Committee Okays Gas Storage Bill
Legislation Offers Economic Opportunity

After nine meetings of a subcommittee formed to work out disagreements, the full House Energy and Natural Resources Committee yesterday voted 13-1 to approve what has proven to be the most contentious oil and gas issue of the 2021 legislative session.

SB 2065 is intended to establish a regulatory framework for underground gas storage, providing both a permitting process for the industry and a system of compensation for landowners. Three forms of natural gas and gas liquids storage are addressed in the legislation - depleted oil and gas reservoirs, saline aquifers and manmade salt caverns. 

The Energy and Environmental Research Center has determined through research that creation of salt caverns is technically feasible in North Dakota. EERC CEO Charlie Gorecki told the committee underground gas storage options provide multiple benefits to industry, and will open the door to value-added energy development opportunities.

Click here to listen to Gorecki's comments.

Bismarck Rep. George Keiser, who chaired the subcommittee, said with many different interests involved in an underground gas storage project, it's difficult to come up with a solution on which everyone can agree.

Click here to listen to Keiser's comments.

The subcommittee reviewed multiple amendments to the bill, before coming to agreement on "version 2007." The other leading contender was version 2010, the key difference of which was a section that would give landowners the right to a jury trial if they felt they were unfairly compensated.

Dickinson Rep. Mike Lefor said the legislation is crafted in a way that a significant majority of landowners have to agree on whatever compensation is provided, and protects the rights of anyone in the minority who disagrees.

Click here to listen to Lefor's comments.

Watford City Rep. Denton Zubke supported the compromise legislation. Zubke said it's important to protect the rights of those not satisfied with compensation that is offered, but said it's equally important to support the majority who want to move forward with a project.

Click here to listen to Zubke's comments.

The amendment to the legislation will be considered on the House floor on Monday. Action on the bill itself could occur as early as Tuesday. Click here to see links to the lengthy list of testimony and bill drafts that were submitted. Click here for links to recorded videos of the committee and subcommittee meetings.

WRED Endorses Action on SB 2065
Bill Would Promote Economic Diversity

Western Region Economic Development, which represents economic development organizations in Divide, McKenzie, Mountrail and Williams Counties, issued a statement today in support of the amended version of SB 2065.

WRED, which communicated its support in an email to western ND legislators, said the bill sets policy that will allow the ND Industrial Commission to regulate the permitting of pore space providing access to mineral and water deposits. The group notes that not only would this allow for the underground storage of oil, natural gas, and other byproducts that could later be retrieved, but it also provides the potential for mining of huge salt caverns as well as other elements and access to saline and aquifers.

The economic development professionals believe increased access to gas storage could increase production, as well as enhance the region's economic diversity by allowing byproducts to be used from depleted wells. WRED also supports language that requires that companies contract with a greater than majority (60%) of the owners in return for adequate rental payments, and that non-consenting owners will have the means to contest and will not be held liable. 

Click here to read the WRED news release.

Fire Threatens Historic Medora
Musical's Amphitheater Spared

Flames from a wildfire in the Badlands surrounding Medora threatened the historic community and the Burning Hills Amphitheatre, but an all-out effort by firefighters prevented any serious damage.

The fire is believed to have been sparked by a downed powerline, and is estimated to have burned about 3,000 acres of grass and brush in the rugged hills around Medora. The community was evacuated as a precautionary measure, but Randy Hatzenbuhler, President of the Theordore Roosevelt Medora Foundation, said the town and properties associated with the Medora Musical were not damaged.

Click here to listen to Hatzenbuhler's comments.

Hatzenbuhler, who was interviewed this morning on the radio program What's on Your Mind, said the fire burned very close to the amphitheatre, but will have no impact on plans for this summer's musical. 

Click here to listen to Hatzenbuhler's comments.

Hatzenbuhler said more than a hundred firefighters from Billings County and the surrounding area converged on the blaze. He said the suppression effort was also aided by National Guard helicopters dispatched to the fire by Governor Doug Burgum.

Click here to listen to Hatzenbuhler's comments.

The public is being asked to stay away from the area temporarily, and use caution if passing through due to smoke reducing visibility on roadways, including Interstate 94, which was temporarily closed by the ND Department of Transportation.

Click here to read an article about the fire in the Dickinson Press. Click here and advance to the 6:25 mark to listen to the full What's on Your Mind interview with Hatzenbuhler.

Richardton Fire Burns 880 Acres
Livestock Lost in Intense Blaze

A wildfire driven by 50 mph winds burned 880 acres north of Richardton Monday. The blaze swept through rancher Neil Hauck's calving corral, resulting in the death of several animals.

