Members of the interim Senate Appropriations Committee ponder a list of more than 150 spending ideas suggested for the use of $1.07 billion from the American Rescue Plan Act.
Christmann to Coal Counties: Wind Always Wins
ND Public Service Commissioner Randy Christmann said he was once a believer in the all-of-the-above approach to electric power generation, but he told a crowd attending a meeting in Beulah this week that "all of the above doesn't work anymore."
Christmann, who was one of a dozen speakers at the annual meeting of the Coal Conversion Counties Association (CCCA), said all of the above worked when there was surplus electric transmission capacity, but now that the grid is congested, additional power from wind and solar are jeopardizing the economic viability of essential baseload power plants.
In a detailed explanation of the electric markets, Christmann decried the use of the federal production tax credit to support the wind industry. He said rather than subsidizing construction of wind turbines, the PTC distorts markets by paying wind companies only when they generate electricity.
"It wouldn't really be so bad if the wind subsidy, when they build a $3 million turbine, if we just gave them $3 million, and they interact in the market," Christmann said. "But instead we give them a subsidy based on their electric sales."
Christmann said the PTC, which can be as high as $25.00 per megawatt hour, allows wind power companies to sell electricity at very low cost, sometimes even negative prices, and still make money because the companies have no fuel cost. Because of that cost advantage, wind and solar companies can underbid coal-fired plants and other conventional forms of power generation, which means they will always be able to sell their power while coal plants are forced to throttle back production and/or sell electricity at a loss.
Click here to listen to Christmann's comments.
Christmann said building additional electric transmission will not solve the market inequities confronting the coal industry, pointing out that wind farm owners only build transmission to connect to the grid, while tapping into long-haul transmission lines, the costs of which are socialized through regional transmission organizations. He noted that managers of the MISO grid (Midwest Independent System Operator) recently completed a major transmission line project from Ellendale to the Big Stone plant in South Dakota, but the additional capacity it provided was quickly consumed by wind.
"As soon as it was done, we built a whole bunch of wind farms and it's right back where we were before," Christmann said. "As long as the subsidies are as generous as they are, so that all-of-the-above politicians can keep claiming credit for doing this, no matter how much transmission you build, they're going to keep congesting it."
The CCCA includes representatives of the three coal-producing counties - Mercer, McLean and Oliver - and is governed by a board of directors consisting of a city, county and school representative from each of the three counties. The association is a member of the Western Dakota Energy Association, and two CCCA members serve on the WDEA Executive Committee.
Nehring Touts Benefits of Coal Industry
Rep. Dave Nehring said he doesn't refer to wind and solar generation as "renewables," he calls them "intermittents, because that's what they are."
Nehring, who represents District 8 which includes much of McLean County, spoke about the tremendous economic benefits of the lignite industry at this week's annual meeting of the Coal Conversion Counties Association. He referred to a study conducted by ND State University in 2017 that compared employment levels in the energy sector.
"The wind industry at 3,000 megawatts in 2017 had 160 employees, compared to coal's 3,900 for 4,000 megawatts," Nehring said. "That's a lot of disparity, and those jobs are not the same as coal miners and power plant operators. They're significantly less income."
Nehring also encouraged the crowd to be aware of the pitfalls facing the coal industry including the lack of investment capital, increasing costs of insurance, and "utilities that have caved to the ESG movement." The last item is a reference to a trend among large institutional investors to discourage or refuse to invest in the fossil fuel industry. He also pointed out an effort by Minnesota Gov. Tim Walz, current chairman of the Midwest Governors Association, who is orchestrating an effort to abandon the coal industry.
"His number one agenda item as the MGA chair is to put forth an agenda preparing Midwestern communities for power plant closures," Nehring said. "We need to make sure that we're cognizant of what's going on in Minnesota, and the 14 legislators who were here from Minnesota (see photo in October 1 newsletter) is a great first step in making sure that those people realize how important your industry is to North Dakota and the viability of the grid."
Nehring said a recent study presented to the MGA showed that as the percentage of renewables increase within a utility, "costs go skyrocketing," increasing power costs by a factor of 30 or more (at 100% penetration) compared to current prices because utilities would have to overbuild eight times the generating capacity to achieve reliability.
"So we certainly have the opportunity to be optimistic, but we need to keep our guard up," Nehring concluded. "Be vigilant, be engaged, and help our county commissioners in coal country understand what is at risk."
Move Gives Legislature Extra Time
Gov. Doug Burgum issued an executive order today convening a special session of the Legislature on Monday, November 8, to address legislative redistricting, tax relief, infrastructure, workforce, economic development and other priorities.
