On the heels of a bonding plan offered by Gov. Doug Burgum in his budget address to the legislature, North Dakota's Senate Majority Leader pitched his own $1 billion proposal to the Executive Committee of the Western Dakota Energy Association this week.

Senator Rich Wardner's plan has many similarities to the governor's plan (see article in December 4 WDEA newsletter), foremost of which is that they would rely on revenue from Legacy Fund earnings to support the bond issue. The 2021 Legislature will be forced to deal with a $700 million gap in the state general fund in the coming biennium, so some may question a plan that would spend additional money on infrastructure projects. But Wardner said the bonding plan is workable and could take pressure off the general fund and individual property taxpayers.

Click here to listen to Wardner's comments.

Wardner's proposal would dedicate $295 million to major water and flood control projects in Minot and the Red River Valley. He said the state has already made commitments to fund the projects, which are now drawing from the Resources Trust Fund. Wardner said by funding them through bonding instead, it would free up dollars in the trust fund for other projects including the Western Area Water Supply Authority, which has had financial struggles throughout its history.

Click here to listen to Wardner's comments.

The senator's bonding plan also includes $50 million aimed at supporting efforts to develop a method to capture carbon dioxide from the emission stream of the state's coal-fired power plants. Wardner said a successful CO2 capture program would ensure the long term viability of the state's coal fleet.

Click here to listen to Wardner's comments.

Wardner's plan also devotes funds to expand low interest revolving loan funds, to road and bridge work, workforce training and career tech programs, ag research facilities, higher education projects and an infusion of infrastructure funds for non-oil communities to replace Operation Prairie Dog revenue lost due to low oil prices.

Click here to see Senator Wardner's slide presentation. The 2021 Legislature convenes January 5.

The legality of a program authorized by the North Dakota Legislature's Budget Section that has created hundreds of jobs for unemployed oilfield workers has been challenged by two fringe activist groups.

The Dakota Resource Council and North Dakotans for Public Integrity sent a letter this week to the Industrial Commission regarding the use of $16 million in CARES Act funds for a well-completion incentive program, which they argue violates the ND Constitution’s anti-gift clause. The program, approved by the Budget Section in October (see article in Oct. 30 newsletter), uses funds from the federal CARES Act to encourage fracking and completion of DUC wells (drilled but uncompleted). It provides up to $200,000 to offset the cost of the water that is used in the hydraulic fracturing process to bring the wells into production, or to dispose of produced water as part of the completion process.

Gov. Doug Burgum, who chairs the Industrial Commission, took issue with the claim that the incentive was a gift. Burgum quipped that "I guess we could have just put more into the unemployment fund, and paid them out that way as opposed to actually doing something constructive and productive."

Click here to listen to Burgum's comments.

In addition to making a legal argument, the letter seeks the names of businesses that receive the grants and how the awards are determined. The groups alleged that the grants benefit large oil companies, but Lynn Helms, director of the Department of Mineral Resources, said the funds pass through oil companies and directly benefit small companies which he said were "ecstatic" about the program.

Click here to listen to Helms' comments.

Helms said his department has received 97 applications for the program, but will only be able to fund 80, which he said creates competition in the industry to complete wells quickly. He said it has resulted in the addition of at least four frac crews, directly creating 400 hundred jobs, which he estimated produced another 400 jobs among companies that support the fracking operations. He said the program was “carefully vetted” to ensure its compliance with the CARES Act.

Helms said each new well completion will generate an average of $1.6 million in production and extraction taxes, $150,000 in sales tax revenue, $1.1 million in salaries, and $2.4 million in royalties. It's hoped the program will help stabilize crude oil production well into 2021, which was otherwise expected to decline due to low oil prices. 

Average daily crude oil production in North Dakota in the month of October was nearly identical to the September figure, dropping by just a couple hundred barrels a day.

Lynn Helms, director of the Department of Mineral Resources, said production was down just 236 barrels a day, averaging 1,222,871 barrels/day in October. Production has been steadily recovering after bottoming out around 858,000 bbl/day in May as producers brought more wells back into production following the sharp oil price drop early in the year. But Helms said the leveling off is an indication most financially viable wells have now been re-started.

Click here to listen to Helms' comments.

Helms said natural gas production was up two percent in October, gaining an average of an additional 70 million cubic feet per day, which he said is expected as oil wells are depleted. Despite the increased production, Helms said gas capture remained almost steady, with producers capturing and processing 93 percent of the gas produced, or about 2.66 billion cubic feet per day.

North Dakota producers realized an average price of $30.15 per barrel in October. That figure had climbed to $37.25/barrel this week.

