Oil boom reverberates in Clark County

Crude from bustling North Dakota wells could flow through here if a proposed oil terminal is built at the Port of Vancouver

By Eric Florip, Columbian transportation & environment reporter

Published:

 
photo More than 180 active drilling rigs routinely pull more than 800,000 barrels of oil out of the ground daily in North Dakota, where thousands have moved to pursue work in the oil fields.

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photoA proposed terminal at the Port of Vancouver would handle oil drawn from the Bakken formation of North Dakota, where an oil boom has dramatically altered the landscape in the last three years. Former Clark County resident Chris Piche is among those who moved to the region to pursue opportunity.

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photoClick to enlarge

Chris Piche arrived with goals and a formidable work ethic.

But moving from Clark County to the job-rich oil fields of North Dakota in 2011 was still a leap of faith.

"I didn't know how it was going to turn out when we left," Piche said. "I just packed up my pickup and took off, and we've been going ever since."

The move paid off. By 2012, Piche was running his own trucking business hauling oil and gravel. Mathews Transport Inc., based near Watford City, N.D., now has three employees, he said. Piche himself logs upwards of 70 hours during a six-day work week.

"It's a different kind of stress, but it's a good kind of stress," said Piche, who used to work for Battle Ground-based contractor 3 Kings Environmental. "It's my own."

Stories like Piche's are common among the thousands of people who have migrated to North Dakota during the past three years seeking opportunity and a paycheck. An oil boom has generated what local officials say is unprecedented growth in some areas — and unprecedented strain on the state agencies charged with keeping watch over the industry there.

The trend shows no signs of slowing. A seemingly insatiable thirst could grow larger still if new projections of recoverable oil in the region prove true. And the resulting ripple effect may soon find its way to Clark County.

It's here that Tesoro Corp. and Savage Companies want to build an oil terminal at the Port of Vancouver, capable of handling as much as 380,000 barrels of crude per day. The facility would handle oil transported by rail from North Dakota, en route to U.S. refineries.

The idea has drawn strong opposition from environmental advocates and others calling for a shift away from fossil fuels. If built, the Vancouver terminal could open a new vein for an oil boom already producing at a break-neck pace 1,000 miles away.

"A lot of the markets are not connected to North Dakota by pipeline," said Lynn Helms, director of North Dakota's Department of Mineral Resources. "Things like this rail terminal will allow us to feed the refineries that use light sweet crude oil with domestic crude oil instead of importing it from across the ocean."

'Bigger than anything'

There's no doubt the numbers are eye-catching.

More than 180 active drilling rigs routinely pull 800,000 barrels of oil out of the ground in a single day in North Dakota. Some 39,000 jobs are directly tied to the oil fields. Tax revenues feed a state budget surplus recently reported at $1.6 billion.

And North Dakota's unemployment rate sits at just 3.0 percent — the lowest in the country.

The epicenter of activity is the Bakken and Three Forks formations, a vast area covering roughly the western half of North Dakota, plus parts of South Dakota, Montana and Canada.

Oil was discovered in the area as early as the 1950s. Attempts at production found varying levels of success, and many failures. It wasn't until the last decade that the development of new technologies, and extraction methods known as horizontal drilling and hydraulic fracturing, allowed production to take off.

"It's bigger than anything we've ever seen," Helms said.

And it likely won't be tapped out any time soon. An analysis by the U.S. Geological Survey earlier this year found that the Bakken and Three Forks formations could hold as much as 7.4 billion barrels of recoverable oil. That's more than twice what was estimated just a few years ago.

Of course, drilling oil is a messy process. It produces waste materials that include excess rock and oil-laden "drilling mud." North Dakota's recent boom has left regulatory agencies scrambling to keep up.

Drilling operations once disposed of that waste by simply putting it into open pits. But after a recent rule change, workers are now only allowed to dump drill cuttings -- the excess rock -- into those pits, which are now buried, Helms said. Liquid waste now goes to treatment plants to be recycled, he said. Some material still ends up in landfills.

Before the Bakken boom, North Dakota had three such waste treatment facilities, Helms said. Now there are about 80.

The towns struggling to keep up with an influx of new workers have felt growing pains of their own. Housing is scarce. Local roads and highways are often jammed. Many residents appear to live in improvised RV colonies.

Gene Veeder has lived most of his life in McKenzie County, which has experienced some of the most dramatic growth in North Dakota recently. He's now executive director of the McKenzie County Job Development Authority in Watford City.

A tsunami of changes and new construction has caused some friction, as you'd expect at any place, he said. Some new arrivals came expecting immediate work, only to stumble due to job requirements or other hurdles.

"There's a few stranded people here, as well," Veeder said. "It's not just, 'Walk in the door and you have a job.'"

A town of about 1,600 just a few years ago, Watford City has seen its population explode by thousands, he said. But in the years before oil pumped those numbers up, Watford saw its share of down times, too, he said.

"People didn't like that, either," Veeder said. "You're either booming or declining, so you try to find some equilibrium."

Implications near, far

Even in two years, Piche said, he's noticed a lot of change since moving to North Dakota.

Piche said he was struck by a "cowboy kind of way" when he first arrived. Environmental regulations aren't as stringent as in Washington and other places, he said. But many rules have changed, and dozens more are under review, according to Helms.

"They're getting better at it, and they need to get better at it," Piche said. "It's just a work in progress."

Piche is aware of the growing opposition to proposed oil and coal terminals in his former home state. Hundreds of protesters turned out for a demonstration against fossil fuels in Vancouver last summer. On the oil terminal, opponents cite the possibility of spills, concerns about the safety of hauling oil by rail and compounding the effects of climate change.

Piche said he understands people are worried. But there are economic benefits, and the idea of rejecting oil in the short term simply isn't practical, he said.

"Green technology and green energy is great, but that's not what we have right now," Piche said. "We have gasoline, and we have diesel. Everybody uses it."

For Clark County, the proposed Vancouver oil terminal would mean 250 temporary construction jobs and 120 permanent jobs, said Kelly Flint, senior vice president and general counsel for Savage Companies.

Savage, a supply-chain management company, already operates a loading facility in Trenton, N.D. The Vancouver terminal could link to that operation, Flint said, though it's far from the only facility that would be sending oil west to Washington.

The Vancouver terminal is currently in the hands of the state Energy Facility Site Evaluation Council, which will ultimately make a recommendation to Gov. Jay Inslee. The review is expected to take a year or more.

Critics have questioned the prolonged benefit of a terminal that would make a relatively small dent in Clark County's job market. But the Tesoro-Savage plan isn't designed to simply take advantage of a quick boom, Flint said.

"This facility is really designed to be a part of that mid- to long-term supply chain," Flint said. We don't view it as a flash in the pan, short-term kind of facility."

For Piche, a move to the other end of the supply line has meant a better quality of life, he said. He's among the many who came to find oil-related jobs typically paying at least $60,000 annually, Veeder said -- often more.

The oil fields, Piche said, don't sleep.