Oil Boom Creates Bonanza for North Dakota Airports

Author: 
Dan Vnuk
Published in: 
November-December
2013

Until recently, North Dakota was largely considered a "flyover" state. Then its ample reserves of shale oil became a hot commodity, and now it's more of a "fly to" destination. 

As oil fields displace wheat fields and new construction flourishes throughout the northern half of the state, surges in population and industrial activity have strained North Dakota's infrastructure - including its airports. The state government, however, is using proceeds from special taxes levied on oil-producing activities to bolster infrastructure throughout the state. The federal government and local municipalities are also helping fund improvements.

In the meantime, thousands of people continue to arrive weekly, lured by plentiful, well-paying jobs. Local roads are full of tanker trucks hauling the "black gold" to rail heads for transport to distant refineries. And oil field roughnecks, roustabouts, truck drivers and mechanics crowd into "man camps" of hastily constructed barracks.

Some industry-watchers say the boom could last another 30 years. Environmentalists who oppose the "fracking" method used to extract the oil are working to end it immediately. As the situation unfolds, airports in and around the "oil patch" are under as much pressure as the water and sand that crews pump into shale seams to force the oil and gas up to the surface.

Sloulin Field International Airport, located in what many consider the epicenter of the oil boom, has logged more than 67,500 enplanements through September this year - up from nearly 24,000 at the same time last year. Things are also booming at Roosevelt Regional Airport in Dickinson, which had roughly 22,000 departing passengers - 3,513 more than the same point in 2012.

Revenue from aircraft registrations and excise taxes on new aircraft and fuel sales is also up. Sheila Doll, who handles registrations for the state, reports a steady increase during the last few years.

New Realities

Larry Taborsky, director of the North Dakota Aeronautics Commission, reports that airport projects will be ongoing, and increased funding will help get facilities on track to accommodate the recent passenger influx. "Back in a different time, the places were set up for a certain volume of traffic and type of aircraft," Taborsky explains. "We're finding, just like roadways, that they are getting stretched beyond their capacity."

Earlier this year, the state legislature approved a $240 million Oil and Gas Impact Grant Fund - $60 million of which was earmarked for airports. In August, the state awarded more than $27 million of the funds to support construction and maintenance projects at 11 airports that are feeling the brunt of the oil boom.

"Airports in western North Dakota are experiencing record increases in boardings and activity, requiring additional investment in new and expanded terminals, runways and other maintenance needs," Gov. Jack Dalrymple said in a press statement. "These state grants will help airports in our counties address the impact of rapid growth and enhance air travel opportunities for our citizens."

The day before North Dakota established its grant fund, state lawmakers announced that the FAA was providing $17.5 million for improvements and construction projects at 10 North Dakota airports. 

"Recommendations for (state) awards were reviewed and approved by the Aeronautics Commission," explains State Land Commissioner Lance Gaebe. "Projects that are eligible for or are set to receive federal funding are ones that were given priority. Local cost-shares for projects also were taken into consideration."

Nearly $1.9 million was awarded for construction of a new airport in Bowman. Dickinson Theodore Roosevelt Regional is scheduled to receive approximately $1.26 million, most of it for expanding the airport's apron and snow removal equipment building. And just over $1 million was awarded to Crosby Municipal for apron improvements. Remaining funds were divided between airports in Williston, Kenmare, Killdeer, Mohall, New Town, Stanley and Tioga. 

Grants were approved unanimously by the Land Board, which includes the governor, attorney general, state treasurer, secretary of state and state superintendent of public instruction.

"The commission was able to give out heftier grants this year, for the 2013-2015 biennium, because it received oil impact money," explains Kyle Wanner, an aviation planner with the North Dakota Aeronautics Commission. "The legislature and government allocated $60 million for oil impact on the airports in western North Dakota, and an additional $6 million for airports elsewhere in the state. Because of the oil boom, most airports in the state are being hit with business traffic that wasn't there before."

Wanner cites the airport in Mohall, which went from housing three planes to 25 in one year, as an example. "It's more of an indirect effect outside of the oil patch, but those airports are still growing, too," he explains. "And many small airports weren't designed to handle the increase in traffic, which is why they needed the grants for improvements. While the oil boom is bringing in more business traffic at many airports across the state, rural airports are also used by agriculture aircraft, emergency services and people who fly planes for fun."

