Lt. Governor Brent Sanford leads a discussion of ESG issues at the ND Chamber's Policy Summit. L to R are Blu Hulsey, Nicole Kivisto, Thomas Beadle and Sanford (see story below).
Cost, Reliability Should Be Considerations
Large financial firms throughout the country are increasingly basing investment decisions on ESG principles, and it's having an impact on energy producers in North Dakota.
ESG - Environmental, Social and Corporate Governance - promotes "sustainable" business practices, which in many cases discourage investment in the fossil fuel industry. Government and energy sector leaders who participated in a panel discussion this week at the Greater North Dakota Chamber's annual policy summit say the state needs to do a better job explaining the benefits energy companies deliver and their efforts to protect the environment.
Nicole Kivisto, President and CEO of Montana-Dakota Utilities, said as a publicly-traded company MDU has been addressing ESG concerns for years.
"It's just the right thing to do," Kivisto said. "We want to take care of the environment, we want to take care of our employees, we want to take care of the communities we live in, and we want to govern our organizations with appropriate policies and procedures."
Blu Hulsey, Senior Vice President of Government and Regulatory Affairs for Continental Resources, said the company hasn't been required to report its practices until recently, but it has been employing sound ESG policies since Continental was founded by Harold Hamm 55 years ago.
"What we're doing now is having to actually articulate what that means," Hulsey said. "We really concentrated on that social aspect, what does it mean to produce clean, abundant, reliable energy and do it responsibly. We think that social aspect of what we're providing to the consumer and what we're providing to the economy, what we're providing to the nation for security reasons, is a huge social aspect, and we're concentrating on that in our ESG report."
State Treasurer Thomas Beadle, who is a member of the State Investment Board, said political pressure is being applied to Wall Street to divest from fossil fuels, which can have a big impact on states like North Dakota. Beadle said the state lets investment banks know North Dakota won't invest its assets if they endorse such practices.
"Money speaks volumes so if we're talking to these investment banks, we say 'we're not going to be putting money with you if you're taking this push and trying to demonize our industry,'" Beadle said. "That allows them to at least hear what we have going on here."
Kivisto said promoters of ESG focus heavily on the environment, particularly emphasizing efforts to reduce carbon dioxide emissions, but she said utilities have to consider their other responsibilities to investors and consumers.
"I don't just have an environmental responsibility I have to provide safe, reliable, affordable, and environmentally-friendly energy, and we have to make sure that we're balancing that conversation," Kivisto said. "If we're going to lean too heavy on one or the other, are we sacrificing reliability, so we need to find that balance, environmentally friendly but reliable as well."
Hulsey said the federal government's efforts to promote a cleaner environment have produced misguided incentives such as offering rebates for $100,000 electric vehicles, when it should be paying more attention to the impact of ESG policies on low income Americans.
"What we should be talking about is the poor, the middle class, the working poor, what we're doing in our country and what's happening with just general inflation today," Hulsey said. "Utilities and commodities like oil and gas, they're all going to see rising costs. The more restrictions you add on us, the more it's going to raise the price of the commodity that we produce."
"Like Driving from Fargo to Grand Forks"
To say North Dakota's rate of crude oil production remained flat in the month of June is no exaggeration. The change from May to June was almost imperceptible.
Production numbers released today show June crude output averaged 1,128,185 barrels/day, or just 143 more bbl/day than the previous month. That figures out to an increase of just over 0.01%, a number so flat that ND Pipeline Authority Director Justin Kringstad quipped that it was "like driving from Fargo to Grand Forks." The state's record production is 1,519,037 bbl/day in November 2019.
Natural gas production also increased in June, but its change was also almost imperceptible. June production averaged 2,982.583 million cubic feet per day, compared to 2,981.592 MMCF/day in May.
Lynn Helms, director of the Department of Mineral Resources, said he still expects a production increase because crude prices have improved, but said the industry is still struggling to get back to pre-pandemic production activity.
Click here to listen to Helms' comments.
