In a recent column, I wrote that Minot had become North Dakota's growth city. I would like to expand on that with a broader discussion about what I think is happening across the state.
The changes are so drastic that I think it is the west that is now defining -- and will into the foreseeable future define -- our state.
One example of this trend is the fact that both Ed Schafer and then John Hoeven, two urban westerners, were elected governor. Their political influence grew as energy's importance to North Dakota grew.
High oil prices, the new technology that enables drilling in the Bakken oil formation and the problems in the Middle East have clinched western North Dakota's predominance in this state.
Minot is the growth city when we talk about the largest cities, but growth also is occurring in most of the oil patch towns. For example, in taxable sales and purchases report for the third quarter of 2009, the sales and purchases in Crosby, N.D., increased by nearly 43 percent, and those in Stanley, N.D., by nearly 19 percent.
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In that time, oil prices crashed from their high of the previous year, and some of the cities were starting to feel the results of the price crash. For example, Watford City, N.D., sales and purchases were up less than 10 percent and Dickinson's declined by nearly 2 percent.
The shocker was Williston, N.D., where taxable sales and purchases declined by more than 28 percent from the previous year.
Those changes took place to some degree on the particular oil field activities near those cities. Williston's oil economy has been directly related to drilling activity, and the rapid decline in the price of oil quickly and directly cut down on the amount of drilling taking place.
In the 1970s boom time, Williston got into serious economic problems when the city created new areas for expanded housing development that never happened. That mistake was so serious that it took state assistance to keep the city from going bankrupt.
Williston wasn't going to let that mistake happen again. Some criticized the city for this attitude, but today -- as many oil jobs have left the city -- it looks like good management on the part of the city officials.
Minot, meanwhile, made a specific attempt to capture the broader oil businesses. For example, Minot is home to a firm that builds the storage tanks that hold not only the oil pumped from the well, but also the saltwater that must be saved and disposed of under strict environmental regulations.
This business not only makes these tanks for the North Dakota and Montana fields, but also for the Saskatchewan oil fields. That's what economists call multiplier spending: It creates some stability in ongoing economic activity.
As our nation recovers from its economic problems (and there are signs that is happening), North Dakota should have a bright future over the next half century at least -- and maybe longer. I say this because in my view, the Bakken developments are real, and they are big.
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In fact, it is possible -- and this is a word I have never used before in discussing any economics, particularly North Dakota economics -- that this is huge. This could be bigger than anything North Dakota ever has experienced.
Don't misunderstand: Agriculture will continue to be important, and the Red River Valley will continue to be the agricultural center of the state. So, too, will parts of the state where irrigation will play an expanding role.
Because it is the intersection of several railroads and two interstate highways, Fargo will be an important growth point in the Upper Midwest. And Grand Forks will not be forgotten: Instead, its role will grow more specialized. The city will remain an agricultural hub and achieve those other successes that its innovators strive for, innovators in the private sector and at institutions such as the Energy and Environmental Research Center, the UND Medical School and the UND colleges of aerospace, engineering, business and so on.
But in the end, those of us in the east may soon have the chance to understand in reverse how westerners historically have felt about the attitudes in the valley.
Reach Kingsbury at kae@invisimax.com or (701) 738-4810.