Burgum made the announcement during a news conference at the Capitol along with House Majority Leader Chet Pollert and Senate Majority Leader Rich Wardner. The announcement follows several weeks of discussion with legislative leaders on the scope of a special session and issues to be addressed, notably the allocation of federal funding from the American Rescue Plan Act (ARPA).
House and Senate appropriators this week approved an ARPA investment plan to submit to the full legislature. Gov. Burgum said he is "about 80 percent" in agreement with the package, and praised legislators for their work.
Click here to listen to Burgum's comments.
If Burgum had not called a special session, lawmakers would have been constitutionally limited to just four days, the amount of time remaining after the 2021 Legislature concluded after 76 days. The governor said the special session will give lawmakers the time and flexibility they need to complete legislative redistricting and make "wise investments that provide a high return for taxpayers without growing government.”
House Majority Leader Chet Pollert said even though the special session gives the legislature more time to complete its work, he said the session will be "efficient but expedited."
Click here to listen to Pollert's comments.
In addition to constitutionally-mandated redistricting, the governor’s executive order calls for the special session to address funding sources for statewide infrastructure and capital projects that were approved by the Legislature last spring, as well as natural gas infrastructure; statewide workforce programs; economic development opportunities; road, water and deferred maintenance needs; and income tax relief.
The state has just over $1 billion in ARPA funds and $113 million in ARPA Coronavirus Capital Projects funds, for a total of $1.12 billion. ARPA allocated a total of $3.2 billion to North Dakota. Approximately $1.85 billion was dedicated to economic impact payments to individuals and program grants to specific entities, while $242 million is going directly to cities and counties.
Click here to watch a Facebook video of the news conference.
Leaders like Pipeline, Workforce Ideas
The ND Legislature’s House and Senate Appropriations Committees agreed this week on spending the latest federal allocation of funds to help states recover from the pandemic.
The package outlines a spending plan for just over $1 billion in funds from the American Recovery Plan Act (ARPA). Among the priorities is an initial $150 million pledge to support construction of a large natural gas pipeline to deliver Bakken gas to eastern North Dakota. The commitment was praised by House Majority Leader Chet Pollert, who said it will allow the state to compete for value-added agriculture projects that are now going to other states.
Click here to listen to Pollert's comments.
During committee discussion earlier this week, Pollert said depending on the construction proposals that the opportunity generates, the state's contribution could go as high as $350 million.
Senate Majority Leader Rich Wardner said he was also pleased with the pipeline proposal, as well as more than $300 million earmarked for highway and bridge construction. Wardner, as a former educator, said he also liked an $80 million allocation to developing career and technical education facilities in North Dakota. He said CTE can prepare students for well-paying jobs with just a year or two of post-secondary training, which is crucial to meeting the state's workforce needs.
Click here to listen to Wardner's comments.
During the course of three weeks of hearings, the appropriations committees considered more than 150 funding requests that totaled more than $9 billion. Click here to see a complete list of the proposals.
Gas to the East Ensures Stability for the West
Western North Dakota legislators, along with city and county leaders, participated in an informational session today to learn more about a state proposal to support a large natural gas pipeline to eastern North Dakota.
The combination in-person and virtual event was hosted by the Western Dakota Energy Association, and featured presentations by top state officials engaged in energy and economic development.
Legislative committees this week recommended the full legislature allocate $150 million to improve the economics of constructing a pipeline capable of transporting 250 million cubic feet or more gas per day from the Bakken, across the northern tier, to Grand Forks and Fargo. ND Pipeline Authority Director Justin Kringstad explained the need for capacity to move more gas out of the oilpatch. Kringstad said at its current rate of increase, natural gas production in North Dakota will exceed takeaway capacity in the next three years. He said the future need is greater than just one pipeline can handle, but companies are conservative and will conduct an "open season" to determine the size of the market.
Click here to listen to Kringstad's comments.
It's estimated the cost of a major pipeline to eastern North Dakota would be around $1 billion. At that price, Kringstad said the pipeline company would have to charge transportation rates that are not competitive with other takeaway options, but if the state pitches in, the economics would improve.
Click here to listen to Kringstad's comments.
Kringstad said if additional gas takeaway capacity is not developed, oil producers will be forced to reduce production. But he said a 250 million cubic foot pipeline would allow an additional 100,000 barrels of oil production per day. That would translate into additional tax revenue approaching $200 million per year, so the state and local units of government would see a rapid return on the investment.
Some western leaders expressed concern that delivering additional gas to eastern ND would allow it to compete with the west for value-added energy projects. But Lynn Helms, director of the Department of Mineral Resources, said gas liquids, which would stay in the west, combined with western ND geology (map of potential salt caverns), would mean those projects could only be developed in the west.
