North Dakota’s oil-rich Bakken region: boom, busts and trouble

The strip clubs in Williston, N.D., are the rowdiest that Tatiana, an exotic dancer who has performed in Las Vegas and New York, has ever seen. Oil workers coming off the nearby rigs pack the city’s two clubs, Whispers and Heartbreakers, every night. They smell like work. They wear dirty T-shirts. They fall asleep face first on the bar. And then there are the prostitutes. Tatiana, who asked that her real name not be used, noticed them wandering though the crowd looking for customers on her first night in North Dakota. “They’re not in there to tip the dancers,” she says with a laugh.

Williston is the heart of Bakken oil country, the Fort McMurray of the U.S.’s north, for all the good, and bad, that brings. There are at least 3.1 billion barrels of recoverable oil trapped in the Bakken shale, a teardrop-shaped formation spread between North Dakota, eastern Montana and Saskatchewan, and likely many billions more. In recent years, new technology and high prices have made that oil both easier to get at and more valuable to sell. Today the race to pump it out—via a complex process known as hydraulic fracturing or “fracking”—is running at an Olympic pace.

As a result, North Dakota’s economy is the hottest in the U.S. Unemployment there was just three per cent in March, the lowest in the country. In neighbouring Montana, where oil exploration has been far more modest, the jobless rate stands at six per cent, well shy of the national average of nine per cent. All those jobs have served to make the Bakken region a magnet for newcomers. As many as 30,000 job hunters are expected to flood the area in the coming years, either to work for oil companies directly or, like Tatiana, to sell things to those who do.

Mostly, the people of the Bakken region have done very well because of the boom. But all that new money and all those new people have brought problems, too, much like those Alberta suffered when oil sands fever was at its peak. Builders around Williston can’t keep up with the need for new housing. The rental market in the entire area is out of control. In Estevan, Sask., just over the border, you can’t find a one-bedroom apartment for less than $1,200 a month, says Mayor Gary St. Onge, a price that would have been unheard of even three years ago. To keep up, oil companies are lodging workers in temporary “man camps”—dormitories or clusters of trailers where they sleep between 12-hour shifts.

Crime, meanwhile, has exploded. Some towns and cities in the area have reported double-digit growth in property crime and drug seizures in the last two years. More seriously, in January, Sherry Arnold, a teacher from eastern Montana, was kidnapped and killed while out on a run. Police have charged Lester Van Waters and Michael Spell, Colorado natives who travelled north looking for oil work, with her murder.

Late last month, officials from Montana, North Dakota and Saskatchewan gathered to swap tips on how to cope with the rising tide. Unlike Alberta’s oil sands, the Bakken formation is spread across multiple jurisdictions, including two countries and several native reserves. As a result, the problems it brings are more complicated to resolve. RCMP investigator Mercer Armstrong told the Associated Press that Saskatchewan has seen a major influx of crime linked to the Bakken boom. Drug gangs from British Columbia are moving east to establish new markets, he said. In Weyburn, Sask., just an hour north of the border, the crime rate has jumped nearly 50 per cent in the last decade, says Marlo Pritchard, the police chief. In Estevan, the Violent Crime Severity Index, an aggregated measure of serious reported attacks, more than doubled between 2000 and 2010.

The boom has also meant a massive increase in commercial traffic coming north over the border. Like the oil sands, the region suffers from a shortage of pipeline capacity. To get their product to market, many producers are shipping it north on tanker trucks, then sending it to the refineries by train. Some of those drivers are bound for Estevan, where they load their product onto the CP lines in the middle of town, which, Mayor St. Onge admits, is “a little bit dangerous.”

As for Tatiana, she says she’s had dancers email her, asking whether it’s true she earns $2,000 a night in Williston. That’s just another oil boom myth, she replies. “A lap dance is $20; of that, you keep $15,” she says. “To make $2,000 a night, you’re going to have to do a hell of a lot of lap dances.”