In North Dakota, hints of US oil industry comeback

In the chilly air before dawn, a handful of men and women huddle in front of a small, one-story building on the outskirts of Williston.

They are waiting for Central Command, a temporary work agency, to open. 

Workers in this oil town in the US state of North Dakota, just an hour from the Canada border, once had their pick of jobs. Many are now looking for any work they can find.

"They don't have very many jobs for us right now," said Heather Scallion, who traveled some 1,300 miles (2,100 km) from Arkansas, thinking there was still low-skilled work here.  

"Hurting for money, honestly," she explained.    

Nearby, a ragged man in his 30s slept on a couch. Scallion was fairly certain he was homeless, because he slept on the same spot every day, wearing the same clothes.

Just minutes from this temporary work site, at the state-run employment agency Job Service North Dakota, it is a far different world. There is a shortage of workers for highly skilled positions in drilling and oil pump maintenance, among others. 

"There were layoffs when oil really tanked," said Cindy Sanford, who heads the agency's Williston branch. "Now what's happening is those companies are bringing people back."

North Dakota is now seeing hints of a recovery from the bust. As crude prices have rebounded to the $40 range after a stunning crash, there are signs that the industry is slowly regaining its footing.  

But the recovery has been uneven, a distinct case of the haves and the have-nots, as skilled laborers see their prospects improving, while the less desirable workforce feels little optimism. 

  - Oil boomtown -

The Command Center offices are just across from the train tracks that used to ferry coal, livestock and grains, but now shoulder trains loaded with crude from the vast oil and gas deposits that lie deep underfoot, known as the Bakken and Three Forks formations.  

When hydraulic fracturing, or fracking, and horizontal drilling techniques made those deposits easier to reach, Williston became the epicenter of North Dakota's oil production.

The industry turned the sparsely populated state into a buzzing hub of investment and hiring starting in 2010, while the rest of the US economy was still stuck in low gear.

At the height of the boom in 2014, Sanford said that they could be so desperate to recruit workers they just had to make sure candidates were alive.

"We'd laugh and we'd say, 'Breathe into the mirror. Oh, it didn't fog up. Try again,'" said Sanford.

In those heady days, low-skilled workers  could easily earn $18 an hour. Williston doubled in size in about four years, to roughly 30,000 people.

Then, the price of oil plummeted, from highs above $100 a barrel to below $30,  forcing many drillers to shut down their operations and lay off tens of thousands. Booming Williston went bust. 

 - Hints of recovery -

From his truck, Monty Besler points to so-called "man camps," make-shift mobile housing developments once buzzing with out-of-town workers. They now sit empty.  

"We've lost a lot of companies," said Besler, an oil industry consultant, whose license plate reads "Fracn8r" - as in "frackenator," a nickname given to him by colleagues.  

Besler has seen boom and bust cycles before.  

"We'll have a winnowing, and in the process the stronger companies will survive," he said. 

He has reason for such optimism. 

While oil production still continues to decline, analysts expect it to stabilize next year. Meanwhile, the number of active oil rigs is rising again and they have become more efficient and productive, according to the US Energy Information Administration.   

"The industry is going to resume a very modest, but positive, growth in supply in 2017," said Raoul LeBlanc, a US energy analyst at IHS. 

He cautioned that even though jobs are starting to return, salaries are generally lower than in boom times. "We may never get back to the levels of employment that we had," LeBlanc said.  

But Besler believes the industry can rise again. If prices can be sustained in the $50-60 per barrel range, Besler said, "that starts to bring the outside money back in, the investment groups that were pouring money into the Bakken before." 

The city of Williston is anticipating that Bakken will power the local economy for decades to come, budgeting $1 billion on roads, bridges, and a new airport.  

Companies are once again competing for workers. A recent job fair had 56 companies planning to fill 300 positions.

This is all cold comfort at the Command Center, where few of those jobs are expected to reach low-skilled workers any time soon. Kyle Tennessen, the center's manager, is certain he will continue to have more people lining up for work every morning than the number of jobs he can offer them.  

"There's going to be another boom. When is the giant question mark," Tennessen said.

Source: AFP