Tag Archives: Oil boom in North Dakota

For Those Of You Who Don’t Understand The Oil Boom, Read The Book, Moby Dick

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This past weekend, when the HBO channels were free, I watched the movie “In The Heart Of The Sea”, about the whaling ship the “Essex” from Nantucket.  The story of what happened to the whaling ship the “Essex”, inspired Herman Melville to write the novel Moby Dick.

I recommend reading the novel Moby Dick, written by Herman Melville, and also watching the movie “In The Heart Of The Sea”, about what happened to the whaling ship “Essex”.  They both tell the same story, but in slightly different ways.

The final voyage of the whaling ship Essex took place in 1820.  The town of Nantucket where the Essex sailed from, was one of the largest docking ports for whaling ships in North America.  North America was experiencing a “Whaling Boom”, which was an Oil Boom.  The whole point of whaling, was to boil the whale blubber to reduce it down to whale oil.  Whale oil was the biggest source of oil in the world at that time.

The book and the movie portray the ship owners in Nantucket as greedy capitalists, in the middle of an Oil Boom.  In the movie, it shows that the wealthy local people, would insist and make sure that their sons were captains of the whaling ships, whether they were qualified or not.  (This scenario is similar to the Oil Boom in Dickinson.)

The First Mate, had to be highly competent, to make up for the shortcomings of the ship captain who was in his position due to his family.  The harpooner, also had to be highly competent, because they wouldn’t get any oil without a good harpooner.  The First Mate, and the harpooner, stood to make a lot of money if they produced a great many barrels of oil.  (The First Mate and the harpooner are kind of like a drill rig boss or a tool pusher in this North Dakota Oil Boom.)

All the men on the whaling vessel would be away from home for one to three years.  And there would be no good food, and no women out at sea.  (Just like going to work in Williston, Watford City, or Dickinson.)

The men who manned the whaling ships, would experience great danger on the job, and great physical hardship.  The men who manned the whaling ships, did it because they had no viable economic opportunity where they had come from.  The men had some hope and expectation that they would strike it rich.  (This is exactly the same as what happened in Williston, Watford City, and Dickinson during this Oil Boom.)

Scenes in the book, and in the movie, where a whale gets harpooned, and the whale drags the men in the whale boats, sometimes smashing the whale boats, this is the same as riding in crew trucks on Highway 85 and Highway 22 during the Oil Boom in North Dakota, it was the same thing and equally as dangerous.

In the book Moby Dick, and in the movie “In The Heart Of The Sea”, there is a great white whale that attacks the ship Essex, and sinks it.  Later, when the men are stranded in their smaller whale boats, the great white whale follows the men and attacks them again.

I like to compare this great white whale to the Catholic Church in Dickinson, the great evil beast.

Then, the men end up cannibalizing each other.  This same thing is going to happen in Dickinson when all the businesses close, and there is no money in Dickinson, the people here will begin cannibalizing each other.

Why I Keep Writing About Dickinson, North Dakota, Part III

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In the states affected by hurricanes, there are laws against price gouging by businesses on supplies when a hurricane is approaching.  Businesses can not double the price of plywood and gasoline, among other things.  There are criminal charges, fines, and publicity in every newspaper about who took advantage of people.

North Dakota has just gone through its third oil boom.  The first one was in the 1950s, the second one was in the late 1970s, and the most recent one started in about 2007.  Note that each of these oil booms lasted about 7 years, and that each of these oil booms were about 30 years apart.  From everything that happened, I wish that the North Dakota State Legislature would enact “The North Dakota Boom Rush Law”.

“The State of North Dakota hereby enacts The North Dakota Boom Rush Law,  whereby the Governor acting alone, or by vote of 2/3 of the State Legislature, a condition of a Boom or Rush is officially recognized as occurring somewhere in the state, and the following protections are taken:

No business, or individual, may increase the price of necessities to more than double what the price was during the year prior to the declaration of the Boom or Rush condition.  Necessities include food, fuel, housing, hotel, transportation, vehicle repair, vehicle towing and recovery.  To do so is a crime, punishable by up to one year in jail, and $5,000 fine.

Further, it shall be unlawful for any business, individual, or government entity to interfere, impede, or delay the construction of housing, for the purpose of creating or causing a scarcity of housing, or for creating or causing high housing prices.  To do so is a crime, punishable by up to one year in jail, and $5,000 fine.

