Port of Vancouver, other Clark County businesses, individuals seek to cash in on N.D. oil boom
By Eric Florip, August 18, 2014, The Columbian
Just off Highway 1804, a high grassy slope offers a sweeping view of the epicenter of North Dakota’s oil boom.
Williston, a once-small town that now proclaims itself “Boomtown, USA,” sprawls out in the valley below. The Missouri River wanders past rolling hills and wheat fields across a mostly treeless landscape dotted by oil wells. One of those wells pumps near the top of this overlook, its gas flare lapping flames against an endless sky.
Curtis Shuck calls this his reflection hill.
The Port of Vancouver senior sales director remembers standing here in the spring of 2013, knowing there was something here for the port, but unsure exactly what. Then, he said, he looked back toward the highway. Along a simple wire fence, a single boot rested upside down on each post.
“It was like a light came on,” Shuck said on the same hill recently. “You’ve got to have boots on the ground. You’ve got to be a part of the community.”
Less than a year later, in January, the Port of Vancouver opened a field office in Williston. Shuck is the port’s face here, spending about two weeks per month in the area. Vancouver’s is the first West Coast port with a regular physical presence in the region, Shuck said, part of an effort to become “North Dakota’s port.”
It’s a natural connection for a port that is a straight shot by rail to the Pacific Ocean’s marine highway and West Coast oil refineries. In Vancouver, Tesoro Corp. and Savage Companies want to build an oil transfer terminal capable of handling an average of 360,000 barrels of Bakken crude per day. The companies say the $150 million to $190 million project would bring 250 construction jobs and 120 permanent jobs. Shuck and the port hope more will flow from oil and other industries as a payoff for its large investment in its rail infrastructure.
But the port’s vision is at odds with that of some of its most important local partners. More than a year after the oil terminal plans first emerged, citizen opposition has remained high while business organizations have remained mostly on the sidelines. Not long after the port opened up shop in Williston, the Vancouver City Council passed a resolution formally opposing the Tesoro-Savage plan and any facility that increases the amount of Bakken crude moving through town.
What’s more, a developer selected by the city for a $1.3 billion transformation of Vancouver’s former industrial riverfront into a sparkling neighborhood of condominiums, offices and retail space argues that the oil terminal could kill his vision, and the city’s, for the redevelopment project.
Such skepticism stands in stark contrast to attitudes here in Williston, where Shuck roams around in a white Chevy Tahoe with the Port of Vancouver logo on its doors. The Bakken oil fields have transformed parts of a state with the nation’s lowest unemployment rate at 2.7 percent. The local unemployment rate in Williams County is just 1 percent. A huge tax windfall has produced enviable budget surpluses in North Dakota, and countless peripheral industries have cashed in on the oil-fueled bonanza.
The benefits to Vancouver and Southwest Washington are less clear. Clark County’s economy, after languishing for years, is now growing faster than the rest of the state. The 120 permanent jobs created by the proposed Tesoro-Savage terminal represent a relatively small dent in the local workforce. A 10-year lease approved by port commissioners would generate $45 million over 10 years, and the companies say the operation would also put more than $5 million in annual tax revenue into local and state coffers.
Yet with or without the Vancouver terminal, the far-reaching Bakken boom has already rippled across the Northwest. Washington is among the states that have sent the most workers to the oil fields in recent years, according to Job Service North Dakota. Some will bring their earnings back home; others won’t.
The Port of Vancouver, for its part, believes it can leverage its presence into more Clark County companies getting a piece of the Bakken pie from afar. Some already have.
“We know this market is way bigger than the Port of Vancouver,” Shuck said.
As for the Tesoro-Savage project, the port remains steadfast in pushing forward through the state review process that will decide its fate despite strong pushback at home. Port leaders have resisted calls to terminate a lease agreement tied to the project — a move they say could damage the port’s credibility.
“You start to go down a slippery slope when you start to take (certain) types of opportunities off the table,” Shuck said.
If Williston is “Boomtown, USA,” as a large sign in the city loudly announces, it certainly looks the part.
Rows of new apartment buildings are lined up next to rows of more apartments under construction. Many of the city’s hotels and homes are less than a few years old, an upgrade from the sardine-like “man camps” some oil workers still call home. And it’s nearly impossible to escape road work in and around town. Dusty streets and highways are often packed with pickups and tractor-trailers.
Williston is feverishly building new infrastructure to accommodate a population that has soared from about 15,000 in 2010 to more than 40,000 now. It still has a long way to go.
“The entire city is under construction,” said Shawn Wenko, Williston’s interim director of economic development.
And people keep coming. In the city’s airport, a workforce recruitment poster invites visitors to “Find the Good Life in North Dakota,” touting 25,000 open jobs across the state.
