North Dakota Is Bakken Business
Construction costs are escalating, too, says Ziegler. Overall costs [have] increased 12% a year since 2001 but rose 23% last year," he says. Ziegler blames the increase on a scarcity of supplies and materials, the cost of transporting goods into the area and competition for labor. With the oil industry paying truckers $90,000 a year, it isn't easy to get anyone to deliver asphalt for construction for less pay, Ziegler says.
Cramped Quarters
Construction companies that move in can find themselves with no place to house workers. Williston permitted 2,131 single- and multifamily units and 691 hotel units at the beginning of the year, but it's not enough to keep up with demand.
Some contractors, such as Burke Construction Group Inc., Las Vegas, and companies, such as Target Logistics Inc., Boston, are building "man camps," clusters of modular units linked to form barracks. Most camps house hundreds of people—some, thousands—and come complete with recreation rooms, internet cafes and 24-hour mess halls. A month's rent for a typical single room with three meals a day is $3,500—often paid for by employers.
For many, their vehicles double as bedrooms and kitchens for weeks while they find jobs. "Some of the guys stay in trailers right on the site," says Shane Anderson, an oil derrick driller with Precision Drilling, Calgary, Alberta, Canada. "It's hard to find a place to stay around here, but I'm lucky because I got one in town."
The camps add a housing elasticity for the transient boom; but "transient" is a word local officials are careful to remember.
"We have a committee researching data to figure out just how much of an expansion we need to build for," says Monte Meiers, Williston's director of public works and engineering. "We don't want to build for 60,000 and only have 40,000 long-term residents or visa versa," he says.
Roger Thomas didn't want his crew sleeping in their cars. As division manager for Burke Construction Group's remote sites, he realized there was no way to control the construction schedule without housing workers. Thomas built a crew camp to give his company a base, and he has been there for 18 months. Thomas advises contractors contemplating work in the region to secure housing for their workers and subcontractors before making the leap.
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Another challenge is arranging financing, adds Thomas. "Williston financiers aren't giving out-of-towners the time of day, and most financiers outside North Dakota say, 'Williston? Where's Williston?' " He is countering by making positive contributions to the Williston community. He is now on the Williston Board of Commerce and is a member of the Builder's Association.
Poaching is another problem contractors face. The abundance of work and high oil-sector wages tempt craft workers to jump. Deciding whether to work for energy or construction is a question every tradesperson faces, Thomas says. "The energy industry pays whatever it takes to get the job done," he admits.