Modernizing MOT

Minot International Airport (MOT), long known for its massive Air Force base, is now dominated by oil field laborers who fly in for a few weeks of work, then fly home for a week off. With enplanements nearly tripling in the last five years, MOT received $21.2 million in state grants this year - more than any other airport in the area. Fully $18.5 million of the funds have been allocated for a new terminal.

"The city is funding about one-fourth of the project, and the airport also has been awarded $18.5 million from the state in oil impact dollars for airports," reports Airport Director Andrew Solsvig. "The city is awaiting word on an additional $3 million in federal funds before issuing a full order to proceed with construction."

Minot City Council has, however, accepted a $40.7 million bid from Graham Construction Services, allowing the contractor to break ground, mobilize equipment and install underground utilities and foundations.

In July, MOT logged 19,158 boardings - up from 6,489 in July 2008.

Sharing the Wealth

Although Jamestown Regional Airport (JMS) and Kulm Municipal are not in the oil patch, they are still benefiting from revenues it is producing. "The statewide airport growth should benefit the state's economy," Wanner explains. "According to a 2010 North Dakota Aeronautics Commission study, the total economic output from all airports in the state was about $1.06 billion. The total output from general aviation airports, or small, rural airports, was about $131 million."

JMS, in the southeastern section of the state, completed its new terminal last year, and TSA set up shop in December. With grants from the North Dakota Aeronautics Commission, FAA and Jamestown Regional Airport Authority, it was a banner funding year for the small commercial airport. In addition to the new terminal, JMS also installed a new beacon and tower and added new hangars.

"We basically quadrupled our capacity, and the project came in just under the projected $2.1 million estimate," reports Airport Manager Matthew Leitner. "The existing terminal was built in 1960, while the Cold War was heating up. It was capable of serving as a nuclear fallout shelter. Although the old terminal once included offices for the Federal Aviation Administration's flight service station - essentially a weather office - it still lacked the space now required for updated airline security requirements."

About 40 miles south of Jamestown, Kulm Municipal Airport received five grants totaling $47,275 from the aeronautics commission this year. "They were very kind to us," says Lorence Holmgren, chair of the Kulm Airport Board.

Kulm Municipal, a grass strip facility with seven based airplanes, is one of the 36 North Dakota airports that rely completely on state and local funding. The state's other 53 airports are eligible for federal funding because of their sizes and services.

The facility in Kulm is using its grants to build a new terminal with a bathroom, running water, office and lobby. "If pilots fly in, they'll have a place to relax," notes Holmgren.

Kulm Municipal opened at its current location in July 2009, after the town's previous airport, built in the 1960s, was closed in 1995 due to flooding. In 2010, it was named General Aviation Airport of the Year by the state aeronautics commission.

New Airport in the Works

Bowman County Airport, in the southwest corner of the state, is planning a new complex that is expected to cost around $12 million, funded primarily by the FAA. When the new facilities are finished sometime in 2015, they will replace the aging Bowman Municipal Airport, explains Brent Kline, who manages the airport and its fixed-base operation, Bottom Line Aviation.

"I think this new facility could definitely take a load off some of the other airports in the area that are overloaded from all the oil patch activity," Kline says. "Although the new airport will not feature commercial air travel, the proper amenities will be there for possible commercial travel in the future."

The runway will be 5,700 feet - about 20% longer than the current airport's strip; and the new airport will feature more hangars and a larger, county-owned facility to house aircraft.

"I think the new airport could really be a hub for southwestern North Dakota," says Kline. "We will be able to accommodate bigger planes, and it will have a better navigation system."

With the FAA footing 90% percent of the bill and state funds covering another 5%, local government is paying 5% for the new facility. "The price was right for Bowman County," Kline notes. "People are excited, and there is a strong backing in the community." 

Brosz Engineering is designing the complex. Foothills Contracting has been selected for preliminary dirt moving and grading, which is expected to be finished next July. The land housing Bowman Municipal Airport, which opened in 1944, will eventually be sold.

Sustainable Pace?

As renovations and new construction projects help airports throughout the state manage the new levels of traffic that initially overwhelmed them, officials strategize about accommodating future needs without overbuilding.

Oil production has increased six-fold since 2006, and North Dakota currently boasts the lowest unemployment rate in the United States. Last year, its per capita gross domestic product was nearly 30% higher than the national average, after years of lingering at the bottom of national rankings.

But no one knows exactly how North Dakota's oil boom will unfold over the long-term. And that leaves aviation planners and individual airports in a tough spot. Meanwhile, the oil continues to flow and a record amount of passengers continue to fly into and out of the area.

Subcategory: 
Terminals

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