North Dakota's capital city was blanketed by dense fog to begin the new year, analogous to the uncertain future that awaits us in 2021, coming events of which are anything but clear.
2021 Session Will Definitely Be Different
Many North Dakotans have become familiar with "virtual" meetings via Zoom, Microsoft Teams or other platforms since the coronavirus pandemic began, and those skills will come in handy when the 2021 session begins Tuesday, January 5.
The Capitol and committee hearings will be open to the public, but due to ongoing health concerns related to the COVID-19 pandemic, social distancing rules will limit the number of individuals who physically attend the meetings, and all legislative committee hearings will offer the public a virtual testimony option. The legislature has also instituted a mask rule for all areas of the Capitol controlled by the legislature. The rule states that lawmakers, staff, lobbyists and members of the public "shall wear a face mask or shield covering the nose and mouth completely, although the face mask or shield may be lowered or removed while speaking on the floor of the chamber after the member is recognized by the presiding officer."
The rules also recommend that legislators and legislative branch employees complete a daily health self-assessment before going to the Capitol. Individuals entering the building will be required to submit to a temperature screening, and anyone with a reading of 100.4°F or greater or who is experiencing virus symptoms may be turned away.
The location of committee rooms will be different for the 2021 session. Smaller rooms will not be used, and four new rooms have been developed in the Judicial Wing on the east side of the Capitol. One room will be on the second floor of the J-Wing, and three news rooms will be located on the third floor. The House Appropriations Committee will meet in the spacious Brynhild Haugland Room, and Senate Appropriations will use the Roughrider Room which the House committee will have vacated. All committee hearings will be live-streamed via the internet, and recordings of the meetings will be archived on the legislative website.
Legislative Council's IT staff has been busy, developing new options for public participation. Each Thursday, committees will continue to post their schedule of bills for the coming week. But new in 2021 will be an option for lobbyists and the public to submit written testimony online through the committee's web page prior to the hearing on a bill. Individuals will have the option to submit written testimony only, or to provide written and oral testimony. Time and space limitations may require committee chairs to limit the amount of oral testimony on a particular bill. The deadline for submitting testimony to committees will be one hour before the start of the committee hearing. Written testimony that is submitted will be immediately available to legislators through their LAWS legislative information system, and will also be posted on the legislative website where it can be accessed by the public. Committee staff will have the option to redact portions of public testimony if it contains sensitive information such as Social Security numbers or birthdates, and will not post testimony that contains profanity, pornography or other inappropriate content.
Click here for the 2021-22 Legislative Manual which includes names and contact information for legislators and staff, as well as committee assignments, committee room locations and rules governing the 2021 session.
January 5 - Session begins, Governor delivers State-of-the-State message
January 18 - Deadline for House members to introduce bills
January 25 - Deadline for Senators to introduce bills
February 23 - Day 36, Bills and resolutions must be reported out of committee of origin
February 26 - Day 39, Crossover, all bills and resolutions must clear house of origin
March 3 - Day 40, Session reconvenes after crossover break
April 7 - Day 65, Bills and resolutions must be reported out of second house committee
April 30 - Day 80, Constitution limits session to 80 days
Two federal holidays, Martin Luther King Day (Jan. 18) and Washington's Birthday (Feb. 15), as well as Good Friday occur during the session. In 2019 the House and Senate were in session all three days.
Saving Coal Creek Station a Top Priority
The majority leaders of the North Dakota House and Senate both have coal near the top of their list of priorities heading into the 2021 Legislature.
House Majority Leader Chet Pollert, R-Carrington, and Senate Majority Leader Rich Wardner, R-Dickinson both listed saving Coal Creek Station among their top energy priorities of the 2021 session during interviews this week on the radio program Energy Matters. The owner of the 1,100-megawatt coal-fired plant, Great River Energy, announced that it intends to close the plant in 2022.
Pollert said he supports an "all-of-the-above" energy policy, but feels it's important to recognize that baseload plants like Coal Creek Station are crucial to maintaining the reliability of the electric grid.
Click here to listen to Pollert's comments.
Pollert said he believes the legislature can play a role in providing tools to keep the plant in operation, but cautioned that the state not subsidize its operation.
