual and business side.

But, he said he’s maintaining a philosophy of “no rash decisions.”

While the convenience store opened in 2012 at the height of the boom, Benz Oil has been around since 1970. So Benz said he’s seen plenty of highs and lows in the oil business.

“One thing I know from being in this industry this long is it can change awful fast,” he said.

Even in Bowman County, where oil has been a part of life for decades, they’re subtly feeling the effects of the slowdown and playing the waiting game.

Like Dickinson, Bowman County doesn’t have big plans for 2016, County Commissioner Rick Braaten said.

“As far as our road and bridge budget, that’s our biggest one, all we’re doing there for this coming year is maintenance,” he said. “We’re not doing any projects or construction in 2016. We had a feeling funds were going to be quite a bit lower. We decided not to do any improvements on our roads this year.”

Teran Doerr, the executive director of the Bowman County Development Corp., said she has seen people lose jobs, businesses report slower sales and more housing come on the market.

“It almost feels like it happened overnight,” she said.

A carbon dioxide pipeline planned by Denbury Resources to use for injection on older wells in the county is still coming but the project is moving much slower, according to Denbury representatives.

New England, like Bowman, had been planning for 2015 to be the year it began seeing increased activity from the oil business.

Two oil rigs were drilling into the Tyler formation west of the city in Slope County in 2014. If they hit, the town of about 700 people was bound to boom. But the wells didn’t produce and when the prices dropped, Marathon Oil cut its losses and moved on.

“Surprisingly, we are still doing well,” New England City Auditor Jason Jung said.

The city wrapped up the first of a likely four-year street and water project in 2015, Jung said.

The best decision the city made during the boom was not to overdo things, he said, adding that while new housing has sprung up and most new people who came to the area stayed, some are losing their oil jobs.

“The oil, we had some positive effects from it and we haven’t seen the negative effects,” Jung said. “We might be one of the few towns that might be that way instead of the opposite way.”

To the north in South Heart — Dickinson’s unofficial suburb — it was merely three years ago that South Heart Mayor Floyd Hurt stood with a shovel in hand and political dignitaries at his side to break ground on the new Dakota Prairie Refinery between his 300-person town and Dickinson.

Now, the refinery is operating but recently reported a $20 million loss traced back to low oil prices and lack of diesel fuel use in area, a crew camp in South Heart has closed and a planned massive facility for oilfield service giant Schlumberger is smaller than it was planned to be and very quiet.

Hurt said South Heart is still fairly happy with where it’s at, however.

“The best thing to do is just sit tight and wait and see,” Hurt said. “If it starts going up and things start generating again, then make plans to move with the times.”

During his State of the City speech, Baker called it “highly unlikely” that the area’s energy industry would ever again “relive the speed, volume and chaos” of the past oil boom.

And, if folks around the area are to be believed, they’re just fine with that.

Theodore Roosevelt National Park gears up for a busy year

MEDORA — Theodore Roosevelt National Park’s top official believes it could be a big year for the western North Dakota people’s playground.

Planning is already underway for the National Park Service’s yearlong centennial celebration, and Park Superintendent Wendy Ross said TRNP is anticipating a sizable boost in visitors thanks to both centennial events and North Dakota Tourism’s nationwide marketing push that highlights the park.

“The centennial is just big,” Ross said.

The publicity push, featuring actor and Minot native Josh Duhamel, includes TV commercials filmed in the park’s South Unit near Medora last summer that are now beginning to air nationally.

“I’m very optimistic,” Ross said. “I think our summer is going to be amazing.”

Boosting visitors

Ross became acting superintendent in November 2014 following Valerie Naylor’s retirement. The “acting” label was dropped last July and she moved into the role permanently.

Her goal is to capture a larger audience and get visitors to the park who may have never been there, or even heard of it, before.

TRNP’s 2015 attendance figures show it had more than 586,000 counted visitors — an increase of about 26,000 people from 2014. However, Ross said those numbers may not be entirely accurate after park officials discovered some of its people counters hadn’t been working for weeks at a time. That glitch has been fixed, she said.

“I’m really concerned about capturing what we get in terms of visitation this year,” Ross said.

Interestingly, Ross said the park is noticing a small demographic shift in who frequents the area.

“We’re just seeing more foreign visitors,” she said. “… We see people who don’t traditionally go to national parks. They’re curious about what it’s all about.”

Ross said she’s looking for opportunities for the park to become relevant to what she calls a “curious generation” beginning to travel more

“The generation that didn’t travel to national parks as children,” she said. “That’s really our opportunity now with all this promotion.”

Being ranked as the No. 5 place in the world to see in 2016 by The New York Times may play into that too, she said.

Ross said park officials worked with the Times’ staff for the piece, so they knew it was coming. But they didn’t realize the park would rank so high on the list, or be mentioned alongside some more exotic locations.

“It’s been great positive press,” she said. “You couldn’t ask for anything better than to be on that list.”

