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Episode 428: Turning A Boom Town Into A Real Town

Jan 8, 2013
Originally published on January 12, 2013 8:53 am

Williston, North Dakota is in the middle of an oil boom. Thousands of workers have flooded into the town, but they're reluctant to call it home. Instead, they live in bleak rentals, often sleeping in dorm-like trailers known as "man camps."

Local officials are trying to turn Williston into a real town, where people want to bring their families. But it's a tough sell.

On today's show, we visit Williston, and we learn why one guy endures a thousand-mile commute, why a one-bedroom apartment costs $2100 a month, and why the town is building an indoor lazy river.

Music: First Aid Kit's "Ghost Town." Find us: Twitter/ Facebook/ Spotify/ Tumblr. Download the Planet Money iPhone App.

Copyright 2018 NPR. To see more, visit http://www.npr.org/.

DAVID KESTENBAUM, HOST:

Rich Vestal knew things were bad when the local sheriff showed up to repossess his truck. Rich lives in a small town in North Dakota, and he owns a company called Red River Supply. You want salt or cement? He's your guy. But at the time, nobody wanted anything.

RICH VESTAL: We didn't have an order for 32 days straight - 32 days without an order. Yeah, it was pretty grim.

KESTENBAUM: That was in the early '80s, the end of the last oil boom out here. Since then, things started looking up. New drilling techniques came along. Oil companies flooded back into this little town, and Rich started frantically hiring workers. They came from all over the country. There was this one problem. The workers needed a place to live, so Rich bought a house for them to stay in.

VESTAL: It was down by our old warehouse. We paid about $10,000 for it.

KESTENBAUM: Then he bought another one.

VESTAL: Well, 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?

VESTAL: Yeah, you just take the headaches of owning one house and take it times 68. And we'll figure from there what the - how much fun that is, so yeah.

KESTENBAUM: This is the state of things in Williston, N.D. A man whose last truck was almost repossessed by the sheriff now has 100 trucks and 68 houses. Rich and this entire town have won the lottery. But as we all know, when you win the lottery, the glow does not always last. And people here, in the back of their minds, they have this worry. After booms, there are busts today on the show. How do you turn a boomtown into a real town? So it doesn't become what boomtowns often become - ghost towns.

(SOUNDBITE OF SONG, "GHOST TOWN")

FIRST AID KIT: (Singing) All of these ghost towns I keep traveling through.

KESTENBAUM: Hello and welcome to PLANET MONEY. I'm David Kestenbaum. And we have a special guest host today. Josh Marston, a great filmmaker, has been hanging out with us here at PLANET MONEY. And, Josh, you got me interested in Williston.

JOSHUA MARSTON: Yeah, I got interested in Williston because I was out there visiting a friend who's making a documentary. And Williston, it's a boomtown because it's a fracking town.

KESTENBAUM: And fracking, as you've probably heard, is this way of drilling - way of getting gas and oil out of shale. But this is not a story about fracking. This is a story about boomtowns.

MARSTON: You don't have to be in Willistown very long before you see that there are some major problems with being a boomtown.

GERARD FEIST: This is a one bedroom, 860 square feet. As you can see, a nice-sized bedroom there.

KESTENBAUM: Josh, you and I went apartment hunting with this guy Gerard Feist. And this place - just built, very basic, very vanilla - I mean, you could be anywhere in America - except for one thing, the price.

FEIST: The rent on this one bedroom - $2,100, I believe, for a month.

KESTENBAUM: A month?

FEIST: Yeah.

KESTENBAUM: It's basically New York-Manhattan rates.

FEIST: It is. Yeah, it is exactly.

KESTENBAUM: Could we negotiate the rent with you?

FEIST: No.

KESTENBAUM: It's non-negotiable?

FEIST: It's non-negotiable.

MARSTON: This place is not Manhattan. We're 50 miles from the Canadian border. And there's maybe one department store downtown. And the nearest sizable city, it's like two hours away. And in winter, it's much colder than Manhattan. It's got to be 10 degrees below zero.

KESTENBAUM: And still, the rent for a one-bedroom apartment - $2,100 a month. So that's one problem. The boom, it's brought all these people from all over the country to this little town. But you go from a town that used to have 13,000 people to 30,000 people. There just is not space. And the space that there is here, it comes at a real premium.

MARSTON: There's another problem - one that doesn't seem like a problem at first. I mean, it's a problem that pretty much any town would want to have. Here's Shawn Wenko at City Hall. He works in the town's economic development office.

SHAWN WENKO: We have 7/10 of 1 percent unemployment rate here.

KESTENBAUM: Wait, what's the unemployment rate?

WENKO: Seven-tenths of 1 percent.

KESTENBAUM: So that means that less than 1 in 100 people are unemployed.