The pace of a program that is using federal COVID-19 relief funds to plug and reclaim abandoned oil wells in North Dakota has been slowed by a combination of approaching winter weather and some difficult wells to plug.

DMR Director Lynn Helms said crews on workover rigs have encountered four wells that cost more than $250,000 to plug, with one well costing more than $525,000 to secure. Helms, who provided an update to the ND Industrial Commission at its meeting this week, said the problem wells have caused the work to slow down as crews direct their attention to the more difficult work.

Click here to listen to Helms' comments.

Helms said associated reclamation work on abandoned well pads and production facilities is also winding down as winter weather sets in. He said some of those  projects have also been quite expensive. Helms noted a project on US Forest Service land in McKenzie County that will have a price tag of $1.2 million to complete.

Click here to listen to Helms' comments.

Helms said an oilfield treating plant that poses a unique problem is also on the reclamation list. He said during its operation, someone had accepted cement for disposal and the site contains six 400-barrel frac tanks filled with cement. He said he expects the $33 million in CARES Act funding devoted to the plugging program and the $17 million for the reclamation program will be fully utilized by the December 30 deadline to spend the federal dollars. 

The garment-making company The North Face is "facing" a loosely-organized oil industry boycott following news last week that it refused an order from a Houston-based oilfield service company to purchase logo jackets for its employees. 

Innovex Downhole Solutions CEO Adam Anderson went public after The North Face rejected an order for 400 jackets with the Innovex logo because, as Anderson says, “we were an oil-and-gas services company.” Ironically, the vast majority of apparel made by The North Face, which is part of the VF Corporation, is made with nylon, polyester and polyurethane, all of which come from petroleum.

Many in the oil industry have taken offense to The North Face virtue signaling, and the backlash has gone viral in social media. One Twitter user who works in the Marcellus Shale region proposed a new version of the company's logo that better reflects its dependence on petroleum products.

In another example, a LinkedIn post by Jeff Roach, president of Houston International Equipment, reached thousands of people in a matter of hours. Roach wrote that "...oil and gas is being criminalized, when WE are the people that produce the product that 'fuels' the global economy." Roach, who was interviewed by Jason Spiess for The Crude Life, suggested the industry consider a boycott, noting that "we're too busy working to rally and protest, but we can make an impact with our money."

Click here to listen to Roach's comments.

Roach said although he has a lot of social media connections, he's not known for taking a stand. But he said after the action by The North Face, he felt it was "time to send a clear message."

Click here to listen to Roach's comments.

With the exception of gasoline stations, there aren't many industries more dependent on petroleum than outdoor recreation and the many products made from plastic, nylon, vinyl and other petrochemical products. The company has not specifically denied that it rejected the order because the customer was affiliated with the oil and gas industry, according to Snopes, the fact-checking website. Rather, The North Face issued a statement about its company policy. 

"As the world’s largest outdoor apparel brand, The North Face recognizes our responsibility to be positive stewards of the earth’s resources and to protect the environment," said Samantha Wannemacher, senior manager of corporate communications for The North Face. "We investigate product requests to ensure they align closely with our goals and commitments surrounding sustainability and environmental protection."

Click here and advance to the 6:50 mark to listen to The Crude Life interview with Jeff Roach. Click here to read an article about The North Face decision in the Washington Times.

President-elect Joe Biden has proposed a ban on oil and natural gas development on public lands, and, if implemented, would severely harm the economies of eight western states including North Dakota. That's the bottom-line of a Wyoming Energy Authority study conducted by University of Wyoming Professor Tim Considine announced jointly this week by the North Dakota Petroleum Council and the Western Energy Alliance. 

North Dakota ranks second in oil production and fifth in natural gas production on public lands. The study says a drilling ban would be financially disastrous with significant human costs along with a devastating impact on future tax collections. In North Dakota between 2021 and 2024, a leasing moratorium and a ban on new drilling permits on public lands in the state would eliminate:

• 3,924 jobs on average each year,
• $1.4 billion in oil and natural gas investments, 
• Oil and gas production valued at $2.4 billion,
• $822 million in tax revenue to North Dakota,
• $2.9 billion in GDP, and
• $1.1 billion in wages. 

“I cannot underestimate the devastating impacts a federal leasing or fracking ban would have on our industry, private land and mineral owners, and the entire state economy in North Dakota,” said Ron Ness, President of the ND Petroleum Council. 

"The state has a checkerboard of mineral ownership resulting in private, state, tribal and federal minerals often within the same spacing unit," Ness continued. "Even the smallest federal mineral interest requires operators to seek federal permits and approvals. This gives the federal government a lot of control over oil and gas development in North Dakota."

