Companies, workers benefit from prosperity of our oil-rich neighbor.
BISMARCK, N.D. - There's no keeping up with North Dakota's surging economy, but at least they're hiring some of us to do chores.
So much prosperity is flowing from oil wells there that it's spilling into neighboring states, with a growing number of Minnesota companies and workers sharing the lucrative oil field contracts and wages.
Of Minnesota's largest metro areas, Moorhead, sister city to Fargo, had the biggest population gain over the past decade -- 15.2 percent. Wayzata-based Northern Oil and Gas, which was built on North Dakota crude, saw oil revenue jump from $3.5 million two years ago to nearly $60 million in 2010. And there's no shortage of tales of Minnesotans getting steady work and big salaries by heading west.
"You guys are far and away our most common source of workers from out of state," said Michael Ziesch, manager of North Dakota's Labor Market Information Center. However, Ziesch added that many of those workers are daily commuters to the North Dakota border cities of Fargo and Grand Forks.
Just 17 counties in western North Dakota produce oil, but the impact is being felt statewide. It has the country's fastest-growing economy and lowest unemployment rate. It consistently has some of the highest personal income gains and lowest mortgage delinquency rates.
Bismarck, the state's capital, on the eastern fringe of the oil patch, is a good place to begin taking seismic readings of the economic vibrations from all the drilling. Many companies have come here or expanded for oil business.
Colorado-based Tubular Transport and Logistics receives 14 rail cars a day at its newly leased terminal, where forklifts hustle off pipe from Saudi Arabia and wooden "crane mats" from Georgia, and load them onto semis.
"It's an orchestra of heavy machinery here," said manager Don Williams, who said the new division has 15 employees so far.
Just across the nearby Missouri River, San Antonio-based Tesoro Corp. is preparing for a $35 million expansion of its Mandan refinery, to boost processing capacity from 58,000 to 68,000 barrels of crude a day. Standard Oil built the refinery in the 1950s to handle North Dakota oil, and now it's seeing more demand for its diesel fuel and other products.
All the activity helped chip Bismarck-Mandan's unemployment rate to 3 percent in August -- the lowest of 372 metros in the nation and lower than the state rate of 3.3 percent. That compares with 9.1 percent for the nation.
"There's so much going on it's almost impossible to keep track of it all," said Russell Staiger, head of the Bismarck-Mandan Development Association. Eight engineering firms opened Bismarck offices in the past year, he said, and "a good share of the land men are here."
To the east, in Fargo, TrueNorth Steel busily makes storage tanks for oil wells and drilling rigs, about 195 of which are going 24 hours a day in the oil patch.
"We're lucky to have this happening right in our own back yard," said Daryl Bachmeier, a company manager.
State reports show surges in business spending. In each of the last three quarters, business taxable sales and purchases jumped more than 30 percent from the same quarters the previous years, to a current total of $4.5 billion. The largest increases were in activities central to the land and drilling rush.
To be sure, the state's success is about more than oil. Agriculture, still its mainstay, is benefitting from high commodity prices, and the state has vibrant industries in health care, electrical generation from local coal and wind, information technology and manufacturing.
Staiger added that the state's conservative banks largely kept it out of the national subprime housing bubble. Consequently, it has among the lowest mortgage foreclosure rates in the country.
"None of what we have happened by accident," Staiger said. "We're careful, but we push forward. We don't rest on our laurels."
A job magnet
Just east of the North Dakota border, three buddies from Fergus Falls, Minn., wanted to make better money and see new country. "We read Mark Twain, and we wanted an adventure," joked Daniel Anderson, 24.
So he, Robert Hed, 27, and Tyson Masters, 28, bought an old camper trailer for $500 -- it still had five holes cut in the floor from when a previous owner used it for ice fishing -- and late last month they drove 480 miles to the oil fields. Within a week, they had jobs paying double what they made back home.
"Maybe I'll do this two or three years, then go home and maybe buy a house with cash," said Hed, standing by the camper outside the Williston Wal-Mart, where they spent the first two nights.
Minnesota officials say they don't know how many residents are working in the oil fields. North Dakota's Job Service office says that in 2009 -- the most recent year for which it has appropriate census data -- 27,182 Minnesotans worked in North Dakota, about 4,000 more than in 2006.
The oil boom can be felt distinctly in Moorhead, according to University of Minnesota Regent Clyde Allen, a Moorhead resident who before retiring was commissioner of the state Department of Revenue and a Concordia College vice president.
"There are certainly citizens from western Minnesota who are going out there to work," he said. "They are desperate for people. There are opportunities here for people in construction. I see an awful lot of [modular] housing heading west on [Interstate] highway 94, and I suspect that is going to the oil patch."
Northern Oil and Gas, formed in 2006, has acquired more than 155,000 acres in the Bakken oil formation and the Three Forks oil "play" in North Dakota and Montana. CEO Michael Reger is a Billings, Mont., native whose family has leased local mineral rights for two generations.
The company's second-quarter oil and gas sales tripled to $35.5 million compared with the same period a year ago.
Hastings-based Minnesota Coaches Inc. is busing oil field workers to drilling rigs. Last month, eight of the company's drivers were in the oil patch.
Since the fall of 2010, St. Cloud Technical and Community College has had a contract with Halliburton to train and help license its newly hired truck drivers for work in western North Dakota. Thirty have completed the course. The company also came to interview 40 potential recruits, said John Hart, director of outreach for the college.
Sue Peterson of the Thief River Falls, Minn., Job Service office didn't have to think long when asked if she knew of any Minnesotans working in the oil fields.
"My son is out there!" she said. Joey Peterson, 22, went there in 2008 and will make $120,000 this year operating a crane, she said. Three of his Minnesota friends are there now, too.
"You can't turn down the money, but the hours are long," she said. "He'll work seven days this week and put in 92 hours. But at his age, you can do that."
She said he plans to work there as long as possible, but he has a reason, besides his mother, to some day return home:
"He just bought 170 acres back here as a way to invest some of his money."
Larry Oakes • 612-673-1751