Spearfish conference offers how South Dakota businesses can benefit from North Dakota oil

IndustriesAssociated Press

South Dakota's oil and gas production is a fraction of North Dakota's, though the organizer of a conference this week in Spearfish said the southern neighbor could prosper if companies step up to supply much-needed products and services to the burgeoning oil patch.

"It's literally like the gold boom rush of the start of the Black Hills' explosive growth," said Branden Bestgen, also the Sturgis City Council president. "But it's with an oil boom."

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He said the Black Hills Bakken and Investor Conference, which runs Wednesday and Thursday, was first held two years ago as a general introduction to the potential for South Dakota to play more of a role in North Dakota, which is now second only to Texas in oil production.

This year's gathering will include specifics on how business owners can tap the energy markets and expand that segment of South Dakota's economy, which is largely based on agriculture and tourism, Bestgen said.

One of the presenters will be Patric Galvin, president of South Dakota Proppants in Hill City, which is investing $66 million to mine sand that's well suited for fracking. He plans to start operating by late 2016, employ 330 people from the Black Hills region and truck the sand to nearby mines in Wyoming and North Dakota, he said.

"This sand is a rare and unique find. There's no suitable sand in North Dakota," Galvin said.

Jeff Zarling with the Williston, North Dakota, marketing firm Dawa Solutions Group said the state's growing population brings added need for all services, not just those related to petroleum, such as medical and retail. For example, one out-of-state dental group set up a practice in the oil patch and the dentists rotate in every two weeks, he said.

Business owners should stick with what they know because there are huge challenges to operate in North Dakota such as housing, cost of labor and transportation, Zarling said.

"The opportunity is large, but you don't just show up and punch your lottery ticket," he said.

Those high operating costs in North Dakota are why more manufacturers are setting up in South Dakota, Bestgen said.

South Dakota does have oil and gas reserves, but they'll likely remain mostly untapped until new technology comes along and probably never rival North Dakota, said Derric Iles, state geologist with the state Department of Environment and Natural Resources in Vermillion. The state in 2013 hit the highest annual production since it started in 1954, just over 1.8 million barrels of oil.

"North Dakota produces that amount of oil in less than two days," he said.

Still, South Dakota hasn't given up attracting new drilling and has tried to make it easy by posting online all data that's relevant to oil exploration, Iles said.

"We've gone from having to fly to Rapid City to dig through files in paper form to being able to be anywhere in the world and access that information from your computer," he said.


Contact Carson Walker at https://twitter.com/carsonjw



Conference: http://www.BlackHillsBakkenConference.com

SD oil data: http://www.sdgs.usd.edu/sdoil/index.html