North Dakota hands out first Bakken scholarship as oil prices slide

Seven years ago, the fast-chugging oil economy in western North Dakota lured Warren Logan from his hometown in Riverton, Wyo.

As oil prices sank this week, the 28-year-old Logan was announced as the first recipient of a scholarship designed to keep oil workers from leaving town as the industry spirals further down.

"The option to leave isn't a consideration," Logan said. "The family is enjoying it here."

Logan received a $5,000 scholarship toward his coursework in business administration this spring at Dickinson State University in the city where he now lives. The scholarship is part of an endeavor called "Bakken U," named for the region's shale formation and the oil it holds.

The program handed out the award amid deepening concerns for the oil industry. Crude oil prices, currently trading at around $30 a barrel, have fallen 51 percent since June and 72 percent since June 2014. Prices haven't been this low in more than a decade.

North Dakota already has been feeling the pain, with rig counts dropping steadily, down to less than a third of what they were at the peak of the boom. In December, the average count of active oil and gas rigs was 63, down from 181 in December 2014. As of Wednesday, 54 rigs, which employ about 120 people each, were in operation, according to the North Dakota Department of Mineral Resources.

Multiple factors are pummeling North Dakota's oil industry, including high global crude production, China's dragging economy and a strong U.S. dollar that makes the U.S. oil expensive in foreign markets.

Before the downturn, workers were streaming to North Dakota for high-paying oil jobs, spurring explosive growth in the region's economy. The state has led the nation with its low unemployment rate and population growth. State coffers were flush with unanticipated money. Now North Dakota is looking for ways to diversify its economy and keep workers.

The North Dakota University System, aware of the transitory oil workforce, last summer began developing Bakken U and the scholarship.

Jerry Rostad, director of Bakken U, said the aim is to keep those who came for jobs and helped liven the region. "We've got a lot of really dedicated oil workers and their spouses," Rostad said.

Bakken U is a program, not a bricks and mortar institution, that aims to broaden oil workers' job options with education and skills. Programs include accounting, energy and petroleum technology.

The scholarship is open to displaced and current oil workers and their spouses living in eastern Montana or the Bakken. In an abbreviated three-week application period that began in November, the scholarship had 30 applicants.

"We wanted to get this up and running for the spring semester," Rostad said.

Money is a big issue with the fledging program. Logan's award was funded by the North Dakota Petroleum Council, a trade organization of more than 500 companies.

It's still unclear, however, when the next scholarship will be offered, because it's dependent on funding and there is no more right now. The five schools involved are working both on fundraising and a framework, Rostad said. In addition to Dickinson, they are Bismarck State College, Dakota College at Bottineau, Minot State University and Williston State College.

"I guess you can look at it as the cup is half-empty, but you can also look at it is as the cup is half-full," Rostad said of the funding.

The pitch to oil workers has been that the schools are all within an hour of each oil-head in the Bakken, Rostad said.

Logan moved his family to Dickinson in June 2014 after seven years of commuting to Riverton. He, his wife and their three young children bought a home there, where Logan is a district manager at National Oilwell Varco, which provided the money for him to relocate. He's hoping that coursework in business management will help him advance.

Meanwhile, his wife stays home with the three boys — ages 5, 3 and 1. The young family has become active in the Dickinson United Methodist Church and the oldest son has started playing youth hockey. The family feels welcome in North Dakota and has found a "great community" in Dickinson, both among pre-boom residents and newcomers, he said.

Logan, who grew up on an Arapaho reservation in Wyoming, said that he previously tried college, but that he didn't make meaningful progress due to "youthful bad decisions."

For him, the oil slowdown is an opportunity for self-improvement. "For upward mobility," he said, "education is still an asset."

Rochelle Olson • 612-673-1747

Twitter: @rochelleolson