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Boom & Bust: How Big Oil Boomtowns Can Survive—and Thrive—for the Long Term - Pacific Standard

Boom & Bust: How Big Oil Boomtowns Can Survive—and Thrive—for the Long Term

To kick off our week-long series on booms and busts, Jamie Wiebe looks to North Dakota, currently the fastest-growing state in the union, to see how local planners are preparing for what's widely considered to be an inevitable crash.
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Housing for oil workers in Williston, North Dakota. (Photo: Target Logistics/Wikimedia Commons)

Housing for oil workers in Williston, North Dakota. (Photo: Target Logistics/Wikimedia Commons)

Calgary doesn’t look like what you think a boomtown should: It’s the fourth-largest city in Canada, home to a little over a million people. You’d be hard-pressed to consider it struggling. But in the early 1970s it was booming, as its province Alberta hit gold (well, oil) and Calgary, its largest metropolis, took in the newcomers seeking their fortune, its population swelling 46 percent. It had all of the signs of a boomtown in the making, and in the eventual breaking.

But Calgary didn’t break.

Oil wasn’t a surprise—Alberta had long held Canada’s most stalwart petroleum reserves—but a massive jump in the price of oil from $3 to $15 a barrel in late 1973, spurred by tense relations between the Middle East, Israel, and the United States, meant what had always been a good but unexciting business was suddenly wildly profitable. The early ’70s created “more multi-millionaires than anytime before in Canadian history,” and Calgary was a city changed, according to CBC’s “A People’s History of Canada.”

“It was an opportunity to see what the power of planning can be,” says Frank Palermo, who arrived in Calgary in 1975 to take over the downtown and inner city planning committee. He was a recent graduate of Harvard’s architecture school with a master’s in Urban Design and was ready to do something permanent, to change a city in a beneficial, long-lasting way. Today, Palermo is a professor at Dalhousie University’s Architecture & Planning School and director of their Cities & Environment Unit.

A BOOMTOWN CAN BE both a blessing and a curse. The town is flush with money, but saddled with expensive projects and intractable problems, like housing the thousands of arriving workers. Today, an oil boom has made North Dakota the fastest-growing state in the union, and you’ll find different methods of addressing this from town-to-town; note the infamous “man camps” that dot the oil fields. Williston, North Dakota, has the most expensive rent in the U.S., with landlords charging more than $2,000 per month for a basic, one-bedroom apartment, according to a study conducted by Apartment Guide. That beats even the notoriously expensive cities of New York and San Francisco.

It’s not a death sentence to win the lottery, certainly not a sworn promise of future bankruptcy, but it takes smart investment and careful spending to ensure you come out ahead.

When you’re besieged by the immediate, emergency needs of a rapidly growing populace, it’s hard to take a step back to think about long-term planning. But according to Palermo and Shawn Kessel, the city administrator of Dickinson, North Dakota—currently experiencing its own oil boom, and named the second fastest-growing boomtown in the United States by CNN Money—that’s exactly what’s necessary. The sudden influx of money provides the perfect breeding ground for city-improvement projects that will help not just the now, but the future, too, laying the groundwork for steady growth and long-term residencies.

“It’s a planner’s dream from the standpoint that you are leaving a legacy that will be impacting this community. On the flipside, you’ve got developers, landowners, builders who have completely overwhelmed our ability to respond in a timely fashion,” Kessel says. But successful balancing of these two forces—meeting immediate needs while building the infrastructure to support the future—can turn a temporary boomtown into a thriving city, even after the bust.

Think of a boomtown as a lottery winner. We’re continually reminded of those who win the Powerball only to go bankrupt a few years later, their BMWs repossessed and McMansions foreclosed on. Fans of schadenfreude can salivate over stories of the unluckiest, which litter the Internet in slideshows and listicles. Mismanaged money can disappear in a flash—and so it goes for a town in the midst of a boom.

Taking advantage of the situation requires a city planner with a long-term vision and quick feet. “Planning is notorious for things being studied forever. It’s difficult to get traction,” Palermo says. “For a planner, it’s really wonderful when you can be thinking about the development you want somewhere and there’s enough resources locally to participate in it.”

Both Palermo and Kessel point to their own pet project made possible or rapidly accelerated by the boom. In our interview, Kessel highlighted Dickinson’s West River Community Center, a 93,000-square-foot mixed-use recreation facility on the west side of town, several times. “It’s probably the best indoor recreation facility in a three- to five-state area,” he says, and you can tell he’s just really darn proud. Their current plans for the facility are ambitious: adding climbing walls, an outdoor pool, an ice rink, and 35,000 square feet to the floor plan. It’s expensive, but it will make the city better in the long run, and it’s funded mostly by the boom.

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Bulldozers break more ground near Williston, North Dakota. (Photo: Tom Reichner/Shutterstock)

For Calgary, it was the C-Train, their light rail system. Light rail is the opposite of the quick-result developments governments often want to see during a boom, requiring a steep initial investment with a slow payoff. After its proposal in 1975, it took six years for the city’s South Line to open. Today, it’s one of the busiest light rail systems in Canada, trailing behind only Toronto and Vancouver in daily ridership.

“We’re reinvesting in our community to create a better quality of place,” Kessel says. Reinvesting seems to be the ticket to a successful boom. It’s not a death sentence to win the lottery, certainly not a sworn promise of future bankruptcy, but it takes smart investment and careful spending to ensure you come out ahead. Same goes for boomtowns: Just because the inspectors found oil doesn’t mean your town will rise and fall into ruins. It just takes an open-minded government and planners with an eye for both the future and the now to turn oil into stability.

“I think there’s a huge advantage in a boomtown if you can get the right attitude going,” Palermo says. It’s not just about the planners, of course. They have to convince the government, too, the city administrators whose eyes might be on the short-term prize. “In Calgary, the important thing was that a few city administrators and council members understood that it’s going through a phase and we really should think beyond it,” he says. A thriving city cannot be built without an amenable government, without workers willing to sacrifice flashy possibilities for future stability.

It’s easy to turn a blind eye to the busts and assume your boom will last forever, to build what are, essentially, shiny objects inspired not by necessity but by eyes bigger than the city’s population prognosis. Things like sparkling high-rises and bigger roads, not strictly needed but easy to justify.

“Planners have to say, ‘We want to be careful about what we build and build things that are going to last, that will have some potential of being filled,’” Palermo says. “Build too much, and we’ll be in trouble, because when this pace of growth slackens we’re gonna be stuck with empty buildings.”

“When we approach a decision, we approach it from the standpoint of how will this affect us in 20, 30 years? Is it something we can be proud of and something we need?” Kessel says. “Our overriding philosophy has been this: We’re gonna leave a legacy.”

The idea of a boomtown is perpetually illusive: Towns rise and then fall; people come and then go as suddenly as they arrive; buildings are filled and then emptied. Soon the town returns to what it once was, but with the withering shells of success and hope still standing, a reminder of what once was and what never will be again.

That booming could perpetuate growth—real growth, the measured kind that comes slowly—seems a radical idea, but for Calgary and Dickinson, it’s reality.

We’re telling stories all week on the theme of booms and busts. What’s on the edge—of becoming a big thing, or of falling off the radar? Read the entire series here.

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