Tag Archives: Unemployment in Dickinson

Economy in Dickinson, March 2016

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I will try to give a brief look at the Economy in Dickinson, in March 2016, using people that I know as examples.

I was making very little money working two jobs in Dickinson this winter, so I got a third job working in Watford City.  I was very lucky to get this job, jobs are scarce.

A friend of mine in Dickinson that I have known for two years, this winter was the poorest and most financially desperate he has been in the past eight years.  I got him a job working with me in Watford City.  He was very lucky to get this job, jobs are scarce.

A friend of mine in Dickinson that I have known since 2011, who has a CDL and does construction work, he became completely broke and had to return to Wyoming in November of 2015.  He could not get another job in Dickinson.

A college educated friend of mine who has lived in Dickinson since 2008, he left Dickinson in December of 2015, due to lack of professional work prospects.

An electrician who I have known in Dickinson since 2013, he had been doing well financially in 2014 and 2015, now he is very nearly broke.  Not a lot of work prospects for him.

At the Church that I was going to, there are three truck drivers, each with a wife and kids.  One truck driver had lost his job in October and has not been able to get another one.  A second truck driver has been expecting to lose his job any day now for the past two months, the company he is working for is going out of business.  About 5% of the Church members have left the state since October due to lack of work.

A friend of mine who I have known since 2011, co-founded a trucking company in Dickinson in 2012.  His trucking company went out of business by the end of 2014.  He has been broke since the Spring of 2015.

To date, the only oil field worker that I have ever met, that I know now, who is not broke or nearly broke, is a wireline operator whose wife is a nurse.  He and his wife own moderate vehicles, and they live in an older townhouse.  He has been out of work for nine months, but his wife is still employed as a nurse.

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.

July 2015 Update for Dickinson, North Dakota

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Hello everyone.  I have not written any posts for this blog for a little over two months.  I have had many ups and downs here in Dickinson in the past two months, work related, women related, housing related.

Please, if you are considering coming to Dickinson at this time, don’t.  Many, many people here are wanting to leave, including myself, but we can’t because we don’t have enough money to leave.  Even though it is the peak of the work season, this is about the least amount of cash-on-hand that I have had in the past twenty years.  I am almost a pay-check-to-pay-check person now, though I have never been before at any time in my life, thank you Dickinson.

I tried to remain calm here in Dickinson as the work has gone away since about December of 2014, waiting for things to sort themself out.  I remained as manager of a small company because I liked the owner, I liked the company, and I liked the work, but my pay went down and down.  I held off, but finally accepted a job at a competitor company which had much more work, but found out within a couple of days that the company was one of the sleaziest places that I had ever worked.  I soon realized that they had more work because they were slightly lower in price, but were greatly lower, vastly lower in the skill level of their personnel, and their ethics were that of the worst-of-the-worst, bottom-of-the-barrel car salesman.  So back to my previous employer I went, learning that not only do you have to be wary of strangers in Dickinson from out-of-state, who may stab you in a Wal-Mart parking lot, but Jesus, you have got to be even more careful about going to work for some of the companies operating here in Dickinson or you will get mugged, raped, and robbed by them.

People in Dickinson now, there are people like myself and others who would like to leave, but don’t have the money to leave.  But there are other people, maybe even myself, that are too stupid to know to leave.  The top income earners had been the young, able-bodied men who worked on the drill rigs, twelve hours per day, two weeks straight, then one week off.  When the drill rigs shut down, these guys went home, they went someplace else, they left the state right then going about 80 miles per hour.  Maybe I should have too, but I did not know what I would do for a living back in Idaho where I still have a house, I thought I would be better off here in Dickinson, but now I am more stuck than I was back in December, January, February.

As the oil field worker men left town, and it became Spring, then Summer, the women came out of their holes and began to move about.  Women began letting me get close enough to them to talk to them and pet them, though you still have to be careful about what you say, so that they don’t start squealing,”That guy is bothering me!, that guy right there!”, also, don’t try to pet them, I said that they let me get close enough to pet them.  Anyway, they keep asking me,”Do you like Dickinson?”  What they are trying to figure out, is if you are going to stay.  What they are trying to figure out, is if you just want to have fun/sex with a girl/woman while you are here, like it doesn’t really mean anything to you, and then you are just going to leave, maybe when they just start to really like you, maybe when they become pregnant, maybe when they are making plans to marry you, are you going to do that, just leave one day?  I am not handsome enough for women to want to have sex with me just because I am so handsome.  For some women, there are guys that are so handsome, they will have sex with him just to not miss the opportunity.  But that’s not me.  Women will consider having sex with me because I am clean, healthy, polite, and have potential in their minds, in some ways, but they have to have more reason than that.  Getting off the track slightly, a sufficient additional reason might be that they are mad at their boyfriend or they are drunk.  Getting back on track with my point, even if women in Dickinson like you or find you attractive, they don’t want to date you or have sex with you unless you tell them that you like Dickinson, meaning that you are willing to stay here, meaning that you potentially would want to marry them.