Wardner believes one of those tools may be low interest loans for plant improvements, and he expects a bill will be introduced for consideration by the 2021 Legislature. Wardner has his own plans for legislation, including a $1 billion bonding package that will support research to develop technology to capture carbon dioxide emissions from coal-fired plants. He said it's vital that the state pursue CO2 capture because it's likely a Joe Biden administration will renew the War on Coal.
Click here to listen to Wardner's comments.
Like his House counterpart, Wardner says the state should do everything possible to keep Coal Creek Station running, and is confident the state will be able to secure a new operator for the facility.
Click here to listen to Wardner's comments.
With oil prices and production well below previous forecasts, the 2021 ND Legislature will have fewer oil tax dollars to support the state budget. That will result in a scramble for available revenue, so preserving the status quo of the state's gross production tax (GPT) distribution formula will be a top priority.
WDEA was successful in 2019 in generating support for Operation Prairie Dog, a bill that was intended to share oil tax revenue with non-oil cities and counties, but also secured the crucial 70-30 State/Local split in the GPT formula, maintained Hub City funding and removed the sunset clause that necessitated legislative review every two years. Maintaining equitable distribution of oil tax revenue will remain a top priority in 2021.
The bonding proposal pitched by Gov. Doug Burgum and Senator Wardner will be a major focus of the debate. Many infrastructure needs such as road and bridge construction, water projects and improving or replacing municipal utility infrastructure would be assisted by a bonding package. Such investments will be important to diversifying the state's economy, making it less vulnerable to downturns in the commodity-driven ag and energy markets. The use of earnings from the state Legacy Fund will be a central focus of the debate.
Despite the reduction in the state's revenue picture, school funding and construction needs remain a top issue. Western school districts support maintaining or accelerating the move to on-time funding in the Foundation Aid formula, to provide a per-pupil payment based on current enrollment rather than the student number from the previous school year. Western schools also support establishing a mill-levy equivalent for GPT revenue, rather than requiring all districts to maintain a minimum 60-mill level as a demonstration of local taxing effort. Districts in the west where school construction is more expensive than the east would also like the legislature to consider a weighting factor to provide "construction equity" in the Foundation Aid formula.
The oil and gas industry may look for tax or regulatory incentives to help Bakken producers improve their competitive position with other shale basins. Bills will likely be introduced to support state research into enhanced oil recovery and enticements for establishing a petrochemical industry in the state.
Preserving the state's lignite industry will be a front-burner issue for western legislators. The continued operation of Coal Creek Station is a priority, but other bills aimed at protecting the industry will likely surface. Legislation may be introduced to provide greater PSC oversight of coal plant shutdowns to analyze impact to grid reliability. Lawmakers may also see legislation that would prohibit renewable energy leases on land that would impair access to lignite reserves. Expanded funding for lignite research focusing on CO2 capture will also be debated.
The legislature will also be asked to invest state resources into workforce training and recruitment efforts. Legislation will be introduced to support continued funding for career academies, scholarship programs and training targeted to high demand occupations.
As this edition of the WDEA newsletter was published, more than 200 bills have already been pre-filed for the 2021 session. Click here to see a list of pre-filed House bills, and here for pre-filed Senate bills.
Nothing Positive About Top Three Stories
1. Pandemic Slams State Oil Industry
Life for North Dakotans changed abruptly in mid-March 2020 with a series of Executive Orders issued by Governor Doug Burgum in response to the emerging COVID-19 pandemic.
Gov. Burgum issued the first Executive Order on Friday, March 13, declaring a state of emergency in North Dakota, activating the State Emergency Operation Plan to provide resources to local and tribal governments to respond to the emerging COVID-19 pandemic. The initial order was followed by another on Sunday, March 15, when Gov. Burgum ordered that all K-12 schools be closed for the coming week, while school staff developed alternate learning plans. Another order issued on March 19 effectively put North Dakota in a state of lockdown. With the announcement that several new cases of the virus were attributable to "community spread," Gov. Burgum instructed restaurants and bars to close to on-sale/on-site patrons.
