Lance Scranton: Adapting in the face of change
August 1, 2012
Being guests in another state can be very educational.
While we see only a snapshot of what is going on with the oil boom in North Dakota, my extended family offers another perspective.
There is a huge amount of attention being paid to North Dakota as an oil-producing giant. While oil jobs pay well and generate tax revenue ($856 million state budget surplus to date), there are a few concerns.
There are approximately 200 oil wells currently producing in the western portion of North Dakota with more than 600 more in the planning stages.
This activity has driven up the cost of housing, food and even gas.
For example, what used to be a $2.50 jug of milk is now $4.99. Extrapolate this cost over the entire grocery bill and the cost increase is staggering.
Recommended Stories For You
The average home value has tripled, which means homeowners are paying more in property tax.
My niece rents an apartment in town and is concerned because her landlord has been approached to sell the complex so there are places for workers to live.
If the apartments are sold and her family is asked to move out, they will be at the mercy of the prevailing rental prices ($2,400 a month for a three-bedroom apartment) that are exorbitant compared to what she pays currently.
What concerns the locals is that real wages in their fields are not even close to the prevailing wages of the oil industry jobs. While industry jobs are important, the lesson is that keeping and attracting people to local jobs that support infrastructure should be a big concern for local and state officials.
I also spoke with a real estate investor from Denver who I met at a local Dickinson coffee shop. I asked him how things were in Dickinson and he smiled.
He answered that things are well for many people like him and that real estate in and around the area is making him a wealthy man.
I told him I was from Craig and he smiled again, saying there may be some things going on in our area similar to the experience in Dickinson.
He said the only thing Dickinson wasn't prepared for was the stress on the infrastructure of the city and that a little slower pace of development might have been a good idea.
The most interesting lesson for me, should we experience an economic boom due to our natural resources, is that we should carefully consider the effects on our local community and economy.
While much of what is happening in North Dakota is great, the law of unintended consequences applies.
I experienced the oil boom growing up in Edmonton, Alberta, and the biggest lesson I learned was that you have to be flexible and realize that when things change you have to adapt.