SD should ready for oil boom's pros, cons: experts

BELLE FOURCHE, S.D. — North Dakota's oil boom brings with it tremendous wealth and enormous problems — and both are coming to South Dakota, industry experts say.

South Dakota has oil wells in counties such as Butte and Harding. The state isn't poised to compete with North Dakota — which is expected to soon become the second-biggest oil-producing state behind Texas — but experts say that crude-carrying areas should prepare to see some of the same prosperity and problems.

Among the pending difficulties: increased traffic, housing shortages and skyrocketing rents.

Those issues were laid out for about 600 people who filled the Belle Fourche Area Community Center's auditorium late Thursday for a town hall meeting called "Coming Down the Pipe." The event was designed for experts talk about the frenzy in North Dakota's oil patch that is already trickling south.

"We want people to understand the effect of development and the stress it puts on the community," said Lynn Hammerstrom, former president of First Interstate Bank who lives in Belle Fourche, a town in northwestern South Dakota with about 5,700 residents.

The standing-room-only crowd listened to a panel of oil industry, infrastructure and economics experts, who gathered to answer questions about what residents and community leaders should do as South Dakota inches toward tapping its oil potential.

"Make sure you focus. It's all about planning," said Gene Veeder, a panel speaker and executive director of McKenzie County Job Development Authority who said constructing single-family units and affordable housing should be a priority.

Veeder should know: North Dakota's McKenzie County has seen rent prices steadily climb to averages of $1,500 to $2,000, he said.

"If you need 1,000 workers, you need to figure it out," he said. "I love the oil industry, but communities can say, 'We love you, but this is how we're going to do it.'"

But panelists said South Dakotans should embrace the possibilities. Truck drivers bring business, and communities will need parking, restaurants, truck stops and highway expansion — all of which will translate to more jobs, they said.

Already, U.S. 85 in South Dakota was expanded to a four-lane highway in December 2010 to handle heavier traffic traveling to North Dakota's oil patch.