As Bakken boom eases, North Dakota looks for a second act
Roughly half of crude oil leaves the Bakken region by rail. This spring, construction is set to begin on a 1,100-mile pipeline for faster, cheaper transport.

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The change in Williston, North Dakota, is palpable.

Yes, the shale oil-rich economy is still booming. Unemployment stands at 2.3 percent, well below the national average. Household median income is more than $83,000, well above the national average. And construction workers plug away on the city's much needed infrastructure projects. But there's no denying that optimism, so prevalent here a year ago, is mixing with caution for many in this North Dakota boomtown that has come to symbolize America's energy revolution.

In the mid-2000s, a few pioneering drillers realized that hydraulic fracking would let them unlock crude in North Dakota's massive Bakken Shale play. Before long, the whole industry was scrambling to set up operations in the region. Thousands of out-of-state workers flooded in, looking to land a high-paying job. Nearly everyone seemed to be headed for Williston, the tiny town at the heart of the Bakken. In 2007, Williston's population was just over 12,000. Today, it's nearly 31,000. And the town's economic expansion has experienced the same meteoric rise. Over that same period, 25,000 jobs were created. More than 1,300 businesses were launched. Restaurants and hotels were built. Hospitals and community centers were overhauled. Read MoreInside North Dakota's latest fracking problem

But with the price of oil now well off its 2014 highs of over $100 a barrel, many drillers have cut back on their Bakken positions, announcing layoffs, or pulling out of the state altogether. WTI crude oil prices recently were trading under $40 a barrel. Continental Resources , one of the companies that led the fracking revolution in the state, stopped completing wells in the third quarter of last year. Whiting Petroleum , one of the state's biggest producers, made the same announcement last month. They'll wait for oil prices to climb before they frack the wells. That means hundreds of wells won't produce any oil, and thousands workers will be without jobs. As drillers have left Williston, so have many of the men and women who came to the city looking for work. In 2014, the workforce in Williams County topped out at 43,000. That figure is down to 34,000. And it's the combination of lower oil prices and more modest growth that has some locals and oil watchers concerned that leaner times could be on the horizon.

Feeling the pinch

Andy Njos, along with his cousin, started Dacotah West Crane Services in 2011. The duo were among the first to cash in on the oil rush. Brad Quick | CNBC

"It is definitely a different mindset now," said Andy Njos. Andy and his cousin Aaron Volesky started Dacotah West Crane Services in 2011. "Drillers have had to cut costs, and we have to figure out how to do jobs cheaper," Andy said. The duo bought their first crane in Houston and took two weeks to drive the machinery 1,600 miles back to their home town of Williston. They were the first among friends to cash in on the oil rush, but they would not be the last. Success came quickly. The cousins worked long hours, but couldn't keep up with the seemingly endless flow of work orders by themselves. They grew out of necessity. In just a few years, they expanded their fleet to nine cranes, hired 25 workers, and built a new corporate headquarters. In 2014, revenues at Dacotah West peaked with the price of oil. Since then, business is down 50 percent. Andy Njos shed overtime shifts, cut his staff to 10, and returned any equipment he did not own outright. Read More North Dakota wakes up to hangover as oil swoons

"We've had to downsize. We had to restructure the company," said Njos. "We went from nine to four cranes." Njos says his business is OK, thanks in no small part to how quickly he and his cousin scaled down overhead costs. He thinks 2016 will be a lean year in the Bakken. "Right now it's kind of stagnant. It's, 'Wait until oil prices go up a little bit,'" he said. "Everyone's just trying to survive."

Marcus Jundt opened the Williston Brewing Company in North Dakota in 2013. The restaurant has seen lower foot traffic and revenues. Brad Quick | CNBC

The cousins aren't the only business owners feeling the pinch. Marcus Jundt, a Minneapolis-based developer, opened the Williston Brewing Company in North Dakota in 2013. The restaurant has been a hit, with revenues cut in half. When times were good, every night was busy at his restaurant, and a two-hour wait for a table was not uncommon. But Jundt says his customer base took a steep drop last year. "It varies week to week, but every week keeps getting worse," he said. "We don't know where the bottom is, but we're not there yet." Jundt has had to lay off friends. His restaurant, like many other businesses in Williston, has had to cut wages. He says workers who aren't tied to Williston are leaving. Without the high paychecks to keep them rooted, and a national economy that's better than it was a few years ago, many out-of-state workers are leaving to find jobs closer to home. "Since we opened this restaurant three years ago, 32 restaurants have opened up," said Jundt. "There are too many restaurants for the number of people we have. But I think you can say that about gas stations, apartment buildings, houses. Almost everything in town is overbuilt." Hotels have also seen business decline. In January, the city's occupancy rate fell to 27 percent, compared with 62 percent in 2015. That's a dramatic shift from a few years ago, when parking lots were filled with men sleeping in their cars because they couldn't find a place to stay. Trailers without running water were fetching as much as $2,500 a month.

Capital Lodge - one of the Bakken's largest crew camps with 1,100 beds and cost $40 million to buil - now sits abandoned. Brad Quick | CNBC

Capital Lodge — one of the Bakken's largest crew camps — now sits abandoned. The 1,100-bed temporary housing facility east of Williston cost $40 million to build. The camp went under after the county raised annual permitting fees, coupled with plummeting demand for beds. While there are female oil workers, the crew camps have become known as "man camps." Another "man camp" operator, Target Logistics, has 3,900 beds on 12 properties spread across the Bakken. Their occupancy hovers between 40 percent and 50 percent. Other camps in Williston, with names like "Black Gold" and "ATCO," have been abandoned or torn down. Beyond the oil patch, agriculture is a big economic driver in North Dakota. Top agricultural products include wheat, cattle and calves and soybeans.

'I believe in Williston'

Despite all the challenges, many in Williston remain cautiously optimistic. The city has laid out a five-year, $1-billion infrastructure spending plan, including a new $250 million airport. Shawn Wenko, who leads Williston Economic Development, says despite anticipated lower oil revenues, he doesn't expect wholesale changes to development plans. "Do I believe 2016 is going to be a quiet year? Yes," Wenko wrote in an op-ed for the Grand Forks Herald last month. "But he oil and gas industry, as it has always done in the past, is going to recover from this." Wenko says while some projects may be put on hold, he does expect them to be completed. "We are at a crossroads in developing the future of the City of Williston. We can chose to dwell in the now or we can plan for the future," Wenko said. And while construction on apartment complexes and hotels is slowing, developers are shifting focus to the region's more pressing pipeline needs. "Right now, we don't have enough pipeline capacity to put [Bakken crude] in pipes and get it down to Cushing, Oklahoma," a major energy hub, said Patrick McGarry, a property consultant who moved to Williston six years ago. Read MoreThe Big Apple takes a bite out of solar energy

McGarry arrived with plans to build 40 homes. But he's had success helping others navigate the real estate market. He sees a big opportunity in developing the region's infrastructure. This spring, construction is expected to begin on the $3.7 billion Dakota Access Pipeline. The project, headed by a subsidiary of Energy Transfer Partners , received approval from regulators in Iowa on Thursday, ending the last major permitting hurdle for the pipeline. The plan has already been approved in North Dakota, South Dakota and Illinois.

A truck driver holds a supply line while preparing to transload liquid propane from his truck to a rail car at the Red River Supply rail yard in Williston, North Dakota. Daniel Acker | Bloomberg | Getty Images