Plenty of those who come looking for opportunity and a paycheck are from the Northwest. Washington, Oregon, Idaho, California and Michigan are among the states with the most people arriving in North Dakota in recent years, said Cindy Sanford, an office manager for the state job service in Williston. The biggest driver is pay, she said.
“The majority of people coming are just looking for a new start,” Sanford said. “They just want to work. They’re just here to make something better for themselves.”
Chris Piche is on something of a five-year plan. He moved to North Dakota from Battle Ground in January 2012, he said, without much money in his pocket. He started driving a truck, then saved up enough to buy his own rig and start his own company hauling oil and gravel. Mathews Transport now employs three people, with two more on the way. Truck drivers here can earn up to $120,000 per year.
Piche followed the example of two former colleagues at a Battle Ground-based contractor. The two started another trucking company in Watford City, and also managed property. Vancouver resident Dave Borys said he and a business partner invested about $110,000 when they arrived in North Dakota in 2011, then sold and left with $2.2 million three years later.
“It was lucrative,” Borys said, “but it was hard work.”
Borys returned to Vancouver earlier this year. He now runs a consulting business in Kelso.
Knowing he won’t be here forever is what allows Piche to endure the grind of 12- to 16-hour days, six days per week. Based near Watford City, he’s constantly on the road carrying loads around the area. An outdoor yard means working on his trucks in the elements during North Dakota’s brutally harsh winters. Piche said he’s learned a lot about himself and his work ethic, and doesn’t regret his decision to move here. But he doesn’t deny the daily toil is exhausting and, at times, miserable.
“One year out here equals two everywhere else,” Piche said.
Piche said he plans to put in a couple more years and then decide his next step. He may sell Mathews Transport and move back to Washington, which he still calls home. He may get out of trucking and start a consulting business, but stay in North Dakota.
Either way, Piche appears on track to land on his feet. He counts himself as fortunate.
“It’s very common,” Piche said of his and others’ success. “It’s also very common to leave with nothing.”
Betting on the Bakken
When the Port of Vancouver’s Shuck first came to Williston in 2012, it was to explore opportunities in the booming energy industry, he said. The SUV the Port of Vancouver now keeps in town is endearingly referred to as the “Bakken mobile.”
But Shuck insists the port’s play here is about more than just oil.
North Dakota already sends its grain, soybean, corn and other agricultural products to the West Coast and other markets. Giving Vancouver a fixed presence in the region may help Clark County find ways to send commodities back, Shuck said.
“It doesn’t mean we’re looking for Washington residents to move to North Dakota,” Shuck said. “It means that maybe there are ways for Washington businesses to help pre-fabricate materials to come out here, or to machine materials to come out here.”
More than a dozen Vancouver-based companies joined the port and the Columbia River Economic Development Council on a “trade mission” to Williston in September. The visit coincided with the Williston Economic Development Summit, which the port plans to participate in again this year.
Vancouver-based manufacturer Alliance Industrial Group and consultant Maul Foster & Alongi are among the businesses that made the trip to the Bakken last year. Both have expressed interest in developing a further presence in the area. In Oregon, Lake Oswego-based Greenbrier Companies has seen a big surge in its rail car and barge manufacturing operations since Bakken oil production took off.
The Port of Vancouver has embraced the Bakken boom and oil transport with open arms, and three proposed projects in Grays Harbor could bring more oil through Vancouver. But the port’s closest neighbor made a deliberate decision not to get into the Bakken oil rush. After numerous inquiries, the Port of Portland released a lengthy statement in March outlining its reasons for staying out of the crude market, at least for now.
“The Port is interested in being part of an American energy renaissance brought on by this remarkable domestic oil transformation,” the statement read. “However, we do not believe that we have sufficient answers to the important questions regarding environmental and physical safety to proceed with any type of development at this time.”
That remains the Port of Portland’s stance today, said spokeswoman Martha Richmond.
The Tesoro-Savage plan and resulting fallout has damaged the Port of Vancouver’s reputation in some circles. Environmental groups and other opponents view the terminal and oil trains as a threat to the environment and public safety. A series of high-profile derailments and explosions since last year have only emboldened those arguments.
The swift backlash seemed to catch the port off guard. It has ignored calls from opponents to look for legal ways to cancel its lease with Tesoro-Savage.
That leaves the decision in the state’s hands. The project is being reviewed by the Energy Facility Site Evaluation Council and will ultimately go to Gov. Jay Inslee for a decision, one that could end up on appeal before the state Supreme Court.
It’s possible that the Tesoro-Savage plan could be rejected or scaled back. The companies, like the port, have shied away from speculating on the outcome and said they’re committed to the EFSEC process.
Still, Shuck said the port is in North Dakota “for the long haul.” There’s opportunity here for the Northwest, he said, even if the region hasn’t fully realized it yet.
“Instead of everybody out there fighting over the same pie, and the slice size, we want new pie,” Shuck said. “And so that’s what we’re out here doing, is developing new pie.”