Helms said one bright spot was a decrease of more than 500 in the state's inactive well count, resulting in an all-time record of 16,825 producing wells in the state. He said with higher prices, workover rig companies are in high gear bringing shut-in wells online and keeping others pumping.
Click here to listen to Helms comments.
Helms noted that the state is becoming increasingly concerned about the impact of the Biden administration's federal leasing ban. He said two lease sales have already been missed, and he said the absence of the third quarter lease sale will impact two significant tracts, causing a big financial hit to the state.
Click here to listen to Helms' comments.
Helms said if the two tracts with federal minerals aren't available for leasing soon, they will be sectioned off and never be developed. That's something he said the state will try to impress upon Tommy Beaudreau, Deputy Secretary of Interior, who is scheduled to visit the state next week.
Urge White House to Back US Industry
Political and oil industry leaders reacted with outrage this week to a message from the Biden administration, urging OPEC and its allies to boost oil output to reduce rising gasoline prices that they see as a threat to economic recovery.
Biden's national security adviser Jake Sullivan criticized big drilling nations, including Saudi Arabia, for what he said were insufficient crude production levels in the aftermath of the global COVID-19 pandemic.
The North Dakota Petroleum Council called out Biden's hypocrisy, noting his administration's previous actions that reduced the ability of U.S. oil producers to deliver more crude to the market.
“Since he took office, President Biden has been using every tool available to hamstring our domestic oil and gas industry, immediately signing Executive Orders to stop leasing of federal resources and instructing every level of the federal government to draft rules and regulations to restrict our ability to produce affordable and reliable energy here in the United States,” said NDPC President Ron Ness. “If the White House actually cared about Americans having access to 'affordable and reliable' energy, as they claim in their statement, they would be taking every step necessary to facilitate increased production here in America and ease off their plans to regulate our domestic industry out of business."
ND Governor Doug Burgum also took issue with Biden's statement suggesting that OPEC increase oil production to offset high fuel prices.
“This is another glaring example of the Biden administration’s failed and misguided energy policies, including issuing executive orders restricting U.S. energy production and transportation, putting up red tape and creating regulatory roadblocks,” Burgum said. “Instead of urging foreign nations to boost oil output to reduce U.S. gasoline prices, the administration should be encouraging and supporting states like North Dakota to increase oil production to pre-pandemic levels to reduce our reliance on foreign energy sources."
The government of Alberta, where production was stymied by Biden's cancellation of the Keystone XL Pipeline, also responded to Biden's plea to OPEC. Minister of Energy Sonya Savage said Biden's plea "smacks of hypocrisy."
“Keystone XL would have provided Americans with a stable source of energy from a trusted ally and friend that adheres to the highest ESG standards in the world with industry commitments to net-zero production," Savage said. "Had pipelines not been politicized by opponents of oil and gas, Keystone XL would have been operational for years and reliably delivering nearly 1 million barrels of oil every day to American refineries."
“The bottom line is the world needs Alberta’s energy," Savage continued. "Albertans own the third-largest oil reserves in the world and our industry is at the forefront of innovation and technology to reduce emissions and produce oil with the lowest carbon footprint. We are well-positioned to meet global demand and support a post-pandemic economic recovery."
McKenzie County Fastest Growing in Nation
The 2020 populations figures released this week by the U.S. Census Bureau show dramatic increases in western North Dakota communities related to growth in Bakken oil production.
The numbers show McKenzie County's population grew faster than any other county in the country, increasing 131% the past 10 years. The county's population increased from 6,360 in 2010 to 14,704 in 2020. Williams County's population also nearly doubled, increasing by 83% from 22,398 to 40,950. It surpassed Stark County as the most populous county in western North Dakota. Stark's population grew at the third fast rate among counties in the state, with a 39% increase to a total of 33,646 residents.
Population gains in Dunn and Mountrail Counties, the other major oil-producing counties, weren't as large, but were still significant. Dunn County gained 559 people for a total of 4,095, about a 16% increase. Mountrail County gain 2,136 residents for a total of 9,809, an increase of 28 percent.
The entire state’s population grew from 672,591 to 779,094 — a nearly 16% increase. North Dakota also had the fastest-growing population under age 18, at 22.1% growth. Cass County is far and away the most populous with 184,525 residents, followed by Burleigh County with 98,458 people.
