January 30, 2013

SCOOP development could mimic what was seen with Bakken

Multiple industries expected to see massive increases in development

James Bright, Managing Editor,
The Express-Star

GRADY COUNTY — The South Central Oklahoma Oil Province is not unique. There are shale deposits across the nation, which up until a decade ago held billions of barrels of petroleum and natural gas that were unobtainable.

Energy companies across the world are lining up in North Dakota, Pennsylvania, Texas and many other states to lease and purchase mineral rights from governmental bodies and private citizens alike in addition to what is happening here. All plan to harvest this newly available energy.

Grady County is certainly not alone in this new era of energy excavation and that is something to be thankful for.

Ward Heidbreder, city coordinator for Stanley North Dakota experienced the same sort of excitement and development six years ago as Grady County is now.

"The workforce with hydraulic fracturing is immense," he said. "We saw a huge change in traffic and the amount of work force necessary for hydraulic fracturing."

Excavating the Bakken oil shelf, - a shale deposit similar to the SCOOP - caused a huge boom in most of central and  southwestern North Dakota.

This area also deals with a lack of available water, similar to Grady County.

"Water is always in huge demand for drilling," he said. "We have quite a few irrigation wells that were re-purposed and purchased by energy companies to run water to different rig sites."

Heidbreder said Grady County could see the same sort of increase in farm land purchase for water resources too.

The town's population boomed as well, according to Heidbreder.

"We've actually seen our population triple in five years," he said. "Our existing infrastructure had to grow to accommodate."

Groceries and gasoline were hard to find for awhile said Heidbreder, but he said the economic benefits far outweighed any of the problems caused by the influx.

"Our economy has been well above the national average for the last three years," he said. "In a neighboring community, they have started flying staff in from Wisconsin as a rotational work force for a hardware store."

The excavation of the Bakken will lead to anywhere between 15 and 30 years of sustained growth Heidbreder said.

"After that time period we will go into permanent production," he said. "Wells that were drilled will need maintenance work. The big push in this area now, will be to become more efficient in drilling practices."

The sustained growth has a lot to do with the energy industry's ability to stay current with the economy Heidbreder noted. He said wages in the oil industry have gone up to combat the increase in housing costs.

"The new workforce drives the cost of homes higher," he said.

The substantial increase in energy wages caused a drop in enrollment at local colleges, Heidbreder said.

"Why spend $80,000 on tuition when you can make that the first nine months out in the field," he said.

The salary increases have caused some negative impacts in Stanley too.

"We have also seen a large increase in alcohol related offenses," he said. "I attribute that to the workforce being young males with little or no entertainment options that are making six-figure salaries."

This may not be as big an issue for Grady County though, according to Heidbreder, since Stanley does not have communities like Oklahoma City, Norman  or even Chickasha close by.

Increases in local retail and dining options far outweigh the negatives, said Heidbreder.

New energy offices, trucking companies and other oil field businesses have opened all over Stanley in the last six years, as well as several new banks.

"Most of the banks here were hitting their deposit limits that were insured by the FDIC," he said. "A lot of banks went up very quickly to combat that problem."

Grady County is still a little ways away from seeing the sort of massive changes Stanley has experienced, but Heidbreder said the county's youth will let everyone know when the area's identity and livelihood has transformed.

"Kids are usually the least acceptable to a change in demographics," he said. "My kids were the first to point out that we weren't quite the same town we started out as."

Regardless, the change is coming, and as companies continue to lease and buy mineral rights all over Grady County, it is likely that this area will mimic what Heidbreder and North Dakotans have seen.

"It's up to local original population to make it work," he said. "The key is to just embrace the growth."