Click here to listen to Helms' comments.
James Leiman, director of the Department of Commerce, said there are very real opportunities for development of a multi-billion dollar petrochemical industry in North Dakota. But surprisingly, he said until state officials met with leading pet-chem industries in Alberta a few years ago, they were unaware of the potential in North Dakota.
Click here to listen to Leiman's comments.
Leiman said establishment of a petro-chemical plant could lead to development of many other types of value added energy and manufacturing facilities in the state.
Click here to listen to Leiman's comments.
The legislature will meet in special session beginning November 8 to consider support for the pipeline, along with other potential uses for federal pandemic relief funds.
RTO Could Be Short of Power Capacity
The regional transmission organization (RTO) serving much of North Dakota said this week an emergency declaration is likely in January if harsh weather collides with unforeseen generation outages.
J.T. Smith, Senior Director of Operations Planning for MISO, said the organization expects to use load-modifying resources, which require a maximum generation declaration, this winter.
“It’s not a one-out-of-50 scenario. There’s a number of scenarios that put us there,” Smith told stakeholders during a virtual winter readiness workshop Tuesday.
MISO’s Tim Bachus said the RTO should have enough generation capacity if the coming winter is in line with historical averages. Under normal circumstances, the grid operator predicts it will have 105 GW of capacity to cover a 94-GW peak in December; 106 GW to handle a 101-GW peak in January; and 108 GW to manage a 95-GW peak in February.
However, MISO said it could find itself a gigawatt short of non-emergency resources in January if weather conditions drive load to 107 GW. If high generation outages are paired with that load, not even an emergency declaration and 11 GW of load reduction could cover demand, staff said. In a worst-case scenario, MISO could experience 107 GW of demand in January and have just 88 GW in non-emergency resources available. The grid operator’s all-time winter peak of 109 GW occurred in January 2014.
Smith said MISO will increase efforts this winter to reach out to generation operators to understand their fuel procurement status and weatherization preparedness before harsh weather hits. He said higher natural gas prices this year will likely force some resource owners to procure coal instead of gas.
Source: RTO Insider (subscription required)
Delegation Opposes Biden Energy Policies
Republican Congressional leaders spoke out this week in opposition to the Biden Administration's anti-fossil fuel energy policies.
Congressman Kelly Armstrong joined Republican Whip Steve Scalise (R-LA), House Republican Conference Chair Elise Stefanik (R-NY), and other House members for a news conference on Tuesday.
"We have notice from two of our utilities that people are going to pay upwards of $150 to $200 more for their energy costs this winter. When you say you are not taxing anybody who makes under $400,000 per year, people who are paying $200 more to heat their home in North Dakota in the winter will disagree with you," Armstrong said. "We are creating a policy that makes energy more expensive and puts us in a bad competition space on the world stage. And on top of that, we are moving towards these unrealistic climate goals that simply cannot be attained in the time in which they say they do."
Watch Armstong's full remarks here.
On Wednesday, 16 Senate Republicans, including Senator John Hoeven and Senator Kevin Cramer, spoke out as well.
"(North Dakota) produces an incredible amount of energy from both traditional and renewable sources," said Senator Hoeven. "However, we are seeing almost a half a million barrels less of light, sweet crude production in our state, and it's the policies of this administration and the Democrats that are impacting our ability to produce more energy here at home. When our energy production goes down, this administration asks our adversaries, like Russia and OPEC for more energy. That defies common sense, and it doesn't serve the American people."
Listen to Hoeven's full remarks here.
Senator Cramer hinted at a Republican Energy Plan in the works in response to Biden's destructive policies, saying, "We have a better plan... we are going to be outlining some things going forward. I think it is important to have solutions to the problems."
Listen to Cramer's full remarks here.
The delegation highlighted its strong opposition to new EPA regulations, the federal oil and gas leasing moratorium, and contingencies in the contentious Build Back Better Reconciliation bill that both chambers have been fighting over for several weeks. In its current form the bill includes $1.75 trillion in social and "climate action" spending.
The Only One of Its Kind in the World
University of North Dakota officials held a grand opening and dedication last week for one of the largest oil drilling simulators in the world.
The test rig, located in UND's Drilling and Completion Laboratory (DRACOLA), gives petroleum engineering students a hands-on opportunity to simulate drilling operations in the Bakken.
“This $40 million experimental facility doesn’t exist anywhere else in the world,” said Vamegh Rasouli, Professor of Petroleum Engineering and department chair. Rasouli said UND’s petroleum engineering Ph.D. program is now among the top three in terms of student numbers in the United States.