Having lived in Dickinson for three years now, and having met more women this summer than ever before, because so many men have moved away, the women will let me talk to them now, I got a lot more insight and have more of an understanding of women in Dickinson now.  Most of the people from Dickinson are Catholic, most of the women in Dickinson are Catholic.  Most of the women in Dickinson have a view of life where they want to be married, have multiple children, and have a husband that takes care of them and their children.  In their view, it would be a good idea to get the best possible husband, one who is tall and handsome, one who has good earning potential.  If they spot a guy like this, they had better try to get him quick before some other girl in Dickinson does, because there is only a limited selection in Dickinson, if you don’t get a good guy right away, just look at what you will have to pick from, guys that none of the other women in Dickinson wanted! For the women in Dickinson, if the guy doesn’t want to marry them, the women have to drop this guy right away and try to hurry up and find some other guy they like, who does want to marry them.

I don’t look at dating this way.  I meet young women who are appealing because they are healthy, in shape, have a lot of energy, and are friendly.  I would like to go ride bikes, hiking, or canoeing with these young women.  I meet women who are older than me, who are knowledgeable about law, business, art, architecture, and history.  I would like to talk with these older women.  My point is this: I don’t demand, require, or expect that any woman meet a list of qualifications for me to like them or date them.  Also, I don’t mind if they want to date for a week, a month, a year.  I couldn’t say if I would want to marry them unless I knew them very, very well, and even then I realize that I could be mistaken about what the woman is really like.  So, in short, I don’t ask women out with the expectation or desire that this will culminate in marriage.  I like women, I like being with women, so it is enough in itself just to have the company of a woman I like.  I don’t have to “own” her and “control” her, shouldn’t she be able to do what she wants, when she wants?  I can kind of see why women want to get married, and I would agree to get married if I could see the marriage working out, but I don’t have the same policy/procedure as women in Dickinson regarding dating, that is to only date people who have the intention of marrying them.

I could be mistaken, but elsewhere I believe that there are women who want to date men because they enjoy their company, they are physically attracted to them, they share common interests and opinions, they enjoy going places and being together, yet the woman does not want someone telling her what to do and when to do it, she wants her own house, her own furniture, her own pets, and her own car without having to compromise or get agreement from someone else.  In Dickinson, women want to make sure up front that you want to get married, have kids, provide for them, and every aspect of your life will be geared to accommodating your wife and children, until you die.  So women in Dickinson will try to find out right away if you plan on staying in Dickinson, if you don’t plan on staying in Dickinson, then you probably don’t have the intention of marrying them, and they don’t want to waste their time dating you.

 

April 2015 Summary of Dickinson, North Dakota

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You do not want to come to Dickinson, North Dakota, at this time.  There have been many, many jobs that have gone away in the past two months, mostly because of the low price of oil.  The price of oil is so low right now, that the oil companies who own the wells do not want to pump the oil out of the ground.  It had cost the oil companies so much to lease land, clear the well sites, drill the wells 5,000 feet deep, fracture the wells, install the pump jacks, install the tanks, that they can’t even break even on the money they spent unless they can sell the oil for more than about $70 per barrel.  The price of oil right now is about $35 per barrel.

The oil companies who own the wells, not only do not want to pump oil out of the ground right now, they don’t want to drill new wells, they don’t want to fracture new wells that have already been drilled, they don’t want to repair wells that have just started to have problems.  The oil companies don’t want to do anything right now, except wait.

As you might imagine, when the oil companies don’t want to do anything, they let people go.  The oil companies, the drill rig companies, the fracturing companies, the oil field service companies have all let people go.  Many oil field workers have already left North Dakota and have gone home or gone elsewhere.  Because of oil field work slowing down, because of oil field workers going home, retail stores, restaurants, and hotels are less busy, and they will let employees go also.

