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Oil Wealth Attracts Businesses to North Dakota

Oil Wealth Attracts Businesses to North Dakotai
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Kane Farabaugh
August 16, 2014 1:53 AM
The state of North Dakota has one of the lowest unemployment rates in the country, thanks to a glut of jobs created by the oil boom in the western part of the state, which rests on one of the largest shale oil deposits in the country. As VOA’s Kane Farabaugh reports from Williston, North Dakota, the job market keeps growing as more businesses relocate to North Dakota, attracted by the promise of profits -- but not without challenges.
Kane Farabaugh

The state of North Dakota has one of the lowest unemployment rates in the country, thanks to a glut of jobs created by the oil boom in the western part of the state, which rests on one of the largest shale oil deposits in the country. The job market keeps growing as more businesses relocate to North Dakota, attracted by the promise of profits -- but not without challenges.

The once-sleepy town of Williston, North Dakota, is now a booming hub of business, thanks to new ways to extract oil from shale deposits in the region. And everyone wants a piece of the action.

“Williston right now is the fastest growing micropolitan in the nation -- that’s cities under 50,000,” said Shawn Wenko, the Assistant Director of the Williston Economic Development Office. He admitted his organization -- and the state of the North Dakota -- are having a hard time keeping up with the number of people and businesses pouring in to the region.

“You just see the construction that is going vertical is phenomenal. We’ve done over $1.2 billion in permit valuations in the last year in the city of Williston,” he said.

Manufacturing muscle

Vactor Manufacturing received one of those permits. The Illinois-based business makes large industrial vacuum systems mounted on trucks.

Typically used by municipalities as way to clear out sewers and storm drains, Vactor’s equipment also can be used at oil rigs and storage tanks -- increasing the demand for its products in North Dakota’s oil fields.

General Manager Sam Miceli said his company recently built a service center in Williston to maintain the trucks and equipment they’ve been selling to companies in the oil fields. “There’s probably 25-plus competitors in the marketplace, and all of them are trying to get into North Dakota.”

“Being able to support that piece of equipment, it’s a harsh environment, it’s a highly demanding market, so when a machine goes down or they need a spare part, they need it now,” said Miceli. “I’ve never been in a place where money is no option. If you have it, I’ll pay for it.  Which is a real interesting prospect for a manufacturer. So our challenge is figuring out how to get more of it out there.”

He said one of the biggest challenges, though, has been recruiting and retaining service center employees.

“You not only have to pay well, but you have to provide housing and you have to provide incentives to keep those guys on your job,” said Miceli.

Challenges appear

Because of higher rates of pay for many jobs, North Dakota leads the nation in net migration. The state’s economy has grown five times faster than the national average over the last several years -- and the western part of North Dakota is expected to see a 50 percent population expansion over the next several decades as more companies try to cash in on the oil boom.

Which is why Shawn Wenko said Williston is planning for the long term. “We’re going to put $258 million into our roads. We’re looking at upgrading our waste-water treatment facility, upgrading our airport, upgrading our landfill, upgrading city government buildings, fire halls, police stations, everything that makes a city go round.”

That should help deal with two other factors that are growing -- the need for social services, and the crime rate.

 

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