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ByMatthewBrown The Associated Press WATFORD CITY, N.D. High crude prices catapulted North Dakota into the top tier of the global oil market and doubled or tripled the size of once-sleepy towns that suddenly had to ac- commodate a small army of petroleum workers. But now that those prices have tumbled, the shifting oil market threatens to put the industry and local gov- ernments on a collision course. Farming and ranch- ing communities that com- mitted to building homes, roads and schools for the swelling population are worried about how they will pay for those improve- ments as oil-related tax rev- enue evaporates. "Everyone is asking the same question: Holy cats, where do we go from here?" said Dean Bangsund, an economist at North Da- kota State University who has tried to help oil-rich McKenzie County gauge its needs, with an eye toward balancing growth against revenues. But none of his economic models were pes- simistic enough to match how low oil prices dropped. For now, the oil extrac- tion goes on. Despite the price plummet, drilling remains profitable in the heart of the state's Bakken oil patch, due to the sheer volume of crude flowing from so-called hot-spots. And so the building con- tinues in Watford City, a century-old town that once marked the end of the line for the Great Northern Rail- road. Roughly 60 rigs are drilling in surrounding McKenzie County — 40 per- cent of the rigs statewide. New neighborhoods and re- tail centers creep ever deeper into former wheat fields. "We're making a new, 15,000-person city in the middle of a pasture," said Brent Sanford, mayor of Watford, the county seat. "The question is if we get money put into the pot to do it." The county, which a de- cade ago had a population of about 5,000, has become a magnet for "man camps," where newly arriving work- ers and their families live in trailers, RVs and just about any other structure that can stand up to North Dakota's whipping winds. The pace of growth over the past decade has been "hyperventilating," slacken- ing only slightly as oil prices have fallen, Sanford said. "You can't catch a breath." With oil prices hovering near $100 a barrel for most of the past four years, am- bitious plans were laid out to transform the city from a chaotic, sprawling crash pad for transient workers into a larger, more livable community. Sanford and other local leaders drafted a long wish list — more housing, more schools, bet- ter roads, a new water treat- ment plant and expanded law enforcement. Developers eager to cash in started construction of thousands of apartments and single-family homes. A new high school and civic center began to take shape. A new bypass was built to the south of town to ease traffic jams. Then oil prices began to drop, falling to roughly $50 a barrel now. Daniel Kuo, vice presi- dent of a Chinese-backed real estate company that's building a 2,000-unit hous- ing complex on the out- skirts of Watford, keeps a close eye on oil prices. He's met with McKenzie County economic-develop- ment agents to soothe any worries that the company might pull back. "You're in too deep to let a price blip derail you," Kuo concluded at the end of one meeting. He shared the op- timism expressed by San- ford and many others in Watford that oil prices will rebound. Leaders in the North Dakota Legislature have pledged to keep public- works improvements as a priority. Whether that's sus- tainable depends on how long oil prices stay down. Oil and gas revenue fore- casts for the state already have dropped $4 billion, re- ducing earlier projections by roughly half. Watford and McKen- zie County have joined other western North Da- kota counties in seeking help from the state. Politi- cians and business leaders from the region flocked to the Capitol in Bismarck to press the Legislature for a larger stake of what's left of the oil revenues. Towns like Watford are worried about getting sad- dled with all the downsides of the boom — dangerously crowded roads, overtaxed utilities, jam-packed schools and unchecked growth — without the financial means to impose order. "At this point, it's like downtown Seattle," said Aaron Pelton, who owns Outlaws' Bar and Grill along Watford's main thor- oughfare. "If you can't come to a small community and have a quality of life, what do you have?" Like many oil towns, Watford has endured the boom-bust cycle before. Oil was first found in McKen- zie County in 1952. Within a decade, hundreds of work- ers had moved on. Another boom kicked off in 1976, with up to 100 wells a year being drilled until prices started plummeting four years later. In the last decade, the in- dustry refined the hydrau- lic fracturing, or fracking, technology that allows drill- ers to pull oil out of rocky shale. The fracking rush has seen more than 11,000 wells drilled, and analysts predict a total of 50,000 to 60,000 before all the oil is gone. Industry observers expect the wells already in place to sustain last year's production level of 1.1 mil- lion barrels a day at least through 2015. TROUBLES IN BOOMTOWN Drop in prices raises alarm in North Dakota's oil patch By Joan Lowy The Associated Press WASHINGTON Hoping to start a national conversa- tion about future transpor- tation needs, the Obama administration released a report Monday that iden- tifies key population, en- vironmental, cultural and technology trends ex- pected to shape the way Americans get from one place to another over the next 30 years. By then the U.S. popu- lation will grow by 70 mil- lion, the equivalent of add- ing another Texas, Florida and New York. Much of this increase will be in cit- ies in the South and West. At the same time, the num- ber of Americans over age 65 will increase 77 per- cent, and one-third of se- niors will have a disability that limits their mobility. At the same time, the nation's 73 million mil- lennials, the first genera- tion to grow up with the Internet, will become an important economic en- gine. So far, they are driv- ing less than their Gener- ation X predecessors and many are gravitating to cities where they can bike, walk and take public tran- sit to work or school. Significant increases in freight shipments are forecast across all modes of transportation — high- way, rail, maritime ship and aviation. Already, a 50 percent increase in crude oil production since 2008 is straining the capacity of America's freight rail- roads. Transportation Secre- tary Anthony Foxx was sitting down to discuss the trends with Google Chair- man Eric Schmidt in San Francisco, the hub of the nation's technology sec- tor. Google has been at the forefront of develop- ing technologies that are expected in the next de- cade to lead to fully au- tomated cars that can be programmed to drive themselves. If there are no changes in capacity to the national highway system, recur- ring peak congestion is expected to increase from 11 percent of the system in 2007 to 37 percent in 2040. That will slow traf- fic on 21,000 miles of high- ways and create stop-and- go conditions on another 40,000 miles, the report said. The report's release comes as Congress is struggling once again to find the money to keep federal transportation aid flowing to states. The fed- eral Highway Trust Fund, which pays for highway and transit aid, has been teetering on the edge of bankruptcy since 2008. Revenue from the federal 18.4 cents-a-gallon gaso- line and 24.4 cents-a-gal- lon diesel taxes are run- ning more than $15 bil- lion a year short of needed highway and transit aid to states. Three blue-ribbon com- missions have recom- mended raising federal fuel taxes, and some law- makers are backing pro- posals to do that. But rais- ing fuel taxes is unpopular with the public, and many Republicans lawmakers have pledged not to raise taxes. President Barack Obama has proposed a 31 percent boost in transpor- tation spending. Obama wants to spend $478 bil- lion on transportation and infrastructure over the next six years, including a 75 percent increase for mass transit. Half of that money would come from current taxes on fuels and other transportation fees. BEYOND TRAFFIC Go ve rn men t se ek s national conversation about transportation MATTHEWBROWN—THEASSOCIATEDPRESS Oil pump jacks are seen McKenzie County, in western North Dakota. TUESDAY, FEBRUARY 3, 2015 REDBLUFFDAILYNEWS.COM | NEWS | 5 B