Similar shutdowns were announced around the globe, and the resulting economic slump created a huge drop in global oil demand. Crude oil prices had already dropped sharply as a result of a price war between Russia and Saudi Arabia, but the pandemic sent the market into freefall. The price for oil futures contracts went negative in April, and actual prices realized by North Dakota producers bottomed out at an average of $7.92 per barrel in May. Companies responded by shutting in thousands of wells, causing production to plummet from a high of 1.51 million barrels/day in November 2019, to just 858,000 bbl/day in May. Drilling rigs were idled, and thousands of industry workers found themselves unemployed.
By year’s end, most wells had been brought back online, and production had recovered to just over 1.2 million bbl/day. But industry observers were predicting it would be a year or more before activity returns to pre-pandemic levels.
Click here to see the lengthy list of Executive Orders issued by Gov. Burgum in 2020.
2. GRE Announces Coal Creek Shutdown
Many expected the bad news was coming, but an announcement in May by Great River Energy that it planned to shut down Coal Creek Station in the second half of 2022 sent a shockwave through Coal Country.
The Minnesota-based cooperative said it will close the 1,100 megawatt plant near Underwood, and planned to replace much of the power with new wind farms, including three in Minnesota. GRE officials said the plant had been losing money for several years, undercut by lower cost electricity from federally-subsidized wind power backed up by cheap natural gas-fired generation.
The announcement put into jeopardy the jobs of 260 people employed at the plan, and another 400 who work at the adjacent Falkirk Mine which supplies the plant with lignite coal. State and local leaders expressed disappointment with the decision, but because GRE is willing to consider opportunities to sell the plant, there is a concerted effort underway to keep the plant in operation beyond 2022.
"Lt. Gov. Sanford and I are determined to find a path forward for Coal Creek Station that preserves high-paying jobs and keeps North Dakota’s most efficient and updated coal-fired plant on the grid to ensure baseload power capacity for our state and the region,” Gov. Doug Burgum said. “We remain committed to bringing stakeholders to the table to evaluate all options and find opportunity in this uncertainty."
3. DAPL Shutdown: Adding Insult to Injury
With North Dakota’s oil sector already reeling from a pandemic-induced slump in oil prices, industry leaders and state officials were stunned in July when a federal judge ordered that the Dakota Access Pipeline be shut down and emptied, despite the fact the 1,176-mile pipeline has been operating safely for more than three years.
U.S. District Judge James Boasberg's order nullified an easement for the pipeline to cross the Missouri River granted by the Corps of Engineers based on an environmental assessment. The same judge had previously ruled that the Corps must complete a full environmental impact statement on the project, but the decision in July ordered the pipeline shut down while the EIS was prepared.
The state of North Dakota, the industry and other parties appealed and were able to obtain a stay of the shutdown order, an effort backed by WDEA which submitted an amicus brief in support of the appeal. But plaintiffs, primarily the Standing Rock Sioux Tribe and its environmental extremist partner Earthjustice, continue efforts to block the flow of oil in the pipeline.
DAPL transports up to 570,000 barrels per day. The loss of the takeaway capacity would require shipping the oil by rail instead, adding $5.00 or more per barrel to the cost, on top of the existing $8.00/bbl differential because of the state's distance from the market.
Top 10 Good News Stories of Past Year
The Year 2020 is one that most people would prefer to forget. The world was forever changed by a global pandemic, and phrases such as "community spread" and "social distancing" became part of the lexicon.
But not all the news was bad. North Dakotans witnessed many positive developments the past year. Here is WDEA's Top Ten List:
1. The new LongX Bridge was completed. Oversize trucks crossing the Little Missouri River south of Watford City no longer need to be concerned about slamming into the old truss bridge. A new clear span, concrete girder bridge with four 12-foot lanes officially opened to traffic in October.
2. The Theodore Roosevelt Presidential Library Foundation announced in October that $100 million in commitments had been received, thereby unlocking the $50 million in support from the state of North Dakota. The library will be built near the entrance to Theodore Roosevelt National Park outside Medora.
3. North Dakota and the state's oil industry won a major victory in a crude-by-rail lawsuit with the state of Washington. The Pipeline and Hazardous Materials Safety Administration pre-empted Washington from using a state law to block Bakken crude shipped by rail through the state.