Using real-world drill bits and drill string, the test rig drills into rock simulating real-world conditions of 16,000 psi. UND hopes to make the simulator available to companies' new workers and plans to create a 30-day training course to give workers a glimpse of what they will experience in the field.
“This facility is an important part of our efforts to align our activities with the needs of North Dakota and this region,” said Brian Tande, dean of the College of Engineering & Mines. “DRACOLA will offer unique research and training capabilities to the oil and gas industry in the state, allowing them to increase production and operate more efficiently.”
The simulator was funded by a $2.78 million grant from the ND Industrial Commission and assembly started last year, giving students a first look at how a drilling rig is built. The test rig is currently a few parts away from completion.
Read more about the simulator here.
Publication Full of ND Information
Secretary of State Al Jaeger this week unveiled the 34th edition of the North Dakota Blue Book, a publication that profiles the state’s current status, and compiles statistical and historical information.
Jaeger presented a ceremonial first copy of the new edition to Gov. Doug Burgum, who called the book "a treasure trove" of information about the state. The first volume carrying the title North Dakota Blue Book appeared in 1942. Subsequent publications required legislative authorization and appropriation until 1995, when Jaeger began publishing the Blue Book using funds appropriated to his office.
Each edition of the North Dakota Blue Book includes items such as:
• Facts about the state's origin, symbols, statues, monuments, the Capitol and vital statistics.
• The Executive branch of government, containing a chronology of elected officials and their duties
• The Legislative branch, including legislative process and bills introduced and passed by the legislature.
• A chronology of North Dakota’s federal elected officials.
• The Judicial branch of government, including information on the court system and judicial officers.
• The relationship between Native American tribes and the state.
• Information on elections in the state, including initiating and referring laws.
• Education in the state, including K-12 school data and a listing of universities and colleges.
• Energy resources, including oil and gas, coal and wind resources.
• Agricultural information, including top exporting crops and crop producing counties.
• Natural resources, including weather information and water resources.
Other chapters highlight the 100th anniversary of the ND Mill, presidential visits to North Dakota, programs that strengthen student literacy, the state’s pandemic response, and adding value to the state’s energy resources.
The 556-page softcover book is being sold for $20.00 at the ND Heritage Center’s museum store, and can also be ordered through the store’s online site.
Legislation Could Deliver Economic Benefits
The ND Department of Transportation is seeking help to carry out a directive from the 2021 Legislature to study the impact of longer trucks on North Dakota roadways.
Applications to gather input on potential routes and truck configurations for the SB 2026 Long Combination Vehicle (LCV) pilot study are being solicited from the transportation industry. The deadline for submitting applications is November 30.
A long combination vehicle is a tractor-trailer combination with two or more trailers. The NDDOT is considering truck cargo carrying lengths of up to approximately 130 feet. Currently, the longest cargo carrying length allowed for multiple trailer loads is 100 feet. The department has been working with an advisory committee made up of state agencies and motor carrier interest groups to develop a strategy for advancing the pilot study.
“This is a great opportunity to work with our transportation partners and learn more about the long combination vehicle impact on the state highway system,” said Mike Kisse, Maintenance Assistant Division Engineer. “This legislation has the potential to benefit the North Dakota economy and the pilot program will collect data to help policy and decision makers determine the long-term feasibility of the new truck configurations.”
The Upper Great Plains Transportation Institute is assisting NDDOT with the study and will document public safety, economic and infrastructure impacts as longer, and potentially heavier trucks may affect bridges and intersections differently than traditional loads.
Click here for more information about the LCV pilot study.
Cities, Counties, Schools Urged to Apply
The ND Department of Environmental Quality is accepting applications for its FY 2021 State Clean Diesel Grant Program.
Schools, cities, counties, and other government agencies that require larger, diesel-powered vehicles are encouraged to apply for the grant awards. DEQ will issue $337,000 in awards funded by the U.S. Environmental Protection Agency to purchase new or newer, diesel-powered, zero-emission, hybrid, or alternatively fueled vehicles.
The purpose of the funding is to reduce diesel emissions in accordance with the Diesel Emissions Reduction Act of the Energy Policy Act of 2010. To date, 102 older vehicles in North Dakota have been replaced using this funding, with a reduction in air emissions of about 200 tons over the lifetime of those vehicles.
Click here to see the application and program guidelines. Applications can be mailed to the Division of Air Quality, 4201 Normandy Street, Bismarck, ND 58503-1324 or emailed to email@example.com. The application deadline is November 30.
Slides from Oct. 13-14 Event in Williston
Attendees of the October 13-14 annual meeting of the Western Dakota Energy Association heard presentations from more than two dozen speakers, as well as engaging panel discussions on oilfield transportation, TENORM disposal and education/workforce needs.