Richardton Fire Chief Jason Kostelecky said nine fire departments from the area responded to help put out the blaze, and were aided by neighboring farmers who disked a field to create a firebreak. Kostelecky said the fire was also slowed when it reached a harvested corn field.

Like the Medora blaze, the grass fire was blamed on a downed power line. A high wind warning was in effect at the time of the fire, with peak gusts topping 70 mph. The rapidly-spreading fire emphasizes the need for extreme caution in the current dry conditions, with the fire danger index climbing into the extreme category any time the wind picks up.

Governor Burgum issued an executive order yesterday declaring a statewide fire emergency.

Click here read a Bismarck Tribune article about the Richardton fire. Click here to see a KFYR-TV story with the Hauck family.

Half of State in Extreme Drought
Conditions Make Fire a Huge Threat

Another week without moisture has caused drought conditions to worsen in North Dakota, with roughly half the state now listed in the extreme category.

The weekly Drought Monitor shows the entire state is experiencing drought conditions, and most of the western half of the state falls into the extreme category. The immediate concern is the high risk of wildfires in windy conditions, but as planting season arrives, concern in the agricultural community is beginning to mount. 

With another dry week behind us and another dry week ahead, extreme drought conditions are spreading in western North Dakota. Statistical data from the National Weather Services indicates the past six months have been the driest ever in North Dakota since record-keeping began in 1895. Effects of drought in the extreme category include:

- Crops stop growing; pastures go dormant,
- Emergency haying of conservation areas is authorized
- Blue-green algae blooms cause cattle death
- Large wildfires can burn out of control

Click here to read an article about the drought from Tri-State Livestock News.

Loan Pool Added to Bonding Bill
$250 Million for Clean Sustainable Energy

It's almost certain that the 2021 ND Legislature will pass a bonding bill that will leverage current low interest rates to finance major infrastructure projects, but just what ends up in the bill is anything but certain.

The Senate Finance and Taxation Committee approved an amendment to HB 1431 offered by Committee Chair Jessica Bell of Beulah that restores many of the items the House had removed from the original bill. Senator Bell's amendment also added a new item - $250 million to establish a revolving loan fund to support clean, sustainable energy projects.

The loan pool would be geared toward high-tech energy projects such as those aimed at capturing carbon dioxide emissions for coal-fired power plants. Direction for use of the loan funds would be guided by a Clean Sustainable Energy Authority that would be established by the passage of HB 1452, which is scheduled for a hearing Monday in the Senate Appropriations Committee.

Whether the $250 million remains in the bonding bill is questionable. In his pitch to the Senate Appropriations Committee yesterday, Senate Majority Leader Rich Wardner said the funding may instead come from the Budget Stabilization Fund. Wardner also described for the committee the items that were restored by Bell's amendment, including $60 million to the department of career and technical education; $30 million to the township highway aid fund; $10 million to the state park fund; $4 million to Dickinson State University for a Pulver hall project, a meat processing laboratory remodel, a digitization project, and other projects; and $4 million to the University of North Dakota for its unmanned aerial systems project and technical programs associated with it.

Repayment of any bonds issued if the bill becomes law would come from earnings from the state Legacy Fund. A separate bill, HB 1380, known as the "streams bill," would establish categories for future uses of Legacy Fund earnings, including the bond payment.

Bekkedahl Wants Stream for Western ND
Legacy Legislation Focuses Too Much on East

In a self-admitted "vent" yesterday, Williston Senator Brad Bekkedahl said he is frustrated that much of the focus of Legacy Fund earnings investments are directed to eastern North Dakota, when all the money that supports the fund were generated in the west.

Bekkedahl's remarks came at the conclusion of testimony on HB 1380, the so-called "streams bill" that would earmark future Legacy Fund earnings to various categories of proposed spending. Among provisions in the bill that irk Bekkedahl is an economic diversification research fund, which is supported by a group called the Valley Prosperity Partnership.  Money from the fund would provide grants to institutions under the control of the state board of higher education for economic diversification research, up to 90 percent of which could go to UND or NDSU. Bekkedahl said he would like to see the legislation help diversify the economy of western North Dakota to smooth the boom and bust cycles associated with oil and gas production.

Click here to listen to Bekkedahl's comments.

