Oil Patch economy settling into 'new normal'

WILLISTON, N.D. - Drilling is down and hotel vacancies are up, but participants at a conference Wednesday said there are still reasons to be optimistic about Williston's economy.

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WILLISTON, N.D. - Drilling is down and hotel vacancies are up, but participants at a conference Wednesday said there are still reasons to be optimistic about Williston's economy.

Peter Elzi, a consultant whose firm has done more than 70 market studies on Williston, said low oil prices will make 2015 and 2016 challenging years for the city. But the area has a lot of other economic activity, he said, such as a new airport in the works and construction of new schools and government buildings, along with pipeline and gas plant expansions.

"There's still people coming here and there's still activity," said Elzi, a principal with THK Associates in Denver. "People forget the most valuable oil that an oil company owns is still in the ground. It's a bank for them. It's there when prices recover."

Shawn Wenko, executive director for Williston Economic Development, which organized the conference, said 2015 has been a good year so far for development, but it's at a pace that's a "new normal."

"Everybody got used to what happened between 2010 and 2015, and that was a tremendous amount of growth, numbers that were off the charts," Wenko said. "And that's a trajectory that's not sustainable."


One area that expanded rapidly in Williston was the addition of new hotels, with 16 hotels that opened in the city since 2010, said Amy Krueger, executive director of the Williston Convention Visitor's Bureau.

While hotel rooms were difficult to find in Williston a few years ago, hotels have been averaging about 55 percent full in 2015, Krueger said.

The national average for hotel occupancy is about 70 percent, said Elzi, who said he paid $286 to stay at Williston's Hampton Inn this week.

Hotel prices in Williston have started to come down, to an average daily rate of $122, but are still about $20 to $30 higher on average than in Minot and Dickinson, Krueger said.

Job-seekers continue to walk into the Williston office of Job Service North Dakota, but not at the pace they did in 2012 and 2013, said director Cindy Sanford.

The Williston area now has 1.5 jobs for every person, compared with six to seven jobs available for each person in 2011 and 2012, Sanford said.

Companies are now less likely to provide employee housing or pay for workers to travel home, Sanford said. Employers have dramatically cut back on overtime, which is the biggest reason workers have left North Dakota, Sanford said.

"We have had people walk in and go 'Can I file for unemployment because I'm only working 40 hours a week?'" she said.


But Job Service has started to see some of those workers come back, in part due to apartment rents that have dropped, Sanford said.

Williams County had 38,924 workers in March, a drop of about 5,000 jobs since November, according to Job Service statistics.

Even with job layoffs that have occurred, the Williston area had 1,100 job openings as of this week, including 190 jobs in the oil industry, Sanford said.

As oil prices recover, Elzi said it's going to be difficult to attract workers back to Williston now that the economies in other areas of the country have improved.

"It's a harder recruit to say, 'Would you like to freeze to death in February in the Bakken?' when you're competing with some other parts of the country," Elzi said. "So filling some of the jobs is going to be a little bit of a challenge for folks."

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