ND Oil Boom Creates New Growth Opportunities for Area Businesses
by Kevin Bonham, Grand Forks Herald
Posted on 8/6/2012
Luke Holen had been working in the Oil Patch of western North Dakota for about three years when he returned home to Walhalla with an idea on how he might cash in on the oil boom.
Luke and his father, Harry, started Holen Trucking this past winter, hauling production water used in drilling oil rigs - not water for fracking, the hydraulic fracturing layers of rock to extract oil.
They bought their first truck in December, and just added a second one to the operation. The business includes a vacuum trailer for the job, too.
"It's going very, very well," Harry Holen said this week.
The Holens are two of a growing number of people and businesses in the Red River Valley finding niches to fill in the rapidly expanding Oil Patch.
"There's quite a lot of activity in the valley with the oil industry," said Julius Wangler, executive director of the Red River Regional Council, which assists local businesses with start-ups and expansions. "There's maybe 10 or 12 companies that I know of that are doing some work there or working on it. In the future, I think there's going to be much more of that."
Not just trucks
Besides start-ups, several established companies in the valley are expanding their operations, according to economic development officials in Grand Forks, Steele, Traill and Walsh counties.
And it's not just trucks.
For example, EnduroPlas, a Neche manufacturer of polyethylene tanks for the agricultural industry since 2004, has expanded into the oil business over the past three or four years, according to Greg Firth, managing director.
It's a growing sideline for the private company that now annually produces 200 to 300 tanks, which are sold to companies in the Oil Patch. The company has about 40 employees who work on both ag and oil industry products.
"It definitely is building," he said. "We have expanded a lot in the last few years, and we'll be expanding in the next year. We think we can get more out of it, but it's competitive. We build a good-quality tank."
Not for everybody
While there are opportunities in the Oil Patch, some who have found a niche say it's not for everybody.
"It's not something that you're going to go out there and say ‘Here I am.' It's tough to get your foot in the door," said Harry Holen.
He said they were fortunate because son Luke was well-known in the Oil Patch from working there for a few years.
"So many companies come in with lots of trucks and lots of equipment, so they have a lot of bargaining power," he said.
Holen said his family start-up initially tried to finance the business with banks in the Oil Patch.
"That's financing in the fast lane," he said.
They ultimately sought assistance closer to home through the Red River Regional Council, based in Grafton, and North Star Credit Union, Cavalier.
Besides Holen's second truck, the company also is looking at another kind of expansion, branching into the manufacture of specialty equipment for the oil industry.
"There is opportunity," he said. "But to get into it, you've got to know the business. You've got to know the contacts and be able to provide a service that's reliable."