North Dakota saw explosive growth thanks to an oil boom from 2010 to 2015 and several cities witnessed exponential growth during that time. The Williston Basin, including the productive Bakken Shale formation, and several of the nation's largest oil fields are in western North Dakota. For better or worse, sitting atop one of the largest oil reserves in the world, once sleepy villages transformed into thriving modern-day boomtowns.
Indeed, the success of the state’s oil industry helped one of the smallest populations in the United States enjoy one of the largest per capita gross domestic products (GDP). North Dakota boasts one of the lowest unemployment rate in the nation and was operating with a budget surplus of nearly $1 trillion in 2015. However, as oil prices slumped from more $100 to less $30 by early 2016, boom turned to bust in the biggest oil towns in North Dakota.
At the time of the 2010 U.S. Census, Williston was a quiet agricultural town with a population of 14,000. In the four years to follow, the population more than doubled to become the sixth-largest city in North Dakota and the fastest-growing small city in the U.S. City officials estimate the serviceable population of Williston was closer to 60,000 in 2015, as many workers from outlying rural areas found temporary, off-record housing anywhere they could.
- The oil boom from 2010 to 2015 led to rapid growth for North Dakota towns like Watford City and Williston.
- Along with low levels of unemployment and high wages came increased rents, crime, and accidents.
- Boom turned to bust when oil prices fell from more than $100 in 2014 to less than $30 in 2016.
- Many transient workers left North Dakota after the boom, but the industry invested in new technology to make oil production economically viable at lower prices.
With the introduction of improved techniques of hydraulic fracturing, or fracking, oil production in the Williston area went from under 1 million barrels a month in 2009 to over 6 million a month in 2015. There were 41 companies operating over 4,000 oil and natural gas wells on file in the area.
Before the oil boom, there were no commercial airline flights in or out of Williston’s airport. By 2015, over 1,000 seats were found in or out of town every day. Williston also received much of the state-approved $1 billion in highway investments to accommodate the thousands of semitrucks hauling oil on local roadways each day.
Rural farmland that sold for under $500 an acre before the oil boom was listed at over $250,000 an acre. Apartment buildings were completely leased out before they were even finished, with small one-bedroom units costing over $2,500 a month and modest three-bedroom units costing upwards of $4,000. By 2014, apartments in Williston, North Dakota, were the most expensive in the country, topping New York City and San Francisco.
Dozens of hotels and apartment buildings were built to accommodate the influx of workers. Modest motel and hotel rooms were rarely found for under $250 per night, as the oil companies booked them en masse for their employees. Despite the addition of hotels and the skyrocketing cost of new housing, there was still not enough to keep up with demand.
Most workers were fortunate just to share an RV in an open field on the outskirts of town in one of the many so-called "man camps." These makeshift, temporary neighborhoods served the purpose of providing shelter while not requiring any new infrastructure. Local residents also cashed in and went so far as to rent out their walk-in closets for as much as $1,000 a month.
The oil boom of North Dakota also had an extreme effect on the small town of Watford City, where the population jumped from under 1,400 to over 10,000 in just three years. The influx of thousands of oil workers from across the U.S. transformed this rural agricultural outpost into a 21st-century boomtown.
Oil production in the Watford City area went from under 2 million barrels a month in 2011 to over 13 million in 2015. The oil-rich lands had 59 different companies operating over 7,000 wells in McKenzie County. The town was doing everything possible to diversify its business base, understanding that oil companies would leave one day. Leveraging the improved infrastructure, revitalized downtown area, and increased workforce, officials wanted to attract other industries—such as banks and manufacturers—to the area.
The oil industry had staggering effects on almost every aspect of the local economy. New restaurants, movie theaters, and retail stores popped up throughout the area. Many of the new businesses catered to the new residents of town, most of whom were male. In addition to strip clubs, there was even a coffee shop where the baristas were scantily dressed. The availability of so many high-paying jobs in the area made it difficult for smaller businesses to retain enough employees because workers could simply walked off the job, knowing they can go down the street and get another one for more money.
Boom vs. Bust
Crime and accidents dramatically increased in the once quiet North Dakota towns during the height of the oil boom. McKenzie County’s emergency services responded to about five traffic accidents a month before the oil boom, and they were called to as many as five a day in 2015. The sheriff’s office went from six officers to 22, all of whom shared four desks in a cramped 28-square foot station.
In many ways, the plains of western North Dakota during the oil boom were similar to the Old West. With tens of thousands of lonely men with pockets full of money, a growing problem with drugs and sex trafficking caused the FBI to step in and assist overwhelmed local authorities. The darker side of the oil boom even led to reports that Mexican drug cartels were operating in western North Dakota.
The boom was not sustainable. Crude oil prices were north of $107 per barrel in mid-2014 but fell sharply in the months that followed. By Feb. 2016, prices had dipped below $30 per barrel and the oil industry fell into a deep slump. Watford City and Williston took direct hits.
The barrels per day of crude oil produced in North Dakota, making it the second-largest oil-producing state in the U.S., according to an Aug. 2019 report from the North Dakota Department of Mineral Resources.
Yet, although oil production was cut and jobs were lost in the wake of the oil boom, the industry in North Dakota invested in engineers and technology to increase efficiency and output. Now, crude oil production is economically viable at $45 per barrel, well below the levels of $50 to $60 seen throughout 2018-2019. The Dakota Access Pipeline, which transports a half-million barrels per day, has also improved efficiency for North Dakota oil towns.
Meanwhile, the crime associated with the oil boom is no longer a major issue, as many of the transient workers and unscrupulous characters left the area when the industry turned to bust. Watford City is growing again and investing in housing, businesses, and improved sewer systems. Greater numbers of workers are bringing their families to the area to settle down permanently, rather than merely coming to the biggest oil towns in North Dakota for temporary work during the good times.