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Oil prices have been sinking for months. And while that's good news for most Americans, what happens to towns like Williston, N.D., that have built an entire economy around the oil industry?
This happened in my hometown when there was a downturn in the oil industry in the late '90's. At one point, my dad was the only person leasing an office in an entire building! The building management broke the lease and forced him to move. People were just leaving their house keys in the mailbox and walking away from their houses in the middle of the night. During that time, I ran into a former high school classmate who had earned his degree as a Geophysicist, but was bagging groceries at Safeway because he couldn't get a job. Possible rough times ahead for that industry again it seems.
I'm still hearing about crude oil and frack water haulers being needed in oilfield regions in the atypical production states.
But at the same time, I wouldn't be too surprised if we see some of the same bozos that jumped ship to an oilfield company head back over to milk hauling due to a work shortage.
Bad for those guys because they'll think it's short-money all over again.
Good for me because I'm tired of hearing the term "short-handed".
Plenty of cheese still needing to be processed and those cows don't stop.
Hopefully they've saved up enough over the last few years to prepare for this. They sure were making a killing.
Unfortunately most people do not put money away for a rainy day. They increase there lifestyle to take advantage of all the extra money they are making. I heard stories about guys going to strip clubs on the few days they had off a month and spend thousands on strippers. The gravy train is ending, I doubt more than 1 in 10 have money stashed away for hard times.
The only bright note is this is a temporary condition, when oil prices rise again, the North Dakota towns will be booming again, and they will have the infrastructure in place to accommodate it, no more people living in RV's, 100% booked hotels and and sky high rents for apartments. It's not a question of if, but when. Low prices will probably last two or three years, but they will go up again.
Last edited by TechGromit; 01-23-2015 at 11:50 AM..
Unfortunately most people do not put money away for a rainy day. They increase there lifestyle to take advantage of all the extra money they are making. I heard stories about guys going to strip clubs on the few days they had off a month and spend 5k on strippers. The gravy train is ending, I doubt more than 1 in 10 have money stashed away for hard times.
And there's the trucks. I bet the average oil worker in this area has a $50k+ truck.
Hopefully they've saved up enough over the last few years to prepare for this. They sure were making a killing.
You can bet that many of them will go home flat broke.
Reminds me of the 1970's when they built the Davis Bessie nuclear power plant and general labor for making $75,000 a year in 1975 dollars which was equivalent to $200,000 today.
It was wealth redistribution and for three years many of these laborers lived hand to mouth weekly check to weekly check. They lived well, all kinds of toys and other junk like Harley's and fun times at strip clubs.
For many this three years of unrealistic wages ruined their lives.
Want to ruin a McDonald's workers life? All you have to do is hire him at age 20 as a cook for $4,000 weekly for two years and then send him back to normal McDonald's wages at age 24.
For many this three years of unrealistic wages ruined their lives.
Want to ruin a McDonald's workers life? All you have to do is hire him at age 20 as a cook for $4,000 weekly for two years and then send him back to normal McDonald's wages at age 24.
He will be wrecked for life.
The exact same thing happens to people that win the lottery. 2/3's of people who win the lottery are bankrupt in 5 years or less. Most people are not equipped to handle a massive amount of money, there was even one guy who won the Powerball in 2002 that was already had a net worth of 17 million dollars that owned a construction company, even he evened up flat broke in a by 2007. You would think someone who was already a millionaire would know how to manage a large amount of money.
If any of you own a couple gazillion dollars, this is an excellent time to purchase an oil field.
This $2 a gallon gas is wonderful, but I doubt that it will last more than a couple of months. Six months, tops, and then up it goes, back to $4 a gallon.
The only bright note is this is a temporary condition, when oil prices rise again, the North Dakota towns will be booming again, and they will have the infrastructure in place to accommodate it, no more people living in RV's, 100% booked hotels and and sky high rents for apartments. It's not a question of if, but when. Low prices will probably last two or three years, but they will go up again.
It is absolutely not certain that it would be temporary. Saudi Arabia is going for the long run, the objective being the capacity to retain market shares and force out new actors, including, but not only, US shale oil.
The goal for them is to make sure the conventional oil becomes the normal production mean, and to retain all the market shares. When there will be consumption peak, the alternative oil such as the shale oil are going to kick in.
Basically, under this structure, the oil price will no more be above $100 / barrel. The final price after stabilization is still to be seen...
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