Ness said efforts to ban federal leasing will not only harm the economy and subsequently the people of North Dakota, it would also restrict private land and mineral owners from exercising their right to develop their property.

The report analyzes the economic impacts of two possible scenarios -- a leasing moratorium and a ban on approving drilling permits. Click here for the full report. Click here for the news release from the NDPC and Western Energy Alliance. 

The COVID-19 pandemic forced the Lignite Energy Council to cancel its annual Teacher's Seminar this past year, but that didn't stop the LEC from expanding its efforts to teach adults and kids about the importance of the coal industry.

Kay LaCoe, Director of Membership Marketing, said the LEC launched a new website called Lignite Learn. LaCoe, who was interviewed this week on the radio program Energy Matters, said the site offers different sections that explore different aspects of the industry.

Click here to listen to LaCoe's comments.

LaCoe said the site's four sections are Cookie Mining, Electric Transmission, Playdough Core Sampling, and her personal favorite is Megawatt Mansion, in which a family finds a great bargain on a vacation spot, only to find out they are billed for everything that uses electricity.

Click here to listen to LaCoe's comments.

LaCoe said the website has a section that provides instructional information for educators and others, to help them teach the information to children even though they may not know much themselves about the topic.

Click here to listen to LaCoe's comments.

Click here to check out the Lignite Learn website. Click here and advance to the 20:30 mark to listen to the full Energy Matters interview with Kay LaCoe.

The Western Dakota Energy Association launched a redesigned website earlier this month that will offer more functionality to WDEA members and visitors to the site at www.ndenergy.org.

WDEA has also implemented a subtle change to its weekly newsletter that allows readers to share a single article on social media, rather than linking to the full issue of the newsletter.

"We work every week to bring our members and readers the most timely energy-related stories that affect communities and businesses in western North Dakota," said WDEA Executive Director Geoff Simon. "The changes we made are aimed at allowing everyone more options to share the news with their friends and associates."

The weekly newsletter now includes icons with each article that allow readers to share the story via Facebook, Twitter, LinkedIn or email. The same options are available to users who read the newsletter on the website.

The website, designed by DAWA Solutions Group of Williston, offers several new items including a box that shows current weather conditions at one of the more than 30 Wise Roads weather stations scattered throughout western North Dakota. The site also has a new Issues section with topics of great importance to WDEA members. More issue papers and links will be added to the site as new developments occur in North Dakota's energy sector. The site also includes an expanded Resources Library that will also be expanded as new documents and other sources of information are produced.

With Christmas falling on a Friday this year, the regular WDEA weekly newsletter will not be published next week so that staff may celebrate the holiday and enjoy time with their families.

WDEA will publish a "2020 Year-in Review" issue of the newsletter on January 1. The issue will feature a re-cap of the Top 10 stories of the past year, as well as a preview of the major issues we expect in the 2021 Legislature.

The board members and staff of WDEA and LoadPass Permits would like to wish everyone a Blessed Christmas and a Happy New Year.

All driver licenses which expired after March 1 are due for renewal by Dec. 31. This aligns with Gov. Burgum’s executive order which extended certain expiration dates due to the COVID-19 pandemic. Licenses not renewed by year end will be considered invalid. 

“Our Driver License Division has been working very hard over the past several months to process license renewals, but we still have work to do,” said Robin Rehborg, NDDOT Deputy Director for Driver Safety. “Today there are more than 12,000 driver licenses that need to be renewed by the December 31 deadline."

Driver's who have expired licenses are urged to schedule an appointment now to ensure they can renew on time. The NDDOT continues to provide driver license services by appointment only. No walk-in services are available. Customers can schedule an appointment ahead of time by visiting the NDDOT website to complete an online request or call 1-855-633-6835.

For safety reasons, only the customer scheduled for the appointment may enter the building. Customers are required to participate in a temperature check and health screening. Masks are required for the safety of the customer and NDDOT employees.

Some driver's license services such as change of address, renewals and replacements are available online.

With the current coronavirus outbreak colliding with the Christmas holiday, life may be difficult for many people who may be feeling anxious, stressed or depressed due to forced separation from families. 

Project Renew is available to help by offering free support services to those who may be experiencing these natural feelings in the wake of the coronavirus pandemic. Brief support services, free and anonymous to all North Dakotans, are being provided by Lutheran Social Services. Individuals experiencing intense difficulty, distress or trouble, may call 701-223-1510 to talk to a trained counselor.

Project Renew is a Crisis Counseling Assistance and Training Program (CCP) funded by the Federal Emergency Management Agency. The CCP is a short-term disaster relief grant for states, U.S. territories and federally recognized tribes. 

For more information on Project Renew, click here.