Bekkedahl said he may offer an amendment to the bill that would direct five percent of Legacy Fund earnings to a Resources Enhancement and Economic Diversification Fund. He said the fund would be administered by the Commerce Department working with local economic development groups to promote, incentivize and assist in funding projects that enhance employment opportunities and diversity the workforce in oil-producing counties. Bekkedahl's proposal would also include formation of an advisory board made up of the impacted communities to work with Commerce to identify economic opportunities.

Committee Okays Reliability Measure
"Qualitative Benefits" of Power Considered

The North Dakota House of Representatives will consider a bill next week aimed at promoting electric reliability that was watered down in the Senate, but had some muscle put back in it this week by the House Energy and Natural Resources Committee.

SB 2313 as amended in committee will allow the ND Public Service Commission to examine the "qualitative benefits" of generation assets owned by investor-owned utilities. Bismarck Rep. Glenn Bosch, who chaired a subcommittee appointed to work out disagreement between the PSC and utilities, said the new language allows the commission to assign a higher value to baseload plants that provide 24/7 power.

Click here to listen to Bosch's comments.

Another section of the amendment offered by the PSC would allow financial penalties to be imposed on a utility that fails to meet its obligation to provide reliable service. Commissioners wanted the penalty provision to be as strong as possible, but utilities opposed it. Bosch said the middle ground arrived upon by the subcommittee caps the fine at $5,000 and will give the PSC authority to write rules that define when a penalty could be imposed.

Click here to listen to Bosch's comments.

The initial version of the bill would have required utilities to "firm" their capacity, ensuring much of their generation would be available at times of peak electrical demand. Click here to see the latest version of the bill, which will be considered on the House floor next week.

Coal Plant Shutdown Study Proposed
Bonding, Reclamation Costs to be Examined

What began its legislative life as a bill that would have required the Public Service Commission to conduct hearings in affected counties if a coal plant shutdown was proposed has been amended to instead study the ramifications of such a shutdown.

Beulah Senator Jessica Bell proposed the amendment to HB 1455, which had been watered down from its original version to simply require the plant's owner to notify the PSC and county auditor if the owner/operator was considering removing a power plant from service. Existing language would also compel the utility that owns the plant to provide the PSC with information about its effect on reliability.

If the study proposed in the amended bill is approved, an interim committee would look into "the need, cost, effect, and appropriate process for bonding and ensuring reclamation of coal conversion facilities." It would study the amount of financial assurance and schedules; interaction of economics and the statutes, rules, and policies relating to the remaining useful life and early retirement of coal conversion facilities; the role of the PSC in all electrical generation retirement; and the appropriate level of community involvement in the retirement process.

The study would also examine the state's role in assuring grid reliability. It would evaluate the effectiveness of government programs and incentives relating to energy production, reliability, and the role of state agencies in that process.

Schaible Wants "1 and 1" Restored
Dollars to Provide Pay Raise for Teachers

The chairman of the Senate Education Committee said he would like to see the 2021 Legislature approve a modest increase in state aid to schools to help districts provide salary increases to teachers.

Mott Senator Don Schaible said he's asking the Senate Appropriations Committee to restore the "1 and 1" increase that was removed by House budget writers. The 1-and-1, meaning a one percent increase each year of the biennium in the current $10,036 per pupil payment to the state's public school districts, was cut by the House because members felt districts would have enough money thanks to receiving federal COVID-19 relief (see article in Feb. 26 newsletter). But Schaible says there are limits to how the federal money can be used, and giving pay raises is not allowed. He wants district to spend the money wisely, and feels the state should kick in dollars to compensate teachers.

Click here to listen to Schaible's comments.

Schaible said the 1-and-1 would add a total of $34 million to HB 1013, the 2021-2023 biennial budget for the Department of Public Instruction. The legislation also contains a proposed study that to consider the feasibility of using up to 1 percent of the Common Schools Trust Fund for school construction grants. Schaible said he's not a fan of that idea.

Click here to listen to Schaible's comments.

The DPI budget, the second largest in state government behind Health and Human Services, contains just under $2.1 billion to support K-12 districts through the school funding formula. In addition to K-12 funding, the DPI bill also includes the budget of the state library, the school for the deaf, and the North Dakota vision services - school for the blind. 

Senate OKs Deficiency Appropriations Bill
Money Included for DAPL Protest and TR Library

The ND Senate approved a bill this week that provides "deficiency appropriations" to various state agencies.

Among other things, HB 1025 includes a $750,000 for payment of interest to the Bank of North Dakota on the outstanding loans for the Dakota Access Pipeline protest response.  Senate Appropriations Committee Chairman Ray Holmberg explained that the bill authorizes the Attorney General to continue litigation to recover the full DAPL policing costs from the federal government.  

