Knife River Sharpens its Business Strategy to Serve the Booming Williston, N.D., Market.
By Mark S. Kuhar
According to the U.S. Energy Information Administration, U.S. oil imports are down significantly from the historical highs of 2004 and 2005. And you may be shocked to learn that by 2017, investment bank Goldman Sachs predicts the U.S. could pass Saudi Arabia and overtake Russia as the world's largest oil producer.
If that is indeed true, you’ll need to look no further than Williston, N.D., for the reason why. Advances in technologies such as hydraulic fracturing (fracking) and horizontal drilling have made, by some estimates, as much as 11 billion barrels of oil available in the Bakken formation under North Dakota and Montana.
The Williston area basically skipped the recession entirely. Unemployment there is less than 2 percent – meaning if you’re not working, you don’t want to. There are between 2,000 and 3,000 job openings in Williston at the moment. Mayor Ward Koeser estimates the population has grown from 12,000 to 20,000 in the last four years.
The population increase in the Williston area brings with it the need for infrastructure development and adequate housing. That means the construction market is booming. Knife River Corp., sensing opportunity, opened a Western North Dakota Division with full aggregate, ready-mix, asphalt and concrete construction services. Headquartered in Williston, division employees will perform private and public work throughout western North Dakota and eastern Montana. Knife River already had a strong presence in the towns of Bismarck, Fargo, Beulah and Washburn, providing primarily ready-mix, aggregates and concrete construction in those markets.
Koeser said he is encouraged that Knife River chose to expand into his region of the state. “I am pleased to see a construction company with a solid reputation and proven project record bring more products and services to our area,” he said. “We have had unbelievable growth in Williston which has put a strain on our infrastructure. Road development and reconstruction and residential expansion are primary needs within the city and county. Knife River will be a great addition to our business community.”
Setting Up Shop
Brad Arntson is Knife River’s new Western North Dakota Division president. Arntson has more than 35 years’ experience in the construction industry.
“We look forward to working with the energy companies, municipalities, the Department of Transportation and county personnel, farmers and business owners in the area,” Arntson said. “Knife River is a North Dakota home-grown company and is proud to be expanding within the state, providing more construction jobs and the necessary products and services to build the state’s infrastructure.”
Knife River’s new office and production equipment is located on property in north Williston, featuring a sand and gravel plant, ready-mix operations and an asphalt plant. The aggregates operation was a greenfield operation that was acquired and permitted in the record time of only about a year. Equipment for crushing and screening was brought in from other Knife River operations to meet the immediate need for material.
Between its new and existing operations, the company hopes to provide about a half-million tpy of material to local projects.
“We’re having the time of our life. This is like the gold rush,” Arntson said. “It’ very challenging. We have people coming from all over looking for work. We get maybe 50 applications a week. But the biggest challenge is finding housing for our employees.”
The company thus far has managed to buy, build or rent enough living space for its new work force. “We had a good year in 2011, and we certainly hope to exceed that next year,” Arntson said.
North Dakota is Rockin’
Rob Rebel is the president of Knife River’s Central North Dakota Division based in Bismarck and oversees Bismarck and Fargo, and associated plants and personnel. As a native of North Dakota, he has a unique perspective on the explosion of the Williston market.
“This is actually not the first boom for Williston,” he said. “There was an earlier rush that wound down in the early 1980s. Fracking technology ultimately made it feasible to access the oil that was still under ground, so that earlier boom set the stage for what we see there today.”
The state has done a great job managing the fast pace of development, according to Rebel. “We have an outstanding DOT here, and they have done a great job identifying the need for adequate infrastructure,” he said. “They try to respond as fast as possible. The boom came so fast, that was a difficult task. It’s certainly a challenge for them and they are doing everything they can.”
Under normal circumstances, the winter weather would bring the construction season to a halt in North Dakota. Not so with oil exploration. “The drills are running non-stop,” Rebel said. “We’re limited by the weather, and there will always be times of the year we cannot produce aggregates, ready mix or asphalt.”
The incredible increase in truck traffic associated with oil exploration has meant a lot of damage to local roads. One of Knife River’s jobs will be to stay on top of that as the years go on. “The state imposes road restrictions in the spring when the roads are susceptible to damage,” Rebel said. “That also restricts our movements so we have to live with that as well.”
Knife River sees the need for locally available aggregates in the area for the foreseeable future. “We are well situated right now, but the truth is, the area is using aggregates very fast,” Rebel said. “Surrounding cities are also in need of construction materials as they expand to support the activities in the Williston area.”
Knife River: A Company on the Grow
Knife River Corp., based in Bismarck, N.D., is a wholly-owned American company. Knife River is one of the top 10 aggregate, ready-mix and sand and gravel producers in the nation. At peak construction season the company employs more than 5,000 men and women who have been widely recognized for their superior customer service. “We are sitting on a foundation of more than 1.1 billion tons of aggregate and provide a wide variety of products and services necessary for building America’s infrastructure,” according to the company.
Knife River has become one of the fastest-growing aggregate and construction companies in the central, southern and western United States. The company has acquired nearly 70 companies located in 13 states and are licensed to perform work in many more. Its core business lines include aggregate, asphalt, ready-mix concrete, liquid asphalt and cement.
Knife River's Mission: Knife River Corp. will be the supplier of choice in providing quality construction materials and services that benefit our customers and build strong communities.