Q&A: Mayor at center of Dakota oil boom is optimistic about troubles

As new mayor of one of the nation’s fastest-growing small cities, Howard Klug must steer Williston, N.D., through traffic woes, high rents and an increase in crime. The oil boom in the Williston Basin has brought with it thousands of people from out of state, but infrastructure, housing and essential services haven’t kept pace.

Klug, who took office on June 24, beat a mayoral opponent who had wanted to capitalize on the boom to turn the city into an important new urban hub. Klug called for keeping the city’s small-town feel and not getting too carried away. He also has a lot to say about the controversial practice of flaring natural gas extracted from oil wells, detailed in a Los Angeles Times report on the issue.

A night after celebrating his election win with about 100 supporters at the motel he co-owns, Klug sat down to answer some questions about his vision for tackling the city’s challenges.

Was the election a referendum on what to do with this city?

It was change and ideas. It’s hard to manage when you double the population in five years, or triple in five years. We have about 30,000 people in town, and a service area of 45,000 people (up from 13,000 in 2009).

The mayor’s race was a lot of, “We should do this; we should do this,” but not a lot of, “How do we do this?” You’ve got to have a plan, and that’s how I ran things. We have a plan; Williston has spent a lot of money on consultants.

Then, a “how” question. In 60 or 70 years, when these wells stop giving, how do you avoid becoming like Detroit?

Detroit isn’t No. 1 in soybeans, lentils. They don’t have the wheat fields we have. Agriculture is No. 2 here. So now you’re not a Detroit, where you’ve obviously relied on autos and steel. We are a regional center. We have all the medical, all the retail. I don’t think anyone’s going to stop eating hamburgers, so you are going to have cows.

Aren’t you losing farmland?

They are putting a lot more oil wells on one pad, so we’re not losing what we once were. And we have a lot of water resources out here, and we have a rail. And the highway systems are going to get better; even though you’re struck in traffic today, they are going to get better.

We’re going to have a new regional airport, though by that time, the new one will probably be obsolete again. Anyhow, it’s just the things that are going to work together. Before oil, we were working on a French fry plant, tourism. Those kinds of things will help. I don’t ever see us being a city of 150,000. We’ll be a little smaller, but we’ll be OK.

How are you going to work with the other oil boom towns near you?

Watford City, Stanley, Tioga, Dickinson, Killdeer -- we have to have a united front. We are going to go down to Bismarck [the capital] and say we have to have more oil money coming back here. I’ve been ridiculed about this a little bit, but if the state supports us fully for five, six, seven years, then we’ll take care of it for 40 years.

The formula started out giving us back 11% of oil revenue funds, and that wasn’t enough. It’s 26-27% now. But 40 would be a nice number. Let’s do that until we get the infrastructure, until we get the roads in the place -- everything we need to function.

We’re not a million people in North Dakota yet, but we’ve got a lot of people out here using up the roads; a lot of big trucks.

Are you essentially asking for a loan from the state?

No, I want that money ... no strings attached. After that’s all said and done, this oil money is going to be flowing for another 30 years. And then we won’t need as much money in western North Dakota, so let’s share the wealth. It used to be Fargo’s sales tax was the driving force. Now, it’s western North Dakota’s oil.

So to you, what’s the significance of the recent news that the state is producing 1 million barrels of oil a day, a feat only a few places in the world have achieved?

I see that the oil companies are doing things that are right. They are making the wells here more productive. They can drill them faster at a lower cost. The next thing we do is make sure the gathering plants and transmission lines are safely in place.

What else is still problematic?

Human trafficking is one issue that keeps coming up. People that I talk to and trust say you’ve got an issue there. I’m talking about prostitutes and sex slaves and on and on. Our police force, we’re doing things to take care of the small stuff. I think through working with the federal government, they need to get a better handle on the drug use.

But it goes to the oil companies. There’s a lot of companies that have sprung up that all they do is make sure the oil workers are drug-free. So that’s helped quite a bit. We have to keep plugging away.

What is surprising for the folks coming in from out of state?

They are shocked ... that the housing issue is still being worked on. They claim we have the highest rents in the country, but you go to the tech group in California, Washington, D.C., Miami -- those rent prices are huge just like us. We have the land; we have the capability … supply will catch up with demand.

The other thing is you have to come up here with a set of skills. You can’t go from being somebody who works in the factory somewhere and say you’re going to be an oil roughneck the next day. If you’re a mechanic, if you’re a truck driver, if you’re an executive, if you’re a secretary -- you can find work. They have to do their homework before they come here.

Some of the other things that shock people. … We have Wal-Mart … we just don’t have the right retail mix yet. We just got an email today: Someone’s going to build a new four-story building downtown to make downtown like other downtowns in this region that people want to go to, live in and be a part of. It was originally supposed to be [a] seven-story building, but construction costs are paring it back a little bit. That’s pretty exciting right now.

The other day someone said, “You got to get a shoe store here.” I said, “Why don’t you wear work boots; we’ve got one of those places.” We just got to draw some companies in that realize we are the regional center.

Have you heard from any exciting companies?

Not so much. We’re looking for maybe a Target store, or a Kohl’s to give people some choice. People who move up here say, “Where’s your Starbucks?” We got coffee shops, but no Starbucks. It will get better.

What do you think about flaring?

The flaring, it’s wasteful. You force people to capture the gas, and they’ll figure it out. If it’s more feasible to change it into electricity on the spot, they are going to do that. Every time they drill a new well they learn something new. This is a testing ground.

It’s kind of hard to sleep when you’ve got a flare right there. But these oil companies -- they’ve been pretty good neighbors to us. Oasis, they built us a road. They wanted a pipeline underneath that road, but we said, “Why don’t you build us the road then? It’s easier for you than us because we have to go through regulation after regulation. You’re an oil company; you build a road where you want to go.” That’s not quite right, but still the way reality is.

Getting back to flaring, do you want to lose a million dollars a day, 2 million dollars a day? No, nobody wants to do that.

Why did you end up running for mayor (against an opponent who rents from you the space for a restaurant)?

I probably was the second-best person to be mayor in this town. The first one decided he wanted to do something else. I thought instead of saying, you’re second best -- figure it out. You know how to run the town. You’ve done it for six years on the city commission. You know what’s going on. It’s the logical next step.

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