Click here to listen to Holmberg's comments. 

The appropriation bill also includes partial repayment for the $35 million loan authorized in the last legislative session for creation of the Theodore Roosevelt Presidential Library Endowment Fund. Because it was amended in the Senate, HB 1025 now heads back to the House for concurrence. 

Click here to review the complete list of deficiency appropriations from the prepared testimony of Joe Morrissette, Director of the Office of Management and Budget. 

Senate: No Federal Election Takeover

The North Dakota Senate clearly is not interested in allowing a federal takeover of elections. Senators on a voice vote approved HCR 3047 to send a message to Congress that it does not approve of H.R. 1.

Deputy Secretary of State Jim Silrum, in testimony before the Senate Government and Veterans Affairs Committee, said H.R. 1 if enacted "would make future elections barely recognizable from what they are today." He described HCR 3047 as "perhaps the most important action relating to elections" that could be taken this session. 

Silrum cited 11 examples of bad ideas in the federal legislation, including a plan to turn Washington D.C. into the 51st state. He said it would also mean the voting system North Dakota just used for the first time in 2020 would have to be replaced by 2022 with a new voting system not yet developed. Click here to see the list of examples from Silrum's testimony. 

Velva Senator Shawn Vedaa, who pitched HCR 3047 on the Senate floor, urged colleagues to oppose the election takeover. 

Click here to listen to Vedaa's comments. 

The legislation, which was amended in the Senate, now heads back to House which approved the original resolution on a party line 79-13 vote.

Road Train Pilot Project Approved

Legislation to study the impact of road trains has traveled a long way since the session began in January, but may be nearing the end of its journey after passage this week by the ND House.

SB 2026 passed the House 66-27 after three changes were made in response to concerns that had been raised regarding safety and local control. Fargo Rep. Tom Kading said the changes included a provision that city and county governments must agree before a pilot project could be conducted on local roads.

Click here to listen to Kading's comments. 

Originally, the bill only included road trains which are semis with more than one trailer, but was changed to include tractors and other combinations. The pilot project would be conducted by the ND Department of Transportation. North Dakota would need the permission of Congress to use the interstate highway system for the study.

Click here to read an article on road trains from the January 15 issue of the WDEA newsletter. Click here for an article from KFYR-TV on the Senate's passage of the measure in January. 

NDIC Approves Rare Earth Grant
Effort Will Simulate Full-Scale Project

The ND Industrial Commission approved funding this week for a research project that will evaluate the potential for rare earth elements and critical minerals from coal seams in southwestern North Dakota.

The estimated cost of the nine-month project is $1.1 million to be split between the state and Great Northern Properties, owner of the lignite reserves. The objectives of the project are to identify promising coals, determine the extraction behavior of samples, and collect an amount large enough to simulate full-scale extraction of rare earth elements to support a technical and economic assessment.

The elements are used in electric cars, wind generators, catalysts, cell phones, medical and military applications, and demand is growing rapidly. China is currently the primary source of rare earth elements, but the United States would like to produce more to ensure a reliable and affordable supply.

Another round of Lignite R&D proposals will be accepted by the Commission in April with the next Lignite Research Council meeting slated for May 13.

WBPC Agenda Features Top Execs
Continental, Denbury, DAPL CEOs to Speak
Conference to be held May 11-13 in Bismarck

Williston Basin Petroleum Conference organizers have announced the addition of three executives from Continental Resources to the program agenda.

Topping the list is Harold Hamm, the chairman of the company, which is the largest oil producer in the Bakken. Hamm has been a longtime leader in the national and international oil and natural gas industry. Joining Hamm is Continental CEO Bill Berry, as well as Shelly Lambertz, the company’s Chief Culture Officer & Senior Vice President of Human Resources.

The conference will feature CEOs and executives from other key companies and organizations across the globe including: 

• Bob Phillips, CEO of Crestwood Midstream – "Building Gas Capture Infrastructure"
• Chris Kendall, CEO, Denbury Resources – "EOR at Cedar Hills in Bowman County"
• Dan Clark, VP of ConocoPhillips Great Plains Business Unit
• Kelcy Warren, Executive Chairman of Energy Transfer LP
• Mike Sommers, President and CEO of American Petroleum Institute – "The State of American Energy"
• Joel Brown, Co-Founder & CEO, Mineral Tracker
• Cully Cavness, President, Crusoe Energy Systems
• Neel Kashkari, President, Minneapolis Federal Reserve
• Ryan Kopseng, President, Missouri River Royalty Corp.

