Appendix A Population Projection Study
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1 Westhope Comprehensive Plan Appendix A Population Projection Study 48
2 K 3 W Keith Witwer & Associates Helping your community plan for the future February 27, 2012 Westhope, North Dakota Population Study Prepared for Ackerman-Estvold Engineering and Management Consulting Inc. Keith Witwer, MSE, MBA Keith Witwer and Associates klwitwer@gmail.com Report prepared by James Ondracek, Ph.D Valley View Drive Minot, ND ondracek@srt.com Study Scope: Westhope, ND at 2010, 2015, 2020, 2025, and 2030 as impacted by mineral development Disclaimer: Population projections depend on information inputs concerning mineral development and are subject to change as additional information is known. 1
3 Westhope, North Dakota s Current Population Westhope, North Dakota is a city tied to oil and gas development. Its population peaks (824 residents at the 1960 census and 741 residents at 1980 census) directly correlate to prior boom times for oil and gas development in the region. By the 2010 census report, Westhope s population was reported to be 429, a drop of nearly 50 percent (-47.94%) from its peak population in However, by winter 2011/2012, Westhope s population is approximately 550 ( estimated to be 549 people) representing a 16.6% increase from the 2010 census report. This estimate is derived from an examination of Westhope s 2010 Census vacancy report, Westhope motel, mobile home court, and residential occupancy changes since 2010, and modeled oil and gas driven population allocation. To confirm and triangulate this estimate, Margo Helgerson, Mayor of Westhope, provide a driving tour of Westhope and graciously answered questions during the tour and at a prior meeting held in Minot. Table1: Westhope, ND Population: Decennial Censuses and December 31, 2011 Estimate Year Population Change from prior decennial census 1910 Census Census % 1930 Census % 1940 Census % 1950 Census % 1960 Census % 1970 Census % 1980 Census % 1990 Census % 2000 Census % 2010 Census % Dec. 31, 2011 estimate Source: U.S. Census Bureau and KW & Associates 2
4 Westhope s Future Population and Mineral Development Even with an uptick in population since 2010, Westhope has been on the sidelines as new mineral development occurs to its west. Reflecting this condition, Westhope has unabsorbed housing options including vacancies at its two motels and its mobile home court. However, in the next decades Westhope should experience ongoing mineral-driven population growth resulting in a population peak that exceeds its former high recorded in Even though Westhope s position may remain at the periphery of Bakken/Three Forks oil and gas development, it is well positioned for growth. First, Westhope is a center for oil and gas services. These include two well service firms (MBI and Ham s Well Service), a trucking firm (Diamond B Trucking), and an oil well supply house. Collectively these businesses now employ over 360 workers and MBI and Diamond B Trucking are currently hiring more workers. While many of these firms existing employees currently live outside of Westhope, the fact that a cluster of oil and gas service businesses is located in Westhope will influence new workers location decisions. In addition, Westhope is home to a small number of non-oil/gas businesses and organizations that can provide employment for spouses of oil/gas employees. These include Deva Lifewear, a handful of downtown businesses, and a K-12 school. Further arguments for Westhope s ability to accommodate growth are the following. Westhope has able leadership. Westhope s bank is locally owned and its owners are interested in Westhope s image and success. Land contiguous to Westhope appears to be held by owners willing to sell or develop the land. Finally, Westhope s utility infrastructure has immediate capacity to serve the needs of a population of 700. While the primary driver of Westhope s growth will be oil and gas development in the Bakken/Three Forks (BTF) region, a secondary driver is possible with potash extraction and refining installations. Certainly, housing potash industry workers will give Westhope more population stability than those BTF cities without potash development impacts. Modeling of Oil and Gas Impacts The following discussion parameters were provided by Mr. Lynn Helms, Director of the Oil and Gas Division of North Dakota s Department of Mineral Resources. According to Director Helms, two drilling phases are necessary to secure Bakken/Three Forks oil leases in the North Dakota BTF region and to fully tap the leases production potential. The first drilling phase is forecast to employ approximately 225 rigs to secure oil and gas leases. As oil and gas leases are secured, a second drilling phase will employ approximately 225 rigs annually until all properties have been fully drilled. To secure oil leases, phase one will require 7,000 wells to be drilled. To fully tap oil properties with pattern drilling, Mr. Helms now projects that an expected 43,000 phase two wells will be drilled for a total of 50,000 wells. (As recently as 3
5 Year Population spring 2011, Mr. Helm s expected values for the entire BTF region were just 28,000 total wells with approximately 200 phase-one rigs and 135 phase-two rigs.) Drilling is labor intensive but production is not. Moreover, as the wells gas and fluid production decline, fewer production workers are needed. Nonetheless, for both drilling and production the population impact is magnified by economic multipliers for secondary oil and gas workers, tertiary workers, and household size. Such magnitude is decreased by the fact that a proportion of oil and gas drilling workers live at/near the jobsite and commute to homes elsewhere. The BTF region is large as is the population associated with oil and gas drilling and extraction. If Westhope can capture its proportionate share of direct oil and gas workers, secondary oil and gas related employees, tertiary workers, and dependents, the city s oil and gas driven population could peak at 2030 with 1,087 people (including transients) or 1,021 people (not including transients). Table 2 shows Westhope s permanent population, while Table 3 shows its population with transients. Graph 1 shows the total population for Westhope with and without transient generated population. (Note: transient workers are those workers who follow the drilling rigs.) Table 2: Westhope, ND Population as Impacted by Oil and Gas Development: Permanent Population 4
6 Year Population Table 3: Westhope, ND Population as Impacted by Oil and Gas Development: Permanent and Transient Population Graph 1: Westhope, ND Transient Oil and Gas Population and Permanent Oil and Gas Population 5
7 Appendix A: Westhope s Population and Potash Development Questions have arisen about potash development in North Dakota. As recently as Oct. 2011, Director Helms expected to see a series of potash developments with the first beginning at 2015 and subsequent developments spaced apart at five year intervals Graph 2 models Westhope s population attributable to potash development. Certainly Westhope could capture potash-related population; however, this population would be shared by Ward, Burke and Divide Counties as well. A recent Minot Daily News article dated February 25, 2012 indicates that a 2010 potash test well drilled near Lignite, ND was not as favorable as expected. Thus, potash development may be postponed or redirected. If potash development occurs as originally expected it would marginally contribute to Westhope s population and would buffer its eventual decline. Graph 2: Westhope, ND Potash Derived Population Timing and Impact 6
8 Year Series Series 2 Westhope s Population: Total Mineral Development Impact (Oil, Gas, and Potash) The next Table 4 and Graph 3 develop Westhope s total mineral derived population. At 2030 Westhope s population recognizing permanent and transient oil and gas and potash impacts is projected to be 1,171 people (Series 2) or 1,105 people counting permanent oil and gas and potash derived population (Series 1). By 2034 Westhope s population will decline to just under 850 people. Table 4: Westhope, ND Population as Impacted by Oil and Gas Development with Potash Derived Populations 7
9 Graph 3: Westhope, ND Population Derived from Oil and Gas Development and Potash Development 8
10 Graph 4 shows Westhope s permanent population with and without potash-derived population. While the timing of potash developments is open to speculation, potash developments would allow Westhope to have both a more stable and higher population than those cities in the BTF region that will not host potash workers. Graph 4: Westhope, ND Permanent Oil and Gas Derived Population with and without Potash Derived Population 9
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