The Road to Hell Just Got MUCH Shorter

Gas prices are plummeting and many people are now looking at bigger SUVs and sedans at the car lots again.

The US is now the #1 producer of oil in the World passing Saudi Arabia and Russia. They have been #1 in Natural Gas production since 2010 despite reports that a Billion dollars of NG is flared off EVERY DAY on the Bakken Reserve.

But there is a conundrum. If oil prices drop too much, oil recovery could become too expensive and that would slow the roll in North Dakota which recently surpassed a million barrels of oil a day.  To keep that in perspective. In 2008, the most productive fields were producing barely half of that. With new fracking techniques, The Bakken becomes the 4th US field to surpass the million barrel mark.  But rejuvenating old fields and tripling their production rates takes a lot of money AND resources. Money is not a roadblock. The oil companies have plenty of that. The resources, namely water, well that is a different story.

North Dakota has now become the most expensive place to live due to the Oil boom there. Some places boast rent levels more than double the poshest Manhattan address.  The area's ability to support the huge influx of workers has been strained beyond the breaking point.  "Experts" say the boom could last as long as 5 years while others predict 25 years. So much for "expertise."

A couple I used to work with live in Rochester, WA a town of roughly 2,000 people just south of Olympia.  3 years ago, Kevin got fed up with the low pay at his job and signed up with a temp agency that was promising him an annual salary of more than 75,000 a year.  It did require travel and he eventually ended up working for an Drilling company near Dickinson, ND. He got a job as a truck driver hauling water from one drilling site to another which in itself sounded pretty easy except for the fact that the volume of water required was enormous and the area is generally pretty dry.  What water that was there was either already taken or not for sale.

Although he was paid based loosely on an hourly wage (his paycheck was so confusing even he did not know what it was) his potential to earn bonuses easily tripled his take home pay. But bonuses were awarded on how well he was able to meet his schedule of deliveries.  Each week it seemed, he had to drive farther and farther to new sources of water.  During a trip to a farm in Montana he had a rare chance to talk with the property owner (most were VERY hostile to him and kept their distance)  who said that the payment he received for selling water was enough to erase 25 years of debt, pay off his mortgage, buy a new truck and car for the wife and send them to Hawaii for their first vacation in 15 years. But the farmer was now expressing regret. He simply had no idea how much water they would take since he only allowed access to the property with no mention of volumes.

Within a week, they came in, built temporary roads and drilled a dozen wells onto his property. Each filling a large tank servicing 4-10 water trucks daily.  Kevin did not find out exactly what the drilling company paid for the water but estimated there was probably at least 3-4 million dollars worth of equipment there.

Three months later, Kevin came home with cash, a LOT of it.  Towards the end, he was working 80 hours a week because the bonuses just got crazier and crazier. The other reason was he could not find a permanent place to live.  As it was, he was staying at a hotel in Montana over 50 miles from the truck yard renting a room by the hour. Depending on where it was or which room, it was costing him $100 a day.  the company he was working for was offering 12 week contracts but would not allow him to work consecutive contracts. He was required to take a break between them but there were new contracts offered every week. Committing to a contract in advance was a $200 bonus, so he had 3 weeks before he had to be back.

Kevin talked Sherry, his wife into quitting and going with him. They went out and bought an RV and a brand new truck. Then they set out leaving their 3 kids with the grandparents promising they would be back in 3 months for good.

Fast forward to Spring of 2013. I was working when I ran into Sherry shopping. (not their real names although I doubt they care) She said they were still doing the oil thing although they do take 2 months off during the worst of Winter.  Kevin has changed jobs a few times because he was getting ripped off on his paychecks or so he thought.  She had gone there, got a job in a diner eventually moving up to manager, bookkeeper, supply runner.  She did that for a year then had to quit because of issues with her kids. The grandparents were getting older and managing the kids in their small mobile home got to be too much.

They now had a big house they bought that included a guest house where the grandparents live on 2 acres in Rochester.  Kevin was now delivering supplies and pipe and general what not to drilling sites, some as much as 200 miles away.  They still had their RV and was paying $1800 a month for lot rent in a converted farmer's field. There was no power or water hookups. A water truck came twice a week to fill the portable showers (it cost extra for that) and the RV was powered by the onboard generator which meant the "park" was always noisy with the sound of idling engines droning on all night.  

Because the water truck rarely provided enough water for the site's showers, Once a week, they drove up to 100 miles to dump the waste tank and to fill up every container they could get their hands on with water.  Finding a place to dump their "brown" water was a challenge and expensive costing as much as $100. Illegal dumping was commonplace as was illegal camping.  She only went out for a few days to visit every few weeks or so and bring fresh bedding, clothes food and etc.

Last year, Kevin made over $100,000 and they figure to have the house paid off by the end of the year.  Kevin wanted to start applying for jobs in the Olympia area soon. They figured they would have the house paid off sometime early in 2014.

I guess the most shocking part of seeing Sherry is that she looked like she had aged 10 years. I am not sure how old she was but guessing she had to be in her early to mid 20's when we first started working together in 2006.  I jokingly said she should have bought a house in ND but she gave me a look that definitely said that was not an option. She then hinted another reason she was no longer working there was that is was starting to get scary there. She had seen way too many bad things go on in the diner.  Fights over food, showers, etc.  Even while staying there, she might go 2-3 days without seeing Kevin because of his working hours and it was just too much time alone dealing with customers that were getting meaner and meaner.

I got the impression in North Dakota's case, money is not the answer to everything.

P.S.
I was hoping to get an update from them but I really don't know where they live. What the heck? I saw them every day at work for 6 years... Hope to have an update about their story some day.