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by Norbert Höfler
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An oil field larger than Germany, Austria and Switzerland combined – that’s what they live on in North Dakota. The oil boom turns ordinary workers into millionaires. A visit to knights of fortune.
By Norbert Höfler, Williston
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The job wonderland begins just after the “Williston, North Dakota” sign. It’s Friday evening and the Walmart is very busy. Men and women in oil-smeared overalls stand in line. When it is my turn, the cashier looks up and asks: “Are you new in town? Are you looking for a job? With us you start at $ 17 an hour, after three months you get 23.”
When I later check into the motel, there is a sign in the entrance hall: “We are looking for staff.” The local newspaper “Williston Herald” prints the number of active oil rigs in the area on page one. At the end of December there were 181. Further down you will find the job advertisements in which jobs in the oil fields are offered.
Daily amount of oil: 15 trains with 100 wagons each
North Dakota is the new oil country. In recent years, fracking has been perfected here, in which oil and gas are pressed under high pressure with water and a mix of chemicals from shale and dolomite rock lying deep in the earth. The technology turned the world oil market upside down. Ten years ago only a few thousand barrels a day trickled from springs in the northern United States. Today they produce 1.1 million barrels per day (1 barrel corresponds to 159 liters). A quantity that fills 15 trains with 100 wagons each. In Texas and many other US states, too, they use the new conveyor technology to pull millions of barrels of oil out of the ground every day. The USA thus became the new oil power.
Although the price of oil is falling, in North Dakota they firmly believe in the never-ending boom. Every entrepreneur and company director I met said: “We are looking for good people.”
Unemployment here is 0.8 percent. The wages are above average. We are looking for unskilled workers and specialists. The main thing is that you really want to work hard. Even at McDonalds, they pay $ 20 an hour. A truck driver who supplies the oil fields makes up to $ 120,000 a year. Average earnings in the US are half that. The unemployment rate in the country is six percent.
The modern gold diggers are drawn to Williston, the center of the boom. Three typical stories:
Rich Vestal, 66, ehemaliger US-Soldat …
… from Montana, stationed in Garmisch-Partenkirchen in the 80s, made oil a millionaire.
Rich Vestal doesn’t last long in his company’s new conference room. He prefers to show what his company makes $ 50 million a year in sales and that is best from his heavy red SUV.
Vestal is a great thing in Williston. His company Red River Supply owns over 100 trucks, his own marshalling yard with diesel lock, dozens of warehouses, silos and special equipment. Vestal supplies the oil producers in the region with material 365 days a year and around the clock – from drill rods to the ingenious mixture of sand and chemicals for fracking. He says, “I grow with my customers.” Which in his case means a doubling of the business every few years – and a near bankruptcy.
In the 80s it almost folded it
“It almost folded me during the crisis in the 1980s,” he says. At that time the oil price plummeted and triggered a chain reaction: the oil producers withdrew, the suppliers collapsed, shops and restaurants closed. Many moved away. Williston shrank. Rich Vestal learned from this that the price of oil is unpredictable, that one has to prepare for the next crisis in the boom.
In the evening at “The Williston”, a restaurant and business club, Vestal explains how he runs his company. His financing method is very old-fashioned, he warns and then says: “If I have money left, I’ll buy something.” That could be a truck for $ 100,000, a warehouse or a new company headquarters for a few million. He works as little as possible with banks. Little debt, little risk.
700 square foot ranch in Montana
Men with dirty work boots are sitting at the bar. Vestal points over, “Many of them are very rich. Some have vacation homes in Florida or California.” Vestal himself owns a 700 square kilometer ranch in Montana. He likes to fly there over the weekend in one of his three own planes. “It’s so quiet. Not a soul. Wonderful.”
Business in the millions are handled with a handshake in the Williston. “I do it that way too,” says Vestal. Writing contracts takes too long and is too expensive. Often the self-made entrepreneurs would not even be able to draw up a multi-page contract.
A farmer and his wife are sitting at the next table. Vestal says: “They were lucky. Many families sold the mining rights under their land to oil companies years ago. The two kept everything and now get a fat check every month for the oil that gushes from their wells.” Silent millionaires, that’s what they call these people in Williston. You are literally sitting on your wealth. When the oil price rises again, they’ll be swimming in money.
The money is under the street
Vestal says: “The Bakken oil field is like a bank for us. The money is in there. You just have to get it out.” He believes his grandchildren’s children will also live on oil under North Dakota.
Anetta Replogle, 42, former barmaid …
… Anetta Replogle, 42, a former bartender from Las Vegas, wants to get rich in Willison. She says, “The oil is the chance of my life.”