Oil and tourism

Ross said summer tourism now hops back into the front seat of North Dakota’s economy after low oil prices hurt the state’s energy industry. However, the byproduct of low oil prices is lower gas prices low, which benefits the park with both in-state and out-of-state visitors.

“When that starts decreasing, in terms of price, tourism comes up and we see that everywhere, in all national parks,” Ross said.

She said the park’s North Unit, about 15 miles south of still-booming Oil Patch hub Watford City — where the population has increased from 1,600 to around 7,000 in the past five years — has become the park’s “new front door.”

“There are all these countries represented in Watford City that were never there before,” Ross said. “It’s our chance to be relevant to a new generation and a new group of people, to think about that.”

There are challenges up north, however.

The park is working to replace its North Unit Visitors Center, which is currently a collection of portable buildings. But a replacement may be a couple years away from reality, Ross said, because of budgetary concerns. Still, she’s trying to make the North Unit more of a priority.

“It used to be a sleepy backwater, real wilderness experience,” Ross said.

TRMF’s involved in NPS centennial

The Theodore Roosevelt Medora Foundation plans to play a role in the National Park Service Centennial as well, said Justin Fisk, the foundation’s marketing director.

The foundation is sending Roosevelt impersonator Joe Wiegand away from Medora for the entire month of June to travel the country doing presentations and performances to raise awareness about the park.

The Medora Musical will also “very, very likely” have the centennial central to its daily performance, Fisk said.

“They’re writing the show right now and it’s looking cool, and they’re looking for the best way to include the National Park Service Centennial in that,” he said. “It’s pretty exciting.”

Fisk said over the next month, more centennial tie-ins and plans will be finalized between the park service and the foundation.

“With the partnership, you can actually get a lot more done,” Ross said. “You can use community members and partners to fill in some of the nuts-and-bolts gaps, but you can also create those meaningful ties your communities.”

Ag commissioner: 2016 outlook ‘pretty dismal’ for farmers

Doug Goehring may be North Dakota’s agriculture commissioner, but at the end of the day, he’s still a farmer.

Like any farmer, he has to deal with the low commodity prices that have producers from southwest North Dakota to the Red River Valley concerned and apprehensive about what the 2016 growing season will bring.

“It’s pretty dismal,” Goehring said of the state’s ag outlook. “… At this point, my understanding visiting with farmers — and even on our own farm — is there’s some hard decisions to make.”

Goehring admitted he’s even thinking about giving up a piece of rented land that may not pencil out as profitable this year.

He said he’s heard the same story throughout the state as farmers weigh their input costs with commodity prices that are lower than they’ve been in several years and are causing them to see red on the bottom lines of their projected yearly balance sheets.

“Farmers don’t see any black anywhere they look,” he said. “Then it’s a matter of trying to assess, ‘Where can you lose the least amount of money at?’”

Ron Haugen, a farm management specialist with the North Dakota State University Extension Service in Fargo, is part of a group that releases an annual report meant to aid producers in planning for the upcoming growing season.

“This has been some of the lowest prices we’ve had in several years,” he said.

North Dakota farmers are planning for their worst spring wheat prices in at least six years — nearly $2.50 a bushel lower than recent averages — with durum wheat at its lowest since 2011, according to the Extension Service’s data.

Corn prices, for the past two years, have been about $1.50 a bushel lower than recent averages and are nearly half the price of what they were in the 2012-13 marketing season.

Oil sunflowers are $8.35 per hundred weight lower than average and down nearly $5 since last year. Soybeans and canola are both at their lowest point in the past five years and well below recent averages.

“To have tight margins is actually more the norm,” Haugen said. “The last five years have seen extraordinarily high prices. This is getting back to more normal, where things are tighter.”

Despite the benefit of farmers and ranchers having the lowest fuel prices than they’ve had in several years, the gains there don’t stack up with low commodity prices.

Greg Fitterer, with Helena Chemical in New England, has been in the fertilizer and bulk fuel sale business much of his life.

He said farmers know little to nothing is going to pencil out positive at current commodity prices. Fertilizer prices aren’t much more expensive than they were five years ago, either, and he said the producers his company works with aren’t likely to back off on how much fertilizer they put on, unless spring becomes unusually dry, because they feel it’ll help keep their yields higher.

“Everything goes in cycles,” he said. “You have your ups and your downs. I’d say most guys’ goals this year is to break even. To not lose equity. It’s sad, but you’re basically not trying to strike out and hit a single.”

Goehring said he’d still like to see the chemical and fertilizer business — especially when it comes to nitrogen fertilizer and anhydrous ammonia — settle into more reasonable price in line with ag and energy commodities.

“There’s things way out of whack,” he said. “It’s gotten to a point where the industry is charging what it’ll bear and they need to come down a little bit. They’ve been squeezing too much out of the farmer, and taking advantage of the opportunity — when commodity prices are high, we’re going to get more from the farmer.”

