The biggest roadblock to a more robust development of the Bakken oil riches isn’t transportation of the crude, sufficient water for hydraulic fracking or even enough investment money.
That’s the analysis of Fred Dickson, chief investment strategist and senior vice president for Davidson Companies, which is headquartered in Great Falls.
Chief executives for Haliburton, Slumberger and other major companies drilling in the Bakken all complain about the drug problem, Dickson said.
“They are just having a dickens of a time finding employees and keeping them on the job, even though the wages for those oil service jobs, by any stretch of the imagination, are outrageous,” he said. “And the biggest reason coming back is drugs.”
Many applicants who hear they have to take a drug test to get hired and then submit to random tests just walk away, he said.
The problem is endemic and affects other industries and regions, Dickson said.
“This is a national problem that everyone wants to hide under the rug,” he said.
The analyst from Lake Oswego, Ore., was in Billings Thursday to brief D.A. Davidson clients on what is happening with state, regional and national economies.
The U.S. economy is “firing on most cylinders, but not at full speed,” Dickson said.
The national gross domestic product should grow by 3.25 percent this year, he said, and predicted no recession in 2014.
Last year ended with an economic bang, including a 26.5 percent hike for the Dow Jones Industrial Average, Dickson said. That number doesn’t reflect the recent correction.
“We just finished our 15th quarter in a row of all-time record economy activity in the United States,” he said.
The hottest industries are autos, housing and industrial production.
“I’d put a big red circle around aerospace. The aerospace industry is absolutely rocking,” he said.
The country’s debt now sits at $17 trillion. In future years when interest rates start rising, politicians will be fiercly fighting over which programs to fund because more money must go toward paying the interest on that debt, he said.
California is facing its most severe drought in 140 years – the worst since record-keeping began in the 1850s, Dickson said.
But Montana is an oasis.
At a time when many people again have money to travel, Montana is a major tourism destination. The state has a budget surplus, a strong agricultural economy and natural resources.
Eastern Montana has enjoyed six years of spillover effects from the “incredible explosion of activity” in the Bakken, he said.
“I see that tangibly each time I come to Billings when I look around and I start counting cranes and building structures,” Dickson said. “Whether it’s a parking structure, new homes or new service businesses, this is going to be an activity that will remain in place for a significant period of time.”
This Bakken boom should last for a generation, he said.
Key issues that could rein in the Bakken will be more evident by 2018 to 2020, he said.
“Will there be enough workers, enough distribution system growth and enough water for the simultaneous development of these plays?” Dickson said.