4. The Illinois Commerce Commission removed the final hurdle to allow Energy Transfer Partners to expand its 570,000 barrels/day Dakota Access Pipeline to move up to 1.1 million barrels of North Dakota crude per day. The ICC issued its final approval in October.
5. The lignite industry received a seat at the MISO table. The MISO board received approval from the Federal Energy Regulatory Commission in July to add an 11th stakeholder sector so that the Lignite Energy Council and other members of the coal sector can have a role on the MISO Advisory Committee.
6. Jobs programs were created to support the ailing oil industry. The legislature approved the use of CARES Act funding for programs to plug abandoned oil wells, reclaim the well sites, and incentivize completion of 80 DUC wells. The programs generated more than 1,000 jobs for unemployed workers.
7. Voters approved school construction projects in Beulah and Killdeer. A $6.9 million bond issue to fund an addition and renovation work on Beulah's high school was okayed in January, and in May voters in Killdeer approved a $38 million bond issue for a new junior high and high school.
8. Williams County and Williston school districts received voter approval in December of a reorganization plan that will merge the two districts. Both the Williston No. 1 district and Williams Co. No. 8 have been struggling individually to provide classroom space for their growing enrollments.
9. WDEA's Wise Roads project wrapped up Phase II with installation of the 25th weather station in the network. The project provides real-time weather information to allow county/township road managers to identify roads that require temporary weight restrictions, and exclude those that do not.
10. The state of North Dakota launched Vantis, the first statewide beyond-visual-line-of-sight network for drone technology in the nation. Installation of a radar unit in western ND will allow expanded use of drones to monitor and inspect energy industry sites in the Bakken.
By Mark Mathis, President of Clear Energy Alliance
Reprinted with permission of Bakken Oil Business Journal
In the final debate before the 2020 presidential election Joe Biden said that American industries must transition to renewable energy sources to get to zero emissions by 2025. He clearly misspoke.
A few minutes later he changed the target date to 2035. Whew! Good thing he corrected himself in time to limit the mocking on Twitter, right? But what the trolls on Twitter (and the vast majority of people at home) didn’t realize is that Biden’s revised date for carbon neutrality was just as idiotic as his gaffe.
Let me clarify this with an analogy. If I say I’m going to run from California to New York in four hours, you would roll your eyes at me and walk away. If I claimed I was going to do it in fourteen hours would your reaction be any different? Would it be any less ridiculous if I gave myself an extra ten hours to sprint across the nation? In truth, the claim that the impossible feat of carbon neutrality can be accomplished by 2035 is much more pernicious than Biden’s gaffe. Why? Because 2035 is far enough away that people uneducated on this incredibly complex topic may actually believe it is achievable.
We simultaneously expect far too much and far too little of our politicians. It’s ridiculous to believe Mr. Biden or any other politician can have a working knowledge of energy, climate, or any other complex issue. They don’t. However, it is reasonable to expect our leaders to know enough that they can speak intelligently. But that expectation is missing. Biden sets an impossible goal. Carbon neutral on our electric grid in just 15 years?! And nobody in our pathetic, non-journalism news media asks to see the document that explains how he’s going to do it. Biden was never pressed to provide even the broad strokes of his “plan”. There is no credible plan.
The key to any carbon neutrality plan for the grid is a rapid, massive increase in the deployment of nuclear, wind, and solar. Biden’s radical base is firmly against nuclear. So that leaves wind and solar. (Even if Biden were pro-nuclear, there’s no possible way he could come remotely close to his target.)
Wind and solar are intermittent. They produce electricity only about 25 to 35 percent of the time. They are unreliable. Therefore, we must have enough natural gas-powered electrons on standby to keep the lights on. In some states we are already running up against the limit. How much wind/solar can the grid system accept and still remain stable.
California, with its new-normal of summer blackouts, is a good example of where we are headed. Texas isn’t a lot better. It has a reserve capacity (excess power available above what is needed during peak demand) of about 7.5 percent. That’s only half of what is considered prudent. Blackouts are coming to Texas. The state has overbuilt wind power and doesn’t have enough baseload power (coal, natural gas, and nuclear).
Click here to read the rest of the article in the Bakken Oil Business Journal.
