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Abstract
Communities in western North Dakota are struggling to manage the unprecedented growth in employment associated with the current oil boom. The city of Dickinson is
undergoing a comprehensive plan to develop policies, strategies, and solutions for providing
infrastructure, transportation, housing, and public services as a result of the new conditions
brought on by oil field development. This study was designed to provide input into the city’s
comprehensive planning effort.
Employment projections for the Dickinson trade area included future changes to
employment in existing industries, future direct employment in the petroleum sector, and
potential secondary employment associated with changes in direct employment in the petroleum
industry. To frame the context and scope of future oil field development, perceptions and
opinions on current and expected development in the Williston Basin were solicited from
industry leaders and government representatives with knowledge of the industry. Those opinions
and perceptions provided the basis for creating two development scenarios based on 32,000 wells
in the Bakken/Three Forks formations in North Dakota by 2036.
Near-term growth in employment in the Dickinson trade area was substantial in the slow
and rapid development scenarios. However, long-term employment dynamics differed. Those
differences were reflected in the level of temporary employment and changes in permanent
employment over the 25-year period. The slow development scenario produced a set of
employment dynamics much more conducive to an orderly and sustained expansion. By
contrast, the rapid development scenario indicated continued rapid growth in employment over
the next decade. Further into the rapid scenario timeline, assumptions on oil field development
produced a strong contraction in employment upon completion of well drilling which results in
an employment change reminiscent of boom-bust resource development. Neither scenario was
modeled as a prediction, but rather a potential possibility.
Two separate approaches were used to estimate future population for the city of
Dickinson. One approach used current and planned build-out rates for future housing
developments within the current city limits, occupancy rates in motels and other non-traditional
housing arrangements, crew camps, lodging at work sites, and existing traditional Census
population figures to produce an estimate of service population. Based on that approach, the city
will reach a physical maximum service population of approximately 35,000 upon completion of
all current and proposed projects (i.e., proposed projects as of early 2012). When all of the
planned developments are build-out additional growth beyond that level will be dependent on
how the city reacts to the demand for additional housing. Additional growth will require
additional annexations.
A second approach to estimating future population used projections of regional
employment in all industries to generate estimates of regional housing demand. Future housing
demand in the region was estimated separately for permanent and total (permanent and
temporary jobs) workforce. Permanent workforce produced housing needs associated with longvi
term employment and would produce population estimates consistent with the Census. Total
workforce (permanent and temporary workers) was used to produce estimates of future housing
demand that were used to estimate service populations.
Future housing demand was allocated among the region’s counties based on historic
distributions of housing within the region. The allocation process was largely driven by the need
to address mobility of the petroleum sector workforce. Petroleum sector workers may not
necessarily reside where they work or be employed where they reside. Therefore, a direct
correlation between place of employment and place of residence could not be used to allocate
regional housing demand.
Future housing demand in each county was divided into homes, twin homes, and
apartments (i.e., R1, R2, and R3 housing) and assigned occupancy rates by housing type by
county based on historical data. Information on the expected mix of housing in future housing
developments was used to adjust the future distribution of single family houses, twin homes, and
apartments within the trade area counties. The process produced county-level estimates of
permanent population and service population over the 25-year period.
Assuming all permanent housing needs are met within the region, an average of the slow
and rapid development scenarios revealed that the Dickinson trade area permanent population
could approach 57,000 in 25 years. If temporary employment is included, trade area service
population could peak near 64,000 people around 2020.
Two levels of future housing demand within the city in Dickinson were considered. First,
housing demand was modeled at a rate consistent with Dickinson’s historic share of regional
housing, approximately 50 percent. A second scenario assumed the city would supply 70 percent
of the regional housing supply. The second scenario was based on the premise that other cities
and communities in the region would not be able to meet future housing demand proportionate to
their historical levels.
Housing demand for a permanent workforce was projected to be 72 percent to 140
percent above the 2010 Census estimate of housing units in the city of Dickinson, depending
upon the share of regional housing units supplied by Dickinson. When housing demand included
housing for the temporary workforce, housing demand peaked at 95 to 173 percent of the 2010
Census estimate of housing units in Dickinson 10 to 12 years into the planning period.
Future permanent population in the city of Dickinson could approach 30,000 in 15 years
assuming 50 percent of regional housing demand. If that ratio were to change based on the
assumption that smaller communities in the trade area were either unwilling or unable to
maintain their historic housing supply and Dickinson now supplied 70 percent of the regional
housing demand, future permanent population was estimated to approach 40,000 in 15 years.
When temporary employment is included in the population estimates, the city of Dickinson could
see a service population between 34,000 to 47,000 in 10 years depending upon the share of
regional temporary housing demand supplied by the city.
Aside from detailed estimates of future employment, housing, and population, a number
of insights were gained regarding current and expected future activity in the Dickinson trade
area.
● Employment
• Employment in the petroleum sector will remain high, and there are strong indications
that increases in direct employment could occur in the near term.
• Near-term employment drivers are associated with drilling and fracing activity in the
Bakken/Three Forks formations.
• Longer-term employment drivers are associated with oil field service and will be a
direct function of the number of wells operating in the state.
•Wildcards in the long-term employment may include development of other shale
formations (e.g., Tyler formation).
•Long-term predictions of employment are difficult.
◦ The industry has substantial incentives to reduce current labor requirements.
◦ Future use of new technologies and techniques are likely to be a factor in
employment requirements.
◦ Macro-economic factors affecting oil field development rates and the future
desirability of the industry to pursue opportunities in shale oil formations in ND
are difficult to predict.
◦ Therefore, a host of factors make concise long-range estimates impossible. The
best antidote for long-term uncertainty is to shorten the time between assessments
and make the process of forecasting more iterative.
● Housing
• There is substantial demand for housing in the Dickinson trade area.
• Current build-out rates for water, sewer, and housing are not likely to result in
overbuilding of infrastructure within the city of Dickinson.
• Despite enormous demand for housing, it is not unlimited. The city must carefully plan
how it will respond to the demand as overbuilding can result in equally serious
ramifications.
◦ Too much housing is likely to result in high vacancy rates, and a depressed
housing market.
◦ Too little housing drives up values and rents and creates additional problems for
elderly and other fixed income residents.
• Communities’ response to the housing issue must include continual monitoring and
periodic re-assessment to avoid building to peak demand.
● Workforce Characteristics
• Workers in the petroleum sector are far more mobile than previously thought.
• A good understanding of workforce characteristics is lacking.
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• Planning efforts at both the local and state level would benefit from a better
understanding of demographic profiles, anticipated work schedules, and
likelihood/willingness of existing workforce to become North Dakota residents.
• Antidotal evidence (airline boardings, real estate purchases) suggests that workers are
seeking housing outside of the oil fields, and using work schedules that allow them to
work in ND but maintain their home residence elsewhere in the state or outside of ND.
• A mobile workforce responsive to housing availability has substantial implications for
level of secondary employment–implications for support businesses, services, and
commercial activity.
● Population
• Local communities must include estimates of service population when planning for
delivery of public services.
• The duration and intensity of service population will largely be reflective of the city’s
policy regarding housing supply and the future rates of development within the oil field.