Goehring said most farmers are looking at “bare bones minimum” spending plans to try and get through 2016 with the hope that better years and higher commodity prices — along with a better world economy, which greatly dictates those commodity prices — are around the corner.

“They’re trying to figure out everything that they can do to make that balance sheet work so they can buy another day, buy another year, another season to farm,” Goehring said. “Because chances are, a year and a half from now, things are going to be a little bit better.”

ND Delegation Upset by Obama’s Oil Tax Plan

WASHINGTON — North Dakota’s Congressional delegation is both laughing off and expressing unbridled disgust over President Barack Obama’s bid to impose a $10-a-barrel tax on crude oil.

The longshot tax proposal, which will be a part of Obama’s fi scal 2017 budget plan on Tuesday, would fund the overhaul of the nation’s aging transportation infrastructure, the White House said on Thursday.

“To be honest when I fi rst saw it, I thought someone was mistaken,” said Rep. Kevin Cramer, R-N.D. “Clearly, it’s real. … We all know it’s dead on arrival. This thing has zero chance of being taken even remotely seriously.”

The proposed fee, which would be paid by oil companies and phased in over fi ve years, was quickly met with scorn by lawmakers in the Republican-controlled Congress, and some Democrats, including North Dakota Sen. Heidi Heitkamp.

“Way to kick somebody when they’re down,” said Heitkamp, whose line was echoed almost verbatim by North Dakota Republican Sen. John Hoeven in phone interviews with The Press.

“This is never going to happen,” Heitkamp added. “This is some kind of crazy, Hail Mary pass that will never, ever see the light of day. It is not responsible if you’re trying to put together a budget. It’s really, really unfortunate.”

In the last year of his presidency, Obama has said the country must stop subsidizing the “dirty” fossil fuels of the past and focus on clean, renewable fuels that do not exacerbate climate change.

The $10 tax would, ironically, come at a time of tumbling oil prices.

Oil prices fell last month to below $30 a barrel, the lowest level since 2003, as demand fails to keep pace with a glut of new supply and the world’s biggest oil producers resist cutting production.

The fee would provide nearly $20 billion a year to help expand transit systems across the country and more than $2 billion a year to support the research and development of self-driving vehicles and other low-carbon technologies.

“By placing a fee on oil, the President’s plan creates a clear incentive for private sector innovation to reduce our reliance on oil and at the same time invests in clean energy technologies that will power our future,” the White House said in a statement.

Cramer said the proposal speaks to Obama’s radical environmental agenda.

“His goal is to make fossil fuels so expensive that other forms of energy look good by comparison, and use the extra money he raises from this stuff to further supplement the green energy sector, which can’t compete on a level playing fi eld,” Cramer said. “This is clearly all him in terms of what he believes and the way he views the world.”

Republican lawmakers, who have repeatedly clashed with the Obama administration over energy policy, panned the proposal on social media. House Majority Whip Steve Scalise asked on Twitter whether the proposal was “Obama’s worst idea yet?”

Hoeven, who is on the Senate Committee on Energy and Natural Resources, said it’s not just a bad idea economically, but also in terms of national security.

“We’re in a global battle to determine who is going to provide energy,” he said. “It’s a national security issue. … Bottom line, again, he’s making it harder for us to produce energy here at home while he makes it easier for our adversaries like Iran to produce energy.”

Neal Kirby, a spokesman for the Independent Petroleum Association of America, said in a statement that the tax would ultimately be passed along to U.S. consumers, who have benefited from low gasoline prices.

Jeff Zients, director of the White House National Economic Council, pushed back against assertions the oil tax would place U.S. crude producers at a disadvantage.

He told reporters on a call that the fee would be applied to domestically produced and imported barrels of oil but not to crude exported from the U.S. North Dakota Petroleum Council President Ron Ness said crude oil is already taxed extensively at both state and federal levels, and to impose a greater tax — especially when prices are so low — would be devastating the industry.

“You’ve got to give him (Obama) credit for sticking to his anti-American economic positions, as far as producing our own energy sources here,” Ness said. “He seems more intent on destroying our own energy economy than helping it succeed.”

Reuters contributed to this story.

Target Logistics to temporarily close Dunn County crew camp

MANNING — Target Logistics is temporarily closing its massive crew camp in southern Dunn County, the company said Wednesday.

Citing dwindling capacity and low oil prices, the company says plans to close the nearly 600-bed crew camp 8 miles north of Dickinson and reopen in late spring or early summer.

“The capacity is down, somewhat due to the oil situation and somewhat due to the weather,” said Randy Pruett with Pierpont Communications, which provides media relations for Target Logistics. “This is not uncommon throughout the crew camp industry.”

Pruett said he didn’t know exactly when the camp was closing, but said those staying there were being relocated to other Target Logistics properties in North Dakota.

The news was announced earlier in the day at the Dunn County Commission meeting.

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