Additionally, the State of North Dakota shall be responsible for actively contacting all national news services with accurate truthful information regarding the Boom or Rush condition, and taking an active role in not allowing misrepresentations in work, working conditions, and rates of pay.

The purpose of this legislation it to prevent the hardship and suffering of both the residents in the affected areas, and the migrating workers.”

I thought that just about covers it.  Then I realized that neither the Governor nor the Legislators would allow this legislation.  The truth is, they are probably greedy also, or they are accountable to a bunch of greedy business people back home.  The real estate agents, property managers, and property investors would scream, “Are you crazy!”

Where did I ever get these ideas about treating people fairly, treating people like you would want to be treated, not taking advantage of people, not harming people, helping people?  There has got to be something wrong with me.

 

Everything That Happened In Dickinson Could Have Been Predicted

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In my previous post, I wrote about a WordPress website titled “A Brief History of Oil Production in North Dakota”.  I wrote that this website did not contain opinion or speculation from the website owner, the website presented a collection of relevant North Dakota newspaper articles from the past 65 years, which recorded events that had already happened.

In the website “A Brief History of Oil Production in North Dakota”, one of the things that it showed was that the oil boom in North Dakota from 1978 through 1984 was caused by the price of oil going higher, and the boom ended when the price of oil went back down.  I found some additional articles that explain, pretty much, that this has always happened, and this will always happen.

There is an economic forecaster named George Ure, who has a website titled “ruralpioneer.com”.  In this website, there are several guest articles written by a man “oilman2”.  Oilman2 describes that he has worked in the oil production industry for 45 years.  In one of his articles, he explains his belief on “Peak Oil”, that there has always been a finite amount of oil in the ground, the world is already half way through all the oil there is.  All the easy to get oil, has already been gotten.  Now oil companies are having to go after oil that is deeper and harder to get, like the oil in North Dakota.

Oilman2 explains that when the supply of oil on the market is low, the oil prices become high.  When the prices become high, it is worth it to the oil companies to go after the deeper oil, the oil that requires horizontal drilling and fracturing.  (You can read elsewhere, that many oil industry experts say, that there is no profit in producing North Dakota oil unless the price of oil is at least $80 per barrel.)  Oilman2 explains that as long as the price of oil remains high, deep oil and oil that requires fracturing will be produced.  However, once there is a large supply of oil on the market, the price of oil goes down, and oil companies stop production of the hard to get oil, like in North Dakota.

Starting in about 2014, OPEC was blamed for the low price of oil world-wide because they were producing a lot of oil and there was a large supply of oil on the market.  Here in North Dakota, there were some old-timers working as “lease operators” or “pumpers” that became aware that there was no place to send this North Dakota oil, all of the oil storage facilities in the United States were full.  There was an oversupply of oil in the United States.  So, the price of oil went down, it went down so low that it was not profitable for the oil companies to keep drilling deep wells, drilling horizontally, and fracturing.  About 80% of the drilling stopped in North Dakota.  Jobs went away, workers went away.

In my previous post, I questioned why Baker Hughes, Halliburton, Occidental, and the large property developers in Dickinson did not know that they were at the end of the boom to bust cycle.  There were plenty of newspaper articles describing exactly what happened in North Dakota during the oil boom of the late 1970s, with all the reasons and explanations.  Oilman2 is an example of someone who has worked in the oil production industry for more than forty years, who can explain to you that it is not mysterious when/why oil companies go to an area and start producing oil, and when/why they stop producing oil in an area.

I explained in probably at least four of my previous posts, that it was falsely reported in television news and newspapers that all kinds of people were moving to North Dakota and were making over $100,000 per year.  I have lived in North Dakota for over three years now, and I have only ever met two people who worked in the oil field who made nearly $100,000 per year.  I haven’t mentioned it yet, but there was also this widespread saying here in North Dakota, that this oil boom was going to last for the next twenty years.

If you have read maybe ten of my posts, you can probably detect a tone of anger in my writing.  I do have a lot of anger about how out-of-state workers were treated in North Dakota, particularly in regard to extremely high housing prices.  People were taken advantage of.  Thousands of people moved to western North Dakota because they thought they coud make “$100,000 per year”.  Hundreds and hundreds of people brought their wives and children to North Dakota, and bought houses because they heard and thought, “This boom is going to last for the next twenty years.”