The price of hotels, apartments, trailer parks, and houses is still very high.  The property owners, property managers, real estate developers, real estate investors, and real estate agents are all trying their best to keep the prices high, even though it is inevitable that prices here will eventually come down greatly.  People in Dickinson will begin to lose their homes to the banks soon because they are unable or unwilling to pay their mortgage.  They may be unwilling to pay their mortgage because the house that they bought for $300,000 is now worth about $150,000, they may owe $250,000 for a house that is worth $150,000.  People will abandon the manufactured homes that they bought because they are unable or unwilling to pay.  Real estate investors and real estate developers will have to sell their properties for low, low prices because they have no other choice but to sell or let the bank take possession.

In order to keep the riff-raff out of Dickinson, the police are very eager to pull over motorists in Dickinson.  Once they stop a motorist, they can check for outstanding warrants, non-payment of child support, driving without a license, driving without insurance, driving under the influence, possession of firearms, possession of a controlled substance, and they would love to make an arrest.  If you have an out-of-state license plate, you have an even greater chance of being stopped.  If you have a construction worker’s truck that is more than a couple of years old, you have greater chance of being stopped.  The police in Dickinson are enforcing a local social decision, they do not want out-of-state workers ruining their town.  If you get stopped in Dickinson, and you are an out-of-state worker, the cost of going to jail, hiring an attorney, and possibly losing your job, and losing your housing,  is going to bankrupt you, you will leave Dickinson poorer than when you got here.

The people in Dickinson are unfriendly and not helpful.  There is no homeless shelter.  There is no cheap campground, they have made sure to end that.  You can not sleep in your car in the Wal-Mart parking lot, you can not sleep in your car in the truck stop parking lots.

The women in Dickinson are unattractive and unfriendly.  There is a shortage of women.  The ratio of men to women is probably 3:1.  There is very little to do in Dickinson for recreation or entertainment.  It is cold here for seven to eight months of the year.  The people here do not like out-of-state workers, they are hostile to them.  The people here are not very friendly or social with each other even.

Please do not come to Dickinson, North Dakota.  If you do, you will only find that what I have written is the truth.

Warning, Do Not Come To Dickinson, North Dakota

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Please do not come to Dickinson, North Dakota, at this time.  Right now, and in the coming months, there will be many people let go from their jobs.  There will be many more people looking for jobs, than job openings.  The people that are already here will be competing against each other and fighting each other for the few job openings that will come up.

According to the “Dickinson Press” newspaper, and some oil field industry publications, there were approximately 280 oil well drill rigs in operation at the peak of the oil boom in North Dakota several years ago.  A little over two months ago, the “Dickinson Press” newspaper had an article about two drilling companies parking approximately eighty drill rigs outside of Dickinson because they were not being operated.  About one month ago, the “Dickinson Press” had an article that said the number of drill rigs operating in North Dakota had fallen to 97.  Now, the number of drill rigs operating in North Dakota is about 80.  The number of drill rigs operating in North Dakota went from 280, to 80 the present time.

According to oil industry publications, one drill rig that is operating, has about 100 direct and indirect jobs created when it is operating:  site clearing operators, dump truck drivers, quarry operators, road construction operators, fence installers, equipment transport drivers, rig erection crew, site trailer haulers, trailer set up workers, electricians, tank battery haulers, water truck drivers, drill rig operators, work-over rig operators, drill rod deliverers, casing deliverers, fuel truck drivers, heavy equipment mechanics, welders, pump jack installers, oil tank installers, containment barrier installers, automation & control installers, etcetera.  Because the number of drill rigs operating went from 280, to 80, 200 drill rigs x 100 jobs per drill rig, equals 20,000 jobs lost. 

Some of the oil field workers who have recently lost their job have already left North Dakota and have gone home or gone elsewhere.  The ones who left right away already knew what was going to happen.  How do you expect to get another job in the oil field when there are 20,000 other people who are also losing their job at this time?

In Dickinson, every hotel, every restaurant, every grocery store, every retail store, every hardware store, every bank, will let a couple of employees go, because business has slowed down, and it will slow down even more.  Car dealers and heavy equipment dealers will let sales people and mechanics go.

Though many out-of-state workers have recently left Dickinson, the RV parks, trailer parks, and apartments will not lower their prices for about a year, and housing prices will remain very high.  The people who lost their job, who currently have housing leases with high rents, will be so desperately in need of money to make their rent payment, they will take any job they can get in Dickinson, and it will be an employer’s market, wages will go down.