WENKO: Right, correct. If you're not working in western North Dakota or Williston or Williams County, there's - you're unemployable.

KESTENBAUM: You'd think in a boomtown that anyone with a scrap of a good idea could make money hand over fist, but an unemployment rate this low causes problems. Here, I give you one of the most successful businesses on the face of the planet.

UNIDENTIFIED MAN #1: Bacon, egg and cheese McGriddle, number 6 with orange juice.

MARSTON: You guessed it - McDonald's. The new McDonald's in Williston, it's perfectly placed to make a killing. I mean, there are thousands of hungry oil workers dying for Big Macs and shakes. But for the first three months, McDonald's couldn't even open its doors. There was enough staff to run the drive-through but not the inside part.

KESTENBAUM: One of the managers, her name is Tamsen Allen. She told us this is one of the things about a boomtown. It can be very hard to find people to work because everyone's already working, or they want too much money.

TAMSEN ALLEN: We did lots of interviews - lots and lots of interviews.

KESTENBAUM: When - what's the starting salary here?

ALLEN: It was nine dollars, but we bumped it up to 11. So we've increased the wages.

KESTENBAUM: Did that help?

ALLEN: A little.

KESTENBAUM: How much is Walmart paying? Do you know?

ALLEN: I think 17 overnights - I believe.

KESTENBAUM: Could you guys pay 17?

ALLEN: Oh, no - not unless we made the Big Macs about that much money.

KESTENBAUM: Could you charge $17 for a Big Mac?

ALLEN: I don't think so - not realistically.

MARSTON: Yeah. Imagine walking into a McDonald's and seeing $17 for a hamburger. No one's going to pay that.

KESTENBAUM: Even Walmart paying $17 an hour is still having problems. Chelsey Melby grew up in town.

CHELSEY MELBY: Ninety-nine-point-nine percent of the time, you go out there to get your shopping done, and the shelves are empty. And all the stock is in the middle of the aisle stacked halfway to the ceiling because they don't have the help for people to put it away.

MARSTON: These are the problems with being a boomtown. And this is why it can be so hard to go from being a boomtown to a real town.

KESTENBAUM: In a real town, restaurants and stores wouldn't have any trouble hiring workers because there'd be a huge surplus of labor waiting for those jobs. Like, there would be teenagers. But there aren't many teenagers in town. What there are are men - lots of men working on oil rigs. They have not moved their families here. And that is the trick in getting Williston to go from a boomtown to a real town. You have to get the men drawn by the boom to move their families here, to make this place their home.

MARSTON: Right now, a lot of guys are living someplace that does not feel like home. This place, everyone calls it man camp.

KESTENBAUM: We stayed in a man camp.

MARSTON: Right. A man camp is basically a sprawling collection of trailers all linked together. The one that we stayed in houses a 1,000 guys. And what do you get? You get a tiny room with a bed and a sink. And basically, it feels like you're living in a submarine.

KESTENBAUM: Except when you get to the dining hall, which is huge. At breakfast one morning, we sat down with these three oil workers. We asked them the big question.

Would you consider moving here?

UNIDENTIFIED MAN #3: No.

UNIDENTIFIED MAN #4: No.

UNIDENTIFIED MAN #5: Probably not. No, I wouldn't do it. No.

KESTENBAUM: How come?

UNIDENTIFIED MAN #6: It's just too expensive to live here. When you have to pay $3,000 for an apartment.

KESTENBAUM: And, Josh, I tried to sell this guy on Williston. I said, hey, look. You know, there's lots of new construction. We saw this new apartment. That whole building, by the way, went up in just 90 days, and there are more buildings like it going up. We saw trees stuck in the ground outside of new houses, and piles of streetlamps ready to be installed. You know, it could be a place you'd want to live.

They're building a lot of apartments. What if the price came down?

UNIDENTIFIED MAN #3: If it came down, probably.

KESTENBAUM: Hey, we got one probably. But the other guys they still said no.

MARSTON: Basically, you need more than houses and streetlights. To turn a boomtown into a real town, you need all the stuff that makes a town feel like a town. We heard this from a lot of people - people like this guy.

JIM WETLIN: My name is Jim (ph), and I drive truck.

KESTENBAUM: What's your last name?

WETLIN: Wetlin (ph).

KESTENBAUM: Can I just say that's an awesome mustache.

WETLIN: Oh, well, thank you. I've been growing it for about 20 years now.

KESTENBAUM: Jim has this huge walrus mustache. And he has a perfectly nice home. It's just a thousand miles away in Washington State. He told us he works in Williston three weeks at a time - crazy long hours, three weeks on, one week off. And on his week off, he rushes home. Sometimes, he just drives there as soon as he can.

How long does that take?

WETLIN: Depending on the roads, 14 to 17, 18 hours.

KESTENBAUM: Would you think about moving here?