Conduct Transactions on any Mobile Device
The ND Department of Transportation is taking full advantage of transportable technology to bring many of its traditional transactions like driver license renewal and motor vehicle licensing to the convenience of a handheld mobile device.
“ND Drive is like having a driver license or motor vehicle office in your pocket,” said NDDOT Director Bill Panos. “Our goal is to provide our customers the best service possible and make transactions more seamless. We feel this app will help us reach this goal and provide another alternative to in-person appointments.”
The app allows users to renew or request a replacement driver license or ID card, obtain a driving record, schedule a driving test, and pay reinstatement fees. Development of the app, called ND Drive, began in September. Motor vehicle customers will be able to renew their motor vehicle registration, apply for a 30-day temporary registration, renew a Mobility Impaired Placard and more.
The app also allows users to update their permanent address or email on file. Customers can download the app from the Google Play or Apple App Store. ND Drive replaces the NDRenewals app as the official customer service app of the NDDOT. For more information about ND Drive, click here.
- ND's oil industry faced terrible' year; lengthy recovery expected -- Bismarck Tribune
- Fed officials investigate fiery oil train derailment in Washington -- Associated Press
- Petrochemical industry remains on ND’s radar, probably in 2022 -- Tioga Tribune
- Line 3 opponents stage first of 'weekly' protests at Enbridge office -- Fargo Forum
- Enbridge Line 3 pipeline opponents sue to shut down Minnesota construction -- Associated Press
- Man who died at Enbridge Line 3 pipeline site run over by forklift -- Associated Press
- Oil industry will weigh on North Dakota's oil-dependent cities into 2021 -- The Bond Buyer
- Several high-profile court cases mark North Dakota politics in 2020 -- Bismarck Tribune
- AG Stenehjem backs Ethics Commission’s power to clarify key terms -- Associated Press
- 'Invest in ND' advocates call for targeting Legacy Fund investments at home -- Fargo Forum
- State legislative leaders defend spending, talk about Legacy Fund -- The Journal
- ND taxable sales and purchases down 19.5% for third quarter of 2020 -- KFYR-TV
- North Dakota Unemployment Trust Fund healthy entering 2021 -- Prairie Public Radio
- ND needed to hire Latvians to manage state's ancient computer system -- Dickinson Press
- WPX Energy donates $50K to United Way to support western counties -- ND Petroleum Foundation
- Lonnie Laffen, Grand Forks business leader and former lawmaker, dies at 62 -- Grand Forks Herald
- Lyle Hanson, Jamestown-area District 12 House representative dies at 85 -- Bismarck Tribune
- Year in North Dakota education marked by virus, retirements, and elections -- Bismarck Tribune
- District 007 board discusses business manager for combined district -- Williston Herald
- IRS begin delivering 2nd round of payments to millions of Americans -- Williston Herald
- 2021 travel may include a vaccine passport as proof of good health -- KFYR-TV
- Taxable sales in McKenzie County down 52 percent in third quarter -- McKenzie County Farmer
- North Dakota’s shale prospects look bleak after the gold rush -- Financial Times
- Off-duty oilfield worker spots carbon monoxide leak at Sidney restaurant -- Williston Herald
- Remodeled ND State Capitol public entrance opens just in time for session -- Bismarck Tribune
- Diamondback Energy spurs new U.S. shale consolidation with two big deals -- Reuters
- John Kerry: False prophet of the imagined climate apocalypse -- RealClear Energy
- Biden’s assault on fossil fuels jeopardizes America’s military strength -- Real Clear Energy
- 2020: A historic oil price collapse, with more worries headed into 2021 -- Reuters
- COVID mitigation efforts result in lowest U.S. petroleum consumption in decades -- EIA
- Oil industry doubled down on environmental commitments in 2020 -- Energy In Depth
- U.S. renewable energy consumption surpasses coal for the first time in over 130 years -- EIA
Factoid of the Week
Source: Sunrise Sunset
via Microsoft Teams
via Microsoft Teams
Hybrid: Online or in Bismarck
January 1, 2021
WTI Crude: $48.52
Brent Crude: $51.80
Natural Gas: $2.54
North Dakota Active Oil Rigs: 13 (Down 2) 1/1/2020 -- 55 rigs