I think that Continental Resources, Conoco Philips, Amarada Hess, Marathon Oil, Whiting, Tesoro Oil, Occidental, Baker Hughes, and Halliburton all knew what was going to happen, they just didn’t know the exact year of the bust.  These large corporations were happy with ABC, CBS, NBC, MSNBC, CNN, Fox News reporting about all the “$100,000 jobs”, millionaires, millionaires being created daily in North Dakota.  These large oil companies really like it when their new hire brings their wife and kids to some place like Williston or Dickinson, and buys a house, this shows that they are making a long-term commitment to be here.  These large oil companies don’t really care that they just let a bunch of workers go, and their $300,000 house, that they owe $250,000 on, is now worth about $150,000 if they could even find a buyer.

A Brief History of Oil Production in North Dakota

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I have stated several times that the purpose of this blog is to provide useful, truthful information about Dickinson, North Dakota, so that people from out-of-state will know what Dickinson is like, and so that people in Dickinson can see what other people think about Dickinson.  Later, one of the things that I was trying to accomplish with this blog, was to point out some of the bad things about Dickinson so that they might be changed.  Then, I just went ahead and started trying to change things myself by writing some blog posts such as “Helpful Advice to Women in Dickinson”, for instance.  I was trying to be helpful, I am trying to be helpful.

I found something that probably everybody in the United States should read, the WordPress website titled “A Brief History of Oil Production in North Dakota”.  I mean it, not just people in North Dakota, or people thinking about moving to North Dakota, everybody in the United States should read it.  The reason why I say this, is because this website explains the historical relationship between the demand for oil, the price of oil, the exploration for oil, and the production of oil in North Dakota.  The creator of this website collected the most insightful and accurate newspaper articles about oil production in North Dakota from the past 65 years.

“A Brief History of Oil Production in North Dakota” does not contain speculation, or opinions from the website creator, it presents articles from the past, that were recording what was happening at that time, or what had already happened in North Dakota.  There have been three different boom periods of oil production in North Dakota: the exploration and discovery boom in the 1950s, the oil price boom of the late 1970s, and the technology boom beginning about 2005.

The articles in the website explain at particular points in history, what the price of oil was, what oil exploration was going on, what oil production followed, the wealth that was created, the influx of people that occurred, and then the eventual decrease in oil production.  Again, I want to reiterate, the oil boom and bust occurred in North Dakota in the 1950s, then again in the late 1970s, this is completely documented by the newspaper articles in the WordPress website “A Brief History of Oil Production in North Dakota”.

The old newspaper articles state that the oil boom in North Dakota in the late 1970s came to an end because the price of oil dropped.  The oil prices are given through that time period.  Other old newspaper articles tell about the population of Dickinson, North Dakota going from 16,000 to 22,000, the struggle to build housing and infrastructure, and then the population going back to 16,000, leaving Dickinson with $25 million in debt.

I was surprised and amazed to see that the newspaper articles from the 1980s, that describe the boom and bust that occurred from about 1978 to 1984, describe almost exactly what happened here from 2005 to right now.  I didn’t know.  Nobody told me.  Who else knew?

I guess I am not the smartest person.  But how in the world did Halliburton, Baker Hughes, and Occidental build these huge buildings in Dickinson in 2012, and not know that they were at the end of the boom to bust cycle?  How did all of the large property developers that built about 1,000 new housing units in Dickinson in 2012, 2013, and 2014 not know that they were at the end of the boom to bust cycle?

I believe that I wrote somewhere in my blog, about being at the right place, at the right time, like Phoenix in the 1970s, or Tampa in the 1980s, where there was uninterrupted growth and expansion for the next thirty years.  Who knew?  I guess that there were some people that saw things clearly: warm climate, year-round activity, inexpensive property, easy to develop, vast amount of land available, no limit to expansion.  I thought that I would have liked to have arrived in Williston or Dickinson in about 2007, that would have been a great time to get here I thought.  After reading the website “A Brief History of Oil Production in North Dakota”, I realized that not only did you have to get to North Dakota at the right time, you would also have to have known when to get out.