WETLIN: No, not going to bring my family up here - not right now.

MARSTON: Probably that's because right now Williston, it feels like a frontier town.

KESTENBAUM: What would need to change here?

WETLIN: Something to do. I'd say it's a great place to work. But family-activity-wise, what is there? Couple of movie houses and a bowling alley.

KESTENBAUM: What is there at home?

WETLIN: Skate parks and soccer fields and football fields and city parks.

KESTENBAUM: At this point, a woman who is standing nearby chimes in. She says, Williston has that.

WETLIN: No, you don't. You got a tulip field way up north somewhere.

UNIDENTIFIED WOMAN: We have a city park with the skate park in it right downtown - with a swimming pool. I don't live here either but...

WETLIN: You used to, and you left.

UNIDENTIFIED WOMAN: Right, and I...

WETLIN: Got that on tape?

UNIDENTIFIED WOMAN: And I won't live here - I mean, my residence is in Wyoming. That's home to me, not here.

KESTENBAUM: This is the problem Williston faces. People need to want to live here. And getting them to move here, it's a big chicken-and-egg problem.

MARSTON: People want places to shop and eat. But until people move here, there aren't enough employees to staff those places.

KESTENBAUM: People want there to be schools for their kids, but the city needs property taxes to build schools. And you don't get property taxes until families move here and buy the properties.

MARSTON: Basically, people don't want to move here until it feels like a real town. But it won't feel like a real town until people commit to moving here.

KESTENBAUM: A giant chicken-and-egg problem - you can't have the chicken without an egg, but you can't have an egg without a chicken. So the city of Williston has a plan. It is going to build a gigantic chicken - or it's an egg. I don't know which it is. Actually, what it is is a huge rec center.

WENKO: What I'm told it's one of the largest of its kind in the nation.

MARSTON: This is Shawn Wenko with the economic development office. Think of a rec center as a super gigantic gym.

WENKO: Workout facilities, golf simulators, batting cages, 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: Kind of an inner-tubing style of river.

KESTENBAUM: Indoors up here in North Dakota?

WENKO: Indoors, correct.

MARSTON: And the price tag for this rec center? Seventy-two million dollars. This is Williston's solution to the chicken-and-egg problem. Just build and keep building and build some more. And then people will want to stay and live here. The city has been doing so much building that it's had to borrow some money. And borrowing money means taking a gamble that it all works out.

KESTENBAUM: And in a sense, this gamble hinges on a question that this town has struggled with since it first struck oil. The question is how long will all this last? There have been booms and busts here before. Remember Rich Vestal, the guy with 68 houses? The reason he had almost gone out of business was that back in the early '80s, the price of oil plunged. And the oil companies left town. Jim, the truck driver you heard from with the walrus mustache, he is not sure how things are going to turn out this time.

WETLIN: Well, I guess there's probably two options. If the oil boom sticks around, and it keeps growing like it is, it's going to be a pretty thriving metropolis. Otherwise, it'll be a ghost town with a lot of empty warehouses. If the boom shuts off, and everything goes to heck in a handbasket, I hook up to my pickup, and I leave. So, you know, it's portable.

KESTENBAUM: The town is betting that there will not be a bust. And the math - the math is pretty compelling. The price of oil right now is about $90 a barrel. And the oil in the ground here, it costs a lot less to get out. Estimates are it costs around $50 a barrel to extract. So the price of oil would have to drop a lot - almost in half - for it to stop making sense to pull the oil out of the ground here.

MARSTON: There are 180 drilling rigs in the area. Every single day six new wells get finished. And if that lasts for 10 to 15 years, you end up with 30,000 to 50,000 wells. So even if people like Jim don't stay, someone has to be around to service and maintain them.

KESTENBAUM: And not all booms lead to busts. Sometimes places just grow, and they stabilize. Sometimes a little town out in the prairie gets to realize its dream and grow into a slightly larger town - one with a really nice gym.

MARSTON: And a really nice lazy river.

(SOUNDBITE OF SONG, "GHOST TOWN")

FIRST AID KIT: (Singing) Someday.

KESTENBAUM: As always, we'd love to know what you think. You can send us email - planetmoney@npr.org. We have some pictures of Williston - better than usual because, Josh, you talk to them. They'll be on the blog - npr.org/money.

MARSTON: And before we go, I just wanna give a shoutout to my friend Jesse Moss, the guy we mentioned making the documentary in Williston. Thanks, Jesse, for all your help. I'm Josh Marston.

KESTENBAUM: And I'm David Kestenbaum. Thanks for listening.

(SOUNDBITE OF SONG, "GHOST TOWN")

FIRST AID KIT: (Singing) If you've got visions of the past, let them follow you down for they'll come back to you someday. And I found myself attached to this railroad track. But I'll come back to you someday. Transcript provided by NPR, Copyright NPR.