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AS I SEE IT

Posted 1/23/13 (Wed)

By Neal A. Shipman
Farmer Editor

For those people who are trying to get their hands around the scope of the Bakken Shale play in McKenzie County as they try to figure out just how huge this oil and natural gas reserve is and how it could shape the county’s future, there always seems to be more questions than answers.
Business owners and developers want to know just how long the development and how big the play in the Bakken is going to be, and how long it will last, so they can plan their investments accordingly.
City and county officials desperately need to know how many people are going to be moving into the area. They need to not only know how many people are going to be working here, but more importantly how many of those workers are going to be calling Watford City, Arnegard, Alexander and McKenzie County their new home. They need this information so that they can logically (if that word can be used amid the area’s rapid population growth) plan for new streets, sewer and water improvements.
And school and hospital administrators need to know that same information so they know how large their expansion plans need to be to meet not only today’s population, but the population that we may or may not have in the next 10 to 30 years.
Everybody has questions.
And until recently no one seemed to have very many answers other than the common sentiment that there is a whole lot of oil lying under McKenzie County yet to be tapped into.
But last week, a new study was released with data from the North Dakota Department of Minerals on the potential of what we can see as far as drilling activity in McKenzie County, as well as what those drilling numbers mean in the way of jobs in the future and how this new development could impact the county’s future population.
The results from that study are truly mind-boggling. And while some may doubt the numbers, no one should now be able to doubt the fact that the Bakken Formation is going to drive this county’s economic engine well into the future.
While the Farmer is carrying a front page story this week on the information that was part of the study, here is a recap of what the study indicates McKenzie County can expect to see.
Rig and Well Activity: There will continue to be intense drilling in McKenzie County with 60 rigs running through 2016. And then that number will slowly drop off as the county is completely drilled out by 2025. The number of wells in McKenzie County alone will peak at 8,636 in 2025, and then hold at that level through 2050. (Note: There are currently 8,100 producing wells in all of North Dakota.)
Oil Industry Jobs: Between now and 2025, direct oilfield jobs will vary from 12,000 to 14,000 jobs in McKenzie County, After that time and once the county is drilled out, the number of direct oilfield jobs will taper off to 9,000, but remain steady at that level until 2050.
Population: The permanent population of the county will grow from 8,760 in 2012 to 20,717 by 2036.
Housing: The need for permanent housing in McKenzie County will grow from 3,672 units in 2012 to 8,956 units by 2036.
Are the numbers believable? To state and industry experts, the oil rig, well and oilfield job numbers are. These numbers reflect the drilling intentions of the companies drilling in McKenzie County and the number of workers that it is going to take.
But most county and city officials question the validity of the population and housing numbers since the county’s permanent population is already probably in excess of 20,000 people. And that permanent population number is definitely going to have a huge implication on the number of permanent housing units that are needed.
Did this study answer any of the questions that people have? No doubt it did. And in the process, it also created even more specific questions that future studies will have to answer.
But the bottom line is this, and it is the same one that came at the conclusion of the study, “This boom is not like the1980s spike, but a protracted increase in employment and population that will change the region for decades.”