The conference will also feature most of North Dakota's top elected officials, and several legislators, regulators and agency heads: 

• Doug Burgum, Governor - State of North Dakota
• Brent Sanford, Lieutenant Governor - State of North Dakota
• John Hoeven, U.S. Senator
• Kevin Cramer, U.S. Senator
• Kelly Armstrong, U.S. Congressman
• Jessica Bell, North Dakota Senator
• Glen Bosch, North Dakota Representative
• Todd Porter, North Dakota Representative
• Brian Kroshus, ND Public Service Commissioner
• Ryan Rauschenberger, ND Tax Commissioner
• Ed Murphy, State Geologist
• L. David Glatt, Director - ND Department of Environmental Quality
• Charlie Gorecki, CEO - UND Energy & Environmental Research Center
• Lynn Helms, Director - ND Department of Mineral Resources
• Justin Kringstad - Director, ND Pipeline Authority
• James Leiman, ND Commerce Commissioner

"The WBPC is one of the top oil conferences in the country. We have an incredible lineup of speakers,” said Ron Ness, President of the North Dakota Petroleum Council, the lead organizer of this year’s conference. "We are excited to feature the latest technologies that have helped turn the Bakken into a world-class resource and discuss the way forward to help take the Bakken and Williston Basin to the next level."

The conference will be held May 11-13 at the Bismarck Event Center. Exhibit space is still available. Click here for more information. Click here for registration information. 

Al Golden Scholarship Applications Open

The ND Petroleum Foundation is now accepting applications for the Al Golden Memorial Scholarship from students pursuing a career in the energy sector.

The scholarship fund was established in 2008 to support students pursuing work in geology, engineering, processing plant technology, science, technical skills or other careers related to the oil and gas industry. The scholarship is named after the North Dakota oil pioneer Al Golden, the first member of the North Dakota Petroleum Council’s Hall of Fame.

The ND Petroleum Foundation will award nine $2,000 scholarships each school year.  Recipients receive $1,000 for the fall semester and $1,000 for the spring semester. The scholarship is open to full-time students who have a 3.0 GPA or higher. 

Applicants must also have completed ONE of the following:

• At least six months of work and/or internship experience in the oil and gas industry.
• Completed at least 12 hours in geology, earth science, geological/petroleum engineering, chemistry, math, or safety. 

The application deadline is June 1. 

Williston featured in "Information Matrix"

Williston will be featured in an upcoming episode of “Information Matrix” hosted by Laurence Fishburne, widely known from the popular motion picture series "The Matrix." 

The episode features Williston City Administrator Dave Tuan, Economic Development Director Shawn Wenko, Airport Manager Anthony Dudas, and former Williston Public School District No. 1 School Board President Joanna Baltes.

In recent years, the City of Williston was named the fastest growing micropolitan due to an influx of residents coming to work in the Bakken. A promo for the episode began airing April 1 on the Fox Business Network.

The production will be distributed to over 200 Public Television stations on April 26. 

"We are looking forward to the national exposure we'll receive from "Information Matrix," Wenko said. "Our segment will showcase the many opportunities available here in Williston."

LEC Annual Meeting Set for April 22
Registration Now Open for In-Person Event

Registration is now open for the Lignite Energy Council for an in-person OR virtual annual meeting in Bismarck. 

A Lignite Reception is set for Wednesday, April 21, to be followed with LEC's annual meeting on April 22.

“We haven't seen many of you in so long and we are very much looking forward to seeing you in person OR virtually at either or both of our two events that will comprise the two-day membership gathering and informational sessions,” the group said in an email announcing that registration is open. 

The Lignite Reception is new this year and will feature light hors d'oeuvres, two complimentary beverages, dinner and entertainment as well as networking.

To register, click here. For event sponsorship information, click here.

U Drive. U Text. U Pay.
Statewide Campaign Underway

Law enforcement patrols will be focused on enforcing North Dakota’s distracted driving law this month.

Safety officials say distracted driving can mean more than just taking one's eyes off the road. Texting is one of the most common driving distractions, leading to nearly 300 citations in North Dakota in September 2020. 

"Get a 'do not disturb' app and use it so you are always driving distraction-free," said McKenzie County Sheriff Matt Johansen. "It makes it easier to put the phone down and concentrate on driving." 

Preliminary crash fatalities in 2021 are trending higher than previous years with 21 fatalities to date, making this campaign a vital part of the Vision Zero strategy to eliminate motor vehicle crash fatalities and serious injuries on North Dakota roads.

Click here for a short video on the Vision Zero campaign.