PDF versions of the presentations can be downloaded from WDEA's website.
Oil & Gas Production Review, County-by-County results – Lynn Helms, Dept. of Mineral Resources
The Hydrogen Economy – Chad Wocken, EERC
Wise Roads – Road Evaluations and Closures: Look How Far We’ve Come – Curt Glasoe, NDLTAP
Wise Roads Project – Current Status and Future Enhancements - Jonathan Rosencrans, NDAWN
GRIT – New tools for Industry to Use to Evaluate Roadway Conditions – Leanna Emmer, NDLTAP
LoadPass Permits Expansion and System Enhancements – Joelle VanderLinden and Brent Bogar
TENORM History and Solutions – Williams County Panel
Theodore Roosevelt Expressway Association - Cal Klewin
America’s Rural Energy Coalition – Senator Brad Bekkedahl
North Bakken Expansion Project – Mark Anderson, WBI Energy
ONEOK Investments: Past, Present and Future – Dick Vande Bossche
Bakken Area Skill Center - Steve Holen, McKenzie County School Superintendent
Williston State College, Workforce Solutions – Dr. Bernell Hirning, WSC President
Redistricting in the West - Senator Rich Wardner
Electric Markets, Where Are We Headed? – John Weeda, ND Transmission Authority
- Project Tundra: Minnkota forging the CCS frontier -- American Coal Council
- Washington energy policies add to supply, demand issues -- Minot Daily News
- BLM opens comment period for 1Q 2022 leases sale in ND and Montana -- BLM
- Biosurfactant proving to be a game-changer for Bakken operators -- Williston Herald
- Crestwood acquires Oasis Midstream, Oasis closes on QEP assets -- Williston Herald
- Red Trail Energy second ethanol plant to implement carbon capture -- Devil's Lake Journal
- ND Legacy Fund program makes major investment; amount not divulged -- Bismarck Tribune
- Missouri to appeal ruling in favor of Central North Dakota Water Supply project -- Bismarck Tribune
- NW Landowners: Taxpayers left 'holding the bag' by abandoned well program -- Williston Herald
- Frustration looms over North Dakota Legacy Fund in-state investment mandates -- Bismarck Tribune
- DMR proposes using ARPA to map out carbon dioxide corridors -- Williston Herald
- State awards $1.7 million in Outdoor Heritage Fund grants -- Bismarck Tribune
- Tioga wins $100,000 grant to start a free UAS training program for adults -- Williston Herald
- Meetings set for Theodore Roosevelt National Park site planning -- Bismarck Tribune
- After the Whistle: Oil industry adds challenges to Watford City athletic programs -- KX News
- Little Missouri River bridge project in Billings Co. still a possibility -- Bismarck Tribune
- David Grubb presented with community service award -- Tioga Tribune
- Unmanned aircraft systems provides limitless possibilities -- McKenzie County Farmer
- DSU nursing program receives $100,000 donation; largest in program history -- Dickinson Press
- Job Service discusses staffing in the region at Coffee and Conversations -- Williston Herald
- Killdeer on pace for new school; completion slated July 2022 -- Dickinson Press
- School Superintendent Thake placed on administrative leave -- Williston Herald
- WEA votes no confidence in board president, asks for immediate resignation -- Williston Herald
- Board member Chris Jundt releases statement, "strongly refuses" to step down -- Williston Herald
- School food supply challenges in Divide County schools -- Crosby Journal
- North Dakota State College of Science appoints interim president -- Dickinson Press
- Xcel wants to raise Minnesota electric bills 20%, "leading clean energy transition" -- Star-Tribune
- Xcel Energy releases 3rd quarter earnings report, $603 million, $1.13/share -- Xcel Energy
- India rejects calls for net zero carbon emissions target -- The Hill
- Antarctica's last six months were the coldest on record, Sept. average 77.6 below zero -- CNN
- Aramco CEO: Underinvestment in oil is a "huge concern," crude supply dwindling -- OilPrice.com
- G20 leaders to tackle energy prices, other economic woes -- Associated Press
- Oil giants deny spreading disinformation on climate change -- Associated Press
- Residential propane prices start winter heating season at highest level since 2011 -- EIA
- How the distorted climate conversation is hurting the quest for effective energy -- The Federalist
Factoid of the Week
Source: CO2 Science
October 29, 2021
WTI Crude: $83.57
Brent Crude: $84.38
Natural Gas: $5.43
North Dakota Active Oil Rigs: 31 (Up 2) 10/29/2020 -- 12 rigs