nd.gov - The Official Portal for North Dakota State Government
Not Going Away: Red River Valley Companies Still Have Stake in Bakken Business
Post Date: Sep 20 2017

The Grand Forks Herald

There was a time when 38 percent of JLG's Architects' work came out of Williston, CEO and President Lonnie Laffen said.

The Grand Forks business was so busy that it had to buy a company plane, which was cheaper and more efficient than driving every day from Minot, the closest city that had available hotel space, he added.

"I started seeing these reports of North Dakota becoming the next Saudi Arabia," Laffen said when he first saw growth estimates as a state senator. "It wasn't too difficult to translate that into what that was going to mean for population growth. As architects, we live on population growth."

The boom prompted the company to open offices in Bismarck, Minot, Williston and Dickinson. Like JLG, many Red River businesses planted a stake in western North Dakota, seeing opportunity that reached beyond black gold. The boom's downturn has tapered business, but many feel there is still plenty of work to do in the Oil Patch.

"There was a lot more work than we could have ever imagined," Laffen said. "There still is a lot of work."

Opportunity out west

There was opportunity in the Bakken, with companies in the Red River Valley looking to fill a need.

"It was a little bit of going for it, but we got called," Laffen said. "There were not enough resources in western North Dakota to do the work."

The Oil Patch still draws help from businesses from multiple states, including Minnesota.

"The oil boom is a huge driver of a geographical area that is about four states," he said.

The larger needs focused on housing and infrastructure, and architects and engineers in the Valley started to make their way to the Oil Patch.

It helped that some Red River Valley companies, like Advanced Engineering and Environmental Services of Fargo and Grand Forks, had locations in western North Dakota, said Steve Burian, CEO and chief financial officer for AE2S. The engineering firm had a location in Williston and has had a presence in western North Dakota since the 1990s. By the time the oil boom wrapped up it had opened three more offices: Dickinson, Minot and Watford City.

"At one point, there was enough work coming out of western North Dakota that we had every office in the company working on it in some shape or form," Burian said.

JLG had its hand in high-profile projects, most of them public. That included the Watford City and Williston high schools and recreation centers, courthouse updates and new residence halls at Williston State College.

AE2S was involved in expansions to Williston's and Watford City's wastewater treatment plants. It also worked on several street projects, as well as other private and public projects.

A focus of the growth was in the service industry and durable goods, said Andy Peterson, president and CEO of the Greater North Dakota Chamber.

"Since things have slowed down out there. It's hard to say who remains out there and to what extent they are working out there," he said. "Things out in the Oil Patch have become more related to the industry versus a boom environment, and I think that is a natural progression of any boom."

'Business was exploding'

Retailer Home of Economy had stores in western North Dakota for decades before the boom, but the oil activity spurred massive growth for the Grand Forks-based retailer, CEO Scott Pearson said. The business rebuilt its Williston and Minot locations and added a Watford City store by the end of the boom.

"Business was exploding," he said. "It was unpredictable, it was difficult to anticipate the increased amounts of products."

As more oil workers moved to the area, Home of Economy needed to adapt to the demand in products. That included offering flame-resistant clothing, and Pearson estimated every worker needed about $1,000 in the oilfield-required work wear.

"Our Williston store ... was one of, if not, the largest-volume dealers in Carhartt (flame-resistant clothing) in the world," he said. "We were told by them that we were the largest volume Carhartt dealer in the world in a single location."

Business dropped by half at the Home of Economy locations in western North Dakota since oil prices have plummeted, Pearson said. But it's slowly coming back and is more manageable than during the boom years. "Sales are increasing nicely now in a much more orderly way," he said. "It isn't like it was where it was unpredictable. At least now we feel like we are able to have a handle on it and stay in stock with appropriate amounts of product and the right product."

Coming east

At least one Oil Patch business saw opportunity in eastern North Dakota.

Dickinson-based manufacturer Steffes purchased facilities in Grand Forks in 2012 and 2014 to meet a demand for oilfield products. That added about 130 employees to the company's workforce of roughly 320.

"The demand for our products exceeded our ability to recruit and retain people in that market," Steffes Chief Operations Officer Paul Eidenschink said. "One of the things that was attractive to us to get into the Grand Forks region and the Red River Valley was the availability in the workforce."

Steffes was one of the few businesses that expanded from the western side of the state to the Valley, Peterson said.

The downturn of the boom forced Steffes to lay off workers, but it adapted to the needs of the area so it could hire enough employees to bring the count back to boom-era numbers, Eidenschink said.

'Not going away'

Work has leveled off in the Oil Patch, but it hasn't stopped, Laffen said.

"When the prices dropped ... the first thing that shut down was all of the private work," Burian said, though local governments still had projects that needed to be finished.

That work lasted into 2016. Work has slowed for AE2S, but Burian said the company is committed to keeping its employees in western North Dakota there. It also plans to keep its offices open.

Businesses have left, but the ones that succeed in the Oil Patch are those that have invested in the communities, Burian added. AE2S participates in the annual rib fest in Williston and bought a clinic to convert into apartments.

"We want to actually be a part of western North Dakota and not just opportunists," Burian said.

Depressed oil prices may have slowed business in the Bakken, but technology is advancing and oil will continue to be a large part of North Dakota's economy, Laffen said.

"It's not going to go away," he said. "There's a need and technology is changing. It's going to be an awesome industry for a long time."

Not Going Away: Red River Valley Companies Still Have Stake in Bakken Business - The Grand Forks Herald

Things to do in North Dakota Learn about Main Street