Communities adjust to less oil spending, plan for future growth.
Shawn Kessel hears the same story from businesses throughout Dickinson, North Dakota — whether it’s a small coffee shop across from the county courthouse or companies directly involved in the oil industry — low oil prices have created a more challenging economic environment.
“Everyone is feeling it in their tills,” says Kessel, administrator for the City of Dickinson. “Overall, however, Dickinson is fortunate since we have a diverse economy. I know several manufacturers looking to add workers. As the oil industry has slowed down, we’re seeing others pick up. These companies may not pay as much as the oil ones, but they are still good wages.”
Throughout the Bakken region, the scene is played out again and again — lower oil prices mean the oil companies are cutting back, sending shockwaves through communities that have thrived in recent years due to the fracking boom. The number of oil rigs in North Dakota is at its lowest number in six years, with the Department of Mineral Resources estimating that every rig equals 40 direct jobs and 80 indirect jobs.
Although businesses — and residents who have lost their jobs due to oil industry layoffs — are hurting, there isn’t much local communities and economic development organizations can do beyond lending a listening ear and utilizing programs already in place to help with job creation.
“There’s no doubt we’re feeling the pain and would love to have some of those (oil) jobs back,” Kessel says. “Our economy is down, but not as much as some other areas.”
In Williston, which has been named the fastest-growing micropolitan area in the nation for four years in a row, the industry slowdown is giving leaders a chance to take stock and plan for what’s next. In 2014, the city’s population grew by 8.7 percent.
“We see ourselves going from boom mode to business mode,” says Shawn Wenko, executive director for the Williston Economic Development Department. “This is giving us a chance to catch our breath and get ready for future growth. The industry will come back, and when it does we’ll be in a better position. There’s still a lot of (oil industry) business being done.”
That doesn’t mean that businesses haven’t felt the effects of less money coming in, Wenko says.
“There’s definitely a ripple effect and we’re seeing some slowness, but it’s not a drastic slowdown as some people think,” he says. “We have a lot of catch-up work to get where we need to be when the industry bounces back.”
Williston is working with consultants to build up its retail and restaurant base, and those businesses are getting more competitive with different offers to lure in customers, but “they’re still busy. It’s just natural market competitiveness,” says Wenko, adding the community has programs in place to encourage business development. “We have a very pro-business community where both new and existing businesses can thrive.”
Like Williston, Dickinson saw massive growth during the oil boom.
“Before we had three or four coffee shops, now we have 12. We went from eight hotels to 17,” Kessel says. “It’s not necessarily just a decline in spending, but also what once had to be divided four ways, for example, now needs to be divided 12 ways.”
Although Kessel says area businesses are feeling the pain, there’s not too much local community leaders can do. He says local officials have kept an eye on job numbers and watched how more and more jobs were based on the oil industry.
“If it gets too high, you get nervous because if something like this happens, the whole community is hurt,” Kessel says. “We’ve been fortunate to be more diverse. That has helped us in the downturn.”
Despite the less-than-positive news from the oil sector, Wenko remains optimistic for Williston’s future. “We’re still growing and looking forward to settling into a long-term growth pattern,” he says.
Comments