Please do not come to Dickinson right now.  There are going to be so many people out of work, so many people looking for work, and no job openings.  Housing prices will continue to be very high.  You will not want to be here.  It is cold here for about seven months each year.  There is not a lot to do for recreation and entertainment.  The people are unfriendly, not hospitable, and not helpful.  There is a shortage of women, and the women here have decided that they are going to be overweight, unattractive, and unfriendly.  The police here are determined to cite and arrest out-of-state workers every chance they get in order to try to encourage them to leave.

Don’t Come To Dickinson, North Dakota

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Please do not come to Dickinson, North Dakota.  Due to the low price of oil, employers throughout western North Dakota have laid people off, and are continuing to lay people off.  Halliburton, Baker Hughes, Marathon, Schlumberger, Patterson Drilling, and many others have recently let employees go due to reduced work, and trying to cut costs.

In the March 26 edition of the “Dickinson Press”, there was an article that said the amount of drill rigs operating in North Dakota right now is 97, the lowest it has been since February of 2010.  I believe that this article said that the highest rig count was about 270 in 2013.  Elsewhere in this edition of the “Dickinson Press”, was an article about North Dakota hoping to create manufacturing jobs in order to have something for residents of North Dakota to do for employment, but this is a long way off, and just a wish right now.

I was at a community event last night, and one of the event organizers who was speaking to the group, said regarding what the group was doing, that we needed to be mindful that though Dickinson had grown rapidly during the last several years, it was going through a different kind of change right now, and that Dickinson is beginning a period of economic difficulty.

An oil drill rig has about 40 workers directly associated with that particular rig, where that rig goes, they go.  There are about 200 drill rigs that have been parked and are not working in western North Dakota.  That means 8,000 drill rig workers have been laid off.  These are the highest paid workers in the oil field, they make about $100k per year more or less.  Many of these workers are young, many of these workers are from out-of-state.  I think that a lot of them have bought new trucks for themselves, new vehicles for their wives, and have bought  homes back in the states that they came from.  They had the expectation of making $100k per year, for the next several years, so did the car dealers, so did the banks.  Every one of these drill rig workers probably has a least one large truck payment each month, if not two vehicle payments and a house payment.

Because there are about 200 drill rigs that are not working, there are many other trades that are not working.  Excavation and site work contractors that employ equipment truck drivers, dump truck drivers, dozer operators, scraper operators, and laborers are not preparing drill sites.  Fence contractors are not putting up fences at these sites.  Loader operators are not very busy at quarries.  Heavy equipment mechanics, service trucks, tire services are not busy in the oil field.  The water truck drivers do not have work when there is no drilling and fracturing.  The truck drivers who deliver the tank batteries do not have work when there is no fracturing.  There will be less work for the work-over rigs.  There will be less work for the pump jack installers.  There will be less work for the electricians who install the underground electric, instrumentation, controls, and pump jack motors at the well sites.  Much less work in the oil field.

Property owners and mineral rights owners in North Dakota have begun to receive much smaller payments from oil companies for the wells on their property.  The price of oil is down, plus the oil companies don’t want to pump as much oil when the price is down.

Because the North Dakota property owners, truck drivers, heavy equipment operators, heavy equipment mechanics, service truck drivers, fence installers, laborers, electricians, pump jack installers, and rig workers have less money and are spending less money, all the retail stores, car dealers, and restaurants make less money, and are less busy.

In the “Dickinson Press” on Thursday March 26, there were two jobs listed in the Help Wanted section of the newspaper.  At this time of year, one year ago, there would have been about twenty to thirty jobs posted.

Work Slow-Down in Dickinson, North Dakota

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I have not posted anything to this blog for approximately six weeks.  I have been very busy due to changes in Dickinson.  Normally, there is a work slow-down in North Dakota from the beginning of December through the end of March.  This normal work slow down did occur.  It is difficult to perform different types of construction due to the ground freezing solid, due to concrete not being able to cure, and due to it being difficult to work outside when it is below 0 degrees Fahrenheit.  I would estimate that approximately twenty-five percent of the out-of-state workers go home at this time of year.

For the out-of-state worker, if you are not working more than forty hours per week, the cost of rent is so high in Dickinson, that you would probably want to go home in the winter, you see most of your money going towards rent, you are not getting ahead financially, there is not a lot to do in Dickinson, it is miserably cold outside, so you go home.  The long time residents of Dickinson say that the winter in North Dakota “keeps out the riff-raff”.  I agree with them on this.  I hate white-trash.  The high cost of rent, the high cost of utilities, the severity of the cold and snow, the lack of work, makes it difficult to get by in the winter in North Dakota, and the white-trash leave here like rats from a sinking ship.