Anetta Replogle has already tried a lot. At 19, she moved to Las Vegas from a small village in California. She worked in bars and casinos. (“Believe me, nothing knocks me out.”) In the end, business in the Gambling City was sluggish. Four years ago Replogle searched the Internet for “booming regions in the USA” and found “Williston” in the top places. “When I got into town, there were 500 people camped in the Walmart parking lot. There were no houses or apartments for them.
Replogle also slept in her car, then in cheap accommodation. There the water came from an old borehole. It was so contaminated that her hair turned purple. So she showered in the oil workers’ barracks next door. Today she owns a men’s camp with 40 beds. The night is $ 25. And she bought The Daily Addiction Cafe on Main Street, which quickly became the hangout for the town’s teenagers and young mothers.
Population doubled in ten years
Now Anetta Replogle wants to take advantage of the “small crisis” and buy more land and real estate. The prices are now cheap. She doesn’t have time for a man. Anetta is single. “The streets here have never been covered with gold, you have to work hard.”
Christie Smith is sitting with friends at the round table by the window. They talk about their husbands’ wages. Christie’s husband, who works on a derrick, didn’t get a bonus in the last month. When she talks about it, the lights and music go out in the cafe. “Don’t worry, Replogle calls out, I’ve paid my electricity bill.” The power grid sometimes collapses here. Williston is growing too fast. The number of residents has doubled over the past ten years to over 30,000.
Anetta says, “The oil field under our feet is like Las Vegas. It won’t be over anytime soon.”
America sits on oil. Around nine million barrels are fracked and pumped out of the ground from North Dakota to Texas every day. And although fracking is relatively expensive to work economically, the price per barrel would have to be around $ 60. It’s not even $ 50 right now, so it’s not worth the effort right now. But that doesn’t matter, the US will still continue to squeeze the oil out of the soil. This has now been confirmed once again by the Ministry of Energy.
Because the new fuel wealth helps the whole country. Low energy prices stabilize and stimulate the economy. Even for companies like Dow Chemical, BASF or Alcoa, which need a lot of cheap energy for their production, the USA remains an attractive location. They are even building new factories in the country. US President Barack Obama is already talking about a “re-industrialization” of the USA. The country’s economy grew by a sensational five percent in the third quarter. The world is experiencing an oil glut. The price of a barrel of oil fell by almost 50 percent in the last six months.
Dan Sandaker, the pioneer in Williston
He has been working in the oil fields for 15 years. He brought it from the “Roughneck”, one of the people who does dirty work, to the boss on the derrick. A proud man.
Dan Sundaker is in command of the derrick behind the embankment this Saturday afternoon. From up here he could see Williston’s numerous church spiers, the new housing developments and warehouses, the icy arm of the Missouri, the five pheasants in the underbrush.
But his gaze is fixed on the three monitors, his right hand is holding the joystick. The drill will soon reach the 600 meter mark. Then it is another 2500 meters until the stainless steel head reaches the Bakken Formation, a gigantic oil deposit. Although it is only 40 meters thick, at 520,000 square kilometers it is as large as Germany, Austria and Switzerland combined.
Experienced the boom from the start
The drill then slowly bends until it eats its way horizontally for many kilometers towards the south, into the interior of the Bakken. Later they dismantle the derrick and the Frakker go to work. 24 billion barrels of oil are said to be stored down there. A lot that could cover Germany’s needs for 30 years.
Sundaker stops the machine, new drill rods are put on. Time to talk. He’s seen the North Dakota boom from the start. He has been with us for 15 years. At that time they dumped the poisonous drilling mud into deep pits next to the production site, the technology was clumsy, fracking was very dirty and still very expensive. Today we work much more efficiently and cleanly. Even the drilling mud is processed on site and what is left is carted off to special landfills.
North Dakota experienced an oil bonanza. The price of oil rose to over $ 115 a barrel last summer. Every well in the Bakken oil field was profitable at that price. That changes at $ 60 a barrel. “It can’t go much deeper,” says Sundaker, “otherwise many will have to give up.” The oil producer Oasis Petroleum, for which Dan Sundaker works, announced at the beginning of the year that it would gradually reduce the number of its drilling rigs from 16 to six.
The oil price is rising again. Any bet
Sundaker firmly believes that the price of oil will rise again in a few months. “That’s my feeling,” he says. And if not? “Then we stop production, the pumps can be switched off and on at any time.” Unlike in mining, the extraction points do not have to be laboriously maintained during a standstill.
Sundaker knows this from the 2008 crisis. The price of oil fell from $ 136 per barrel to below $ 30 in just a few months. First overtime was reduced, later drilling and production facilities were mothballed and people made redundant. The oil boom returned two years later. Stronger than ever. He’ll bet on that.
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