INSIGHT ON: Construction Services – Booming business

Posted on Feb 4, 2013 :: Construction Services , Insight On
Posted by , Insight on Business Staff Writer

Freedom’s LongVANS is one of several New North companies benefitting from the oil boom in North Dakota. The company has provided the area with mobile offices, like this three-unit grouping in North Dakota, offering same-day delivery to the fast-growing area. Some Wisconsin companies are paying for their workers to commute to the area.

North Dakota oil fuels New North economy

Kevin Heiting was home for the holidays, back in Appleton where his parents and two brothers live. But after taking a couple weeks to relax, he was hard at work again in his new home, Minot, North Dakota.

“I moved out here last April, but I’ve been working on the projects here since the first of the year (2012),” says Heiting, a business development representative for LongVANS Mobile Office and Storage Solutions out of Freedom.

Heiting is part of a burgeoning workforce fueled by the North Dakota oil boom, with a pipeline leading directly to northeast Wisconsin’s economy through local companies like LongVANS. The manufacturer of portable office trailers, storage containers and housing units has seen a mushrooming demand for their products and services with the unprecedented building boom in North Dakota spurred by the oil industry.

“We’re all over the state from Fargo to Minot,” says Heiting.

The North Dakota oil boom is an ongoing process of extracting oil, mainly from the Bakken rock formation, which covers 200,000 square miles in parts of western North Dakota, Montana and Canada. Oil was discovered there decades ago, but it wasn’t until recently that advancements in technology allowed drillers to effectively tap into the huge reservoir of oil and natural gas buried thousands of feet below the earth’s surface. The horizontal drilling process, hydraulic fracturing, or “fracking,” involves blasting millions of gallons of water, sand and chemicals at high-pressure deep underground to create fractures in the rock, releasing the flow of oil or gas. The process has drawn controversy and debate between those concerned about environmental impact and those seeking American oil independence.

One thing no one can dispute, however, is the business boom sparked by the growth in North Dakota. Minot, the state’s fourth largest city, is roughly the size of Fond du Lac and borders the oil boom. The city has seen such rapid growth businesses are struggling to supply enough workers to fill all the job openings, a demand that is seeping across state borders into Wisconsin.

“We’ve hired four more drivers just for North Dakota and increased our customer care staff here in the Fox River Valley to work phones and handle orders coming in,” says Mark Diedrick, sales manager at LongVANS, which employs 70 workers locally. “We currently have two fabrication shops working double duty to get all this stuff prepared.”

Small businesses aren’t the only ones scrambling to keep up with the pace. Eau Claire-based building supply giant, Menard Inc., recently announced it will hire workers from its home base in Wisconsin and fly them to North Dakota to staff its Minot store, the only big-box building supply retailer in town. The company is offering higher-than-local wages and paying for flights and living expenses for workers willing to make the more than 500-mile weekly commute.

“The people of Minot … rely on us to provide them with the goods and services they need,” the company said in a statement released last November, during the height of the holiday shopping season. “We don’t want to let them down and have committed ourselves to do whatever it takes, however unconventional to fulfill their needs.”

Menards spokesman Jeff Abbott says the company would start training workers in the weeks following the announcement, and then fly them to North Dakota.

Getting workers to North Dakota is one thing. Finding places for them to stay is quite another. That’s where another Northeast Wisconsin company comes into play.

“We’re working on a new 165,000-square-foot hotel and casino project in Belcourt, N.D.,” says Randy Frahmann, project manager for Menasha’s Faith Technologies Inc. One of the largest, privately held electrical contractors in the nation, the company describes the current project as “small.” However, that is not to say they minimize the effect North Dakota’s building boom is having on Northeast Wisconsin.

“The building going on over there (in North Dakota) has absolutely had a positive impact on our business,” says Jason Spang, Stevens Point branch manager at Faith. “We’re hoping for more.”

While the newest of North Dakota’s residents can’t wait for a hotel to be built, many rely on containerized housing, or campers, like those provided by LongVANS. The company illustrates how its unique ability to fill this urgent need creates a ripple effect throughout the local economies in the New North region.

“If a customer calls in the morning with an immediate need for a containerized housing unit, we can have it there by the end of the day. We build them here and send them there,” says Diedrick, adding, “There again we’re buying all our supplies locally. We’ve purchased three new trucks from Truck Country in Kaukauna over the past three months to transport all this equipment.”

Even the dollars Kevin Heiting earns in North Dakota make their way back to Wisconsin.

“I still do my banking at a locally-owned Fox Valley bank and my paychecks are direct deposited there also,” he says.

While Heiting’s recent holiday purchases may not have had a major impact on the local economy, he made sure his own earnings from North Dakota made a drop into northeast Wisconsin’s prosperity pool.

“I did the bulk of my shopping in the Valley,” he says. “I also bought new tires for my North Dakota vehicle in Appleton while I was there over the holidays.”

Where those new tires will take Heiting and the rest of the workforce currently stationed in North Dakota is yet to be seen. But by many accounts, the impact North Dakota oil is having on the New North economy has barely been tapped.