In addition to the normal winter work slow-down, there has been a second contributor to the work slow-down, the price of oil.  Sometime in December, the price of oil went below $50 per barrel.  The oil companies here in North Dakota such as Whiting, Marathon, and Continental, have calculated that when they can sell the North Dakota oil for more than $80 per barrel, they are making a profit.  Once the price of North Dakota oil falls below $80 per barrel, to the oil companies, it’s like a car dealer selling a new car for less than it costs to manufacture it, they don’t want to do this, there is no point in pumping oil from the ground to sell it at a loss.  People here in North Dakota and across the United States speculate on how this will affect employment.  People that use sound logic and reasoning believe that under these circumstances, the oil companies will reduce the amount of oil that is pumped, and try to reduce costs wherever they can because they are not making a profit on the oil that is pumped.  In the “Dickinson Press” newspaper in late January, there was a front page news story about the Patterson drilling company parking forty of its drill rigs on land outside of Dickinson because contracts for drilling new wells had declined.  This newspaper story also cited another drilling company parking its drill rigs outside of Dickinson due to a slow down in drilling.

In national news, it was either Baker Hughes or Halliburton that announced they were laying off 7,000 people.  Schlumberger announced that they were laying off 1,000 workers.  Other oil industry companies announced lay-offs.  My estimate is that the Baker Hughes and Schlumberger lay-offs will probably remove at least one hundred workers in Dickinson.  Patterson drilling parking forty of their drill rigs will probably cost about four hundred jobs in Dickinson.  The Dakota Prairie Refinery in Dickinson is just being completed, this project had employed more than several hundred people at any one time, and these people are going to be laid off now.  When you add in the other drilling company that parked its drill rigs outside of Dickinson, just these companies mentioned in this paragraph will total about 1,000 jobs lost in Dickinson in January.

There are approximately six very large apartment communities that are just being completed in Dickinson, totaling approximately 1,000 new units.  At this same time, I believe that there are at least 1,000 jobs that have been lost in Dickinson.  It will be interesting to see what happens.  If you have read some of my blog posts from 2014, you can see that much of what I wrote about, was that the oil boom that Dickinson had been experiencing presently, had happened before about thirty years ago.  I think that in 2015 many people in Dickinson will experience a catastrophe.  Some people employed with Baker Hughes, Halliburton, or Patterson drilling, who had purchased a house in Dickinson in order to move their wife and children here, will not be able to pay their mortgage on the $300,000 house they bought, nor will they be able to sell it for more than $250,000.  People who purchased new travel trailers to live in RV Parks, and people who purchased manufactured homes in manufactured home communities will just walk away from their trailers because they will no longer be able to make the payments and pay the lot rent, and there will be no point in living in Dickinson anyway if they can’t get a job here.  People will walk away from their apartment leases.  Will the new apartment communities still be able to charge $2,000 a month for an apartment?

I would like to be here in Dickinson long enough to see some people have their heads shoved in shit, which is what I felt that some people have done to me, merely for coming here, and being from somewhere else.  Myself, and other people have come to North Dakota, with a college education, with no criminal record, with a work history of professionalism, and having lived and worked throughout the United States, and been treated like dirt by ignorant, uneducated, never-been-anywhere North Dakotans who temporarily and briefly have been given power over other people by the oil boom here.  I would like to be here to see some of the local people and businesses who have mistreated and taken advantage of people from out-of-town, get what is coming to them.

Oil Field Speculation in Dickinson, Part II

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I hope that you have read “Oil Field Speculation in Dickinson, Part I”, but it is not absolutely necessary to be able to follow along with this “Oil Field Speculation in Dickinson, Part II”.

In 2011, I met here in Dickinson a truck driver who had grown up in Gillette, Wyoming.  I will use the initials “SA” for this individual to protect his identity.  When “SA” was a kid, there was an oil and gas drilling boom in Gillette, Wyoming.  He said he remembered new apartment buildings being built and new manufactured homes being brought in.  He remembered people buying new trucks, motorcycles, boat, and RVs.  “SA” remembered his father standing around with other people, and they were all agreeing,”…this economy here in Gillette is so big now, it can’t fail, it’s big enough now to go on its own, it doesn’t depend on those oil field jobs, we got so many people living here now…”.  Within a few years, the trucks, motorcycles, boats, and RVs were being repossessed.  Whole apartment buildings became vacant or were never completed.  The oil and gas drilling had stopped.

