How The Boom-Bust Oil Cycle Is Playing Out In North Dakota

The shale oil boom attracted thousands of oil workers to North Dakota, sending the population of some small towns soaring. In response, communities built up infrastructure projects — new wastewater facilities, schools, etc. But now they're facing hundreds of millions of dollars of debt that will take decades to pay off, not to mention continued uncertainty over whether they've built too much as they watch the boom-bust cycle of the oil patch.

KELLY MCEVERS, HOST:

A lot of people have gone to North Dakota in recent years, drawn by a boom in shale fracking. Oil remains the state's biggest industry. Those small towns there are pretty familiar with boom and bust cycles. One of them has tried particularly hard to keep up with the latest boom. As Prairie Public Broadcasting's Amy Sisk reports, the town has taken on enormous debt in the process.

AMY SISK, BYLINE: Officials in Dickinson, N.D., are really proud of their town's rankings. Livability.com once called Dickinson the best small town in the country.

SCOTT DECKER: We get a lot of comments about, wow, what a great community. Wow, this place is so clean.

SISK: As Mayor, Scott Decker has watched his city's population jumped 40 percent in just the past decade as people flooded here for oil patch jobs.

DECKER: It did cost the city money. We did take on debt with the expanded fire services, our expanded police department. We've expanded our park and recs. We've added new schools.

SISK: All that said, this town of 23,000 is deep into debt - nearly $100 million into debt. Daniel Raimi has researched oil patch debt across the country. He says that North Dakota communities feel the pinch more intensely because of their location.

DANIEL RAIMI: Because there are just a few cities in the area to accommodate all of these new workers, the cities of North Dakota have had to expand at a rate that we really hadn't seen anywhere else in the United States.

SISK: And the rising debt load couldn't come at a worse time. The price of oil tanked the past couple years and is now only slowly ticking back up. North Dakota taxes oil production and funnels some of that money to oil patch towns like Dickinson. But with the slowdown in the oil fields, there's less money to go around. State Senator Rich Wardner represents the Dickinson area and says it's critical the city gets funding so it can maintain its services and its reputation as a good place to live.

RICH WARDNER: We will have the workforce then that'll want to come and live here and help develop and produce that oil.

SISK: He recently gathered a group of lawmakers in Dickinson to try to show them why the money should keep flowing to oil patch towns like this one. I joined them onboard a bus for a tour of town. City Administrator Shawn Kessel is our guide.

SHAWN KESSEL: All of the buildings that you see on the right side were not here five years ago.

SISK: There's so many apartment complexes that I can't finish counting them before we drive past. Further ahead, we see a new water tower and the city's new middle school. Dickinson's leaders are counting on that stream of state funding to help pay for these new facilities. They want to avoid repeating mistakes during the 1980s oil rush when the city funded expanded public services by raising taxes. Then came the bust, and Kessel says residents couldn't afford the extra tax, leading to a mass exodus.

KESSEL: So it hamstrung the community for over 20 years as they struggled to pay that debt off. People recall those incidences, and it shapes the way that you make future decisions because your community remembers what happened the last time.

SISK: That memory aside, the debt has piled up, and many small towns here hope they stay on the boom side of the cycle long enough to pay it off. For NPR News, I'm Amy Sisk.

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MCEVERS: That story comes to us from Inside Energy, a public media collaboration focused on America's energy issues.

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