Boom Town Presses Pause Amid Dramatic Drop In Oil Prices
KELLY MCEVERS, HOST:
In the past year and a half, the price of oil has fallen dramatically, from over a hundred dollars a barrel to less than $40 a barrel. That one number, the price of oil, has consequences for countries like Saudi Arabia and Iran but also for some towns here in the United States. David Kestenbaum, with our Planet Money podcast, checked in with Williston, N.D.
DAVID KESTENBAUM, BYLINE: I visited Williston three years ago. Back then Williston was this perfect example of a fracking boomtown - thousands of workers flooding into this little town to drill wells. The population had doubled, and in the early days, there was not space for everyone to sleep. Back then, Rich Vestal, who runs a supply company in town, needed some place for his new workers to stay so he bought an extra house. That's how it started.
RICH VESTAL: It was down by our old warehouse. We paid about $10,000 for it.
KESTENBAUM: Then he bought another one.
VESTAL: We bought the house right next door from the lady that lived there. She passed away so we bought it from her estate.
KESTENBAUM: Also one by the cemetery.
VESTAL: We bought 14 trailer houses up in a trailer park.
KESTENBAUM: There's more.
VESTAL: We bought some condos.
KESTENBAUM: Grand total.
VESTAL: We got 68 now.
KESTENBAUM: You own 68 houses.
KESTENBAUM: One other sign of a boomtown back then - to keep all the residents happy during the cold winters, the city was planning to build this gigantic gym. By some measure or other, it was going to be one of the largest of its kind in the country, built in this tiny little town.
SHAWN WENKO: Workout facilities, golf simulators, batting cages.
KESTENBAUM: Shawn Wenko, with Williston's Economic Development Department, went over the plans with me.
WENKO: Tennis courts, racquetball courts, basketball courts. A turf field, running track. It's got three swimming pools in there.
KESTENBAUM: Three swimming pools?
WENKO: It's got three. It's got an Olympic-sized swimming pool, a dive pool and a lazy river.
KESTENBAUM: What's that?
WENKO: A kind of an inner-tubing style of river.
KESTENBAUM: Indoors, up here in North Dakota?
WENKO: Indoors, correct.
KESTENBAUM: So that was Williston, N.D., three years ago, an empire being built solely on the price of oil. The price of oil since then, of course, has plunged. To see how things are today, I called up Ward Koeser, who, when I visited, was the mayor. He was mayor for 20 years. I asked him how it feels walking around town now.
WARD KOESER: Well, it feels good, to be honest with you. I mean, I wish it was busier, don't get me wrong. I have a small business, and we certainly aren't as busy as I'd like us to be. But the town itself is doing OK.
KESTENBAUM: I remember you saying something like, everything is going to be fine as long as the price of oil doesn't drop by 50 percent. And it basically has dropped by 50 percent.
KOESER: Oh, yeah. I'll be honest with you. I never expected it to go down this low.
KESTENBAUM: The city's finances seem OK, he says. It didn't take on more debt than it could handle. Property values have dropped, he says, which is bad news if you built a big housing development. But on the flipside, visitors can now find a place to stay. The new restaurants that opened, they are still open, and for once not so crowded. The town is bigger and the population seems stable. Someone has to stick around to keep the existing wells running. Overall, he says, it is as if someone pressed a giant pause button because the oil has not run out. It is still there in the ground. It just doesn't make economic sense to be drilling so many new wells right now.
KOESER: The oil is there. Everybody knows it's there now. And it's just a matter of trying to figure out when it's going to become profitable again. But, you know, will it happen in 2017 or will it happen in 2027? I - you know, no one knows with oil, that's the challenge.
KESTENBAUM: If the price of oil goes back up, Williston could be a boomtown again. In the meantime, they do have a great new gym. Yep, it got built - lazy river and all. David Kestenbaum, NPR News.