Here in Dickinson, there appears to be the belief that there are so many people in Dickinson, that the economy is big enough to not be dependent on the oil drilling.  As an example of this belief, look at the new apartment buildings that have been constructed in 2012, 2013, and 2014.  There are approximately eighty new units at the south end of State Avenue, approximately two hundred new units at the north end of State Avenue, approximately eighty new units near the new Menards, approximately one hundred fifty new units north of the North Park RV Park.  Just to the west of Tooz Construction there are about one hundred new units.  I have probably left out some of the new apartment buildings.  The North Park RV Park, the Heart River RV Park, and the South Park Trailer Park have probably doubled in size.  There are about four new large “Extended Stay” hotels.

I partly want to find fault with the real estate developers/investors, and then again I don’t.  It is good that there are more places to live in Dickinson, it was necessary to have more places to live.  If you have read my previous blogs, you can’t stay at WalMart, the truck stops, or Patterson Lake anymore.  You can’t live in a tent in someone’s backyard for $700 a month anymore.  However, I don’t know how much longer the new housing units are going to be needed.  The real estate developers/investors and new home buyers have got to be thinking that the oil drilling is going to continue for more than several years, either that, or they think that the economy is so big in Dickinson now that it is not entirely dependent on oil drilling.

An indication that the real estate developers/investors have seen the possibility of the oil drilling not lasting more than several years, is the extremely high rent prices. You might have read in my previous blogs that a one bedroom apartment will be at least $1,500 per month, and that a two or three bedroom apartment will be $2,000 to $3,000 per month.  The high rent, I believe, is in part due to the real estate developers/investors realizing that the oil drilling could stop, and that they need to get back the money they invested as soon as possible, while they still can.

My point in this particular blog, is again, to look at what has happened in the past.  In Gillette, Wyoming, there was an oil and gas drilling boom, many new housing units were created, with the expectation that the economy would not fail.  When the drilling stopped, apartment buildings became vacant or were never completed.  Be aware of what could happen, and plan accordingly.

Oil Field Speculation in Dickinson, Part I

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I arrived in Dickinson, North Dakota, in May of 2011, stayed for eight months, then came back in May of 2013, and have been here since.  I have become friends or acquaintances of several long time residents who are now in their 60s, “DS”, “IB”, and “CL”.  I have to use these initials to protect their identities.  Each of these individuals had business and social dealings with each other, so I have been able to cross check what each of them has told me.

In approximately the mid 1980s, there was an oil boom in Dickinson.  Many local people were making a great deal of money.  “CL” was about thirty years old, and at this time he bought a new truck, a new car, and a manufactured home in a twelve month period.  His friends and acquaintances did the same thing.  Within a few years, “CL” had to move back in with his parents, and had to go to work at a grocery store, because that was the only job he could get.  The same thing happened to his friends, they went from having their own homes and new cars, to living in apartments and driving beaters.  The oil field jobs went away, and it was hard to find even a low paying job in Dickinson.

Within a couple of years of the oil field jobs going away, property prices had fallen tremendously in Dickinson.  “IB” and a business partner were able to scrape enough money together to buy some warehouses on several acres of land for about $6,000 each, even though it was very hard to earn money in Dickinson at that time.  “IB” and his business partner had worked in the oil field and they strongly believed that eventually the oil drilling would have to come back to Dickinson.  “DS” was about forty years old, and he was able to buy 30 acres of land that nobody wanted for about $20,000.

When I got here in 2011, “IB” and his business partner were getting about $30,000  per month in rent from the different warehouse buildings that they had bought, I was told.  Once I found out which warehouse buildings they were, and what they were charging for rent, that dollar amount was approximately correct.  “DS” had his property for sale for about $3 million.

Both “IB” and “DS” were stressed individuals.  They had had to go through a lot to buy their properties when money was scarce, and hold onto their properties through bad economic times, over about twenty years.  Nobody knew when or if the oil drilling would come back.  If it would have been a sure thing, real estate prices would not have gone down, and everybody would have bought property.

Rather than this being a lesson in investment, I want this to be a warning.  The oil drilling came to Dickinson in the past, everybody was making money for a few years, and then the oil drilling went away, leaving many people broke.  Many people spent the money they had made very quickly because they thought that their jobs would last longer than they did, and that they would have the chance to pay off everything that was bought on credit: cars, motorcycles, boats, homes.  Keep in mind also that real estate prices dropped tremendously within a few years.  There were very few jobs in Dickinson then, and the jobs were low pay.  Do not fail to understand the lessons of the past, please try to remember what has happened before and plan accordingly.