The new population figures will mean more political representation for western North Dakota. The ND Legislature's Redistricting Committee is scheduled to hold the first of several meetings on August 26. Click here to see the committee agenda.
Click here for more census data.
Study Asks if Ag Commissioner Should Serve
The biggest task for the ND Board of University and School Lands these days is managing the state's mineral assets, but the board also leases the surface of state-owned lands to farmers and ranchers, and that has legislators asking if agriculture should have a voice at the table.
The legislature's interim Judiciary Committee has been assigned the task of determining whether the Agriculture Commissioner should be added to the board, or perhaps replace an existing member. The Land Board currently consists of the Governor, Attorney General, Secretary of State, Treasurer and the Superintendent of Public Instruction.
Land Commissioner Jodi Smith provided committee members a brief history this week of the board's composition, and an overview of how other state's manage state-owned lands. When specifically asked if ag representation is needed on the board, Smith pointed out that some current board members and Land Department staff have a background in agriculture.
Click here to listen to Smith's comments.
If the ag commissioner were to become part of the Land Board to represent the ag industry, Smith questioned whether other specific sectors should also be considered for representation.
Click here to listen to Smith's comments.
Ag Commissioner Doug Goehring was unable to attend Wednesday's committee meeting, but another department employee, Tom Bodine, testified regarding their interest in pursuing legislation to include the commissioner on the board.
Bill to Reclaim Nation’s Orphaned Wells
The U.S. Senate this week passed the Revive Economic Growth and Reclaim Orphaned Wells (REGROW) Act, a bipartisan bill co-sponsored by ND Senator Kevin Cramer and Senator Ben Ray Luján, D-NM.
If it ultimately becomes law, the bill would provide $4.275 billion to plug and remediate the nation’s orphaned oil and gas wells. The legislation is now part of the Senate infrastructure package, which is headed for the House of Representatives. In addition to its nationwide funding for reclamation work, the bill would also specifically provide $400 million for orphaned well cleanup on public and tribal lands, as well as $32 million for related research, development and implementation.
“The REGROW Act is a pro-jobs and pro-natural resources piece of legislation that would put unemployed oilfield workers back on the job where they can use their skillsets to prevent environmental hazards and make the land in their communities productive again,” Senator Cramer said. “North Dakota showed the nation how to create an orphaned wells remediation program, and now the federal legislation built on our state’s innovative thinking is one step closer to becoming law."
REGROW Act supporters including the ND Department of Mineral Resources, Independent Petroleum Association of America, and the Interstate Oil and Gas Compact Commission.
“I applaud Senator Cramer’s work to include the REGROW Act in the Infrastructure Investment and Jobs Act that passed the US Senate,” said DMR Director Lynn Helms. “This investment in the environment and in skilled oil and gas workers will provide a resource for states with idle and orphaned wells to address a growing concern while at the same time encouraging those states to review their existing regulatory framework and find solutions to prevent the concern from growing.”
Click here to read a DMR white paper on North Dakota's abandoned wells.
Floor Amendment Touts Need for Reliability
ND Senator John Hoeven introduced an amendment to the Democrats’ budget resolution this week to put the Senate on the record regarding the importance of baseload power, including coal-fired and natural gas-fired plants.
Hoeven's amendment follows a recent report from the North American Reliability Corporation which he said warned that areas across much of the country, including the Upper Midwest, are at high risk of blackouts. The amendment supports policies that expand deployment of 24/7 baseload power and opposes efforts to ban traditional fuels, impose energy taxes or mandate "green power."
Click here to listen to Hoeven's comments.
Hoeven, a member of the Senate Energy and Natural Resources Committee, said rather than promoting unreliable renewable generation, his Democratic colleagues should instead support expanding access to baseload power generation using resources like coal and natural gas, while implementing technology to capture and store carbon dioxide.
Hoeven's amendment was adopted on a 52-47 vote. Click here to read more about NERC’s 2021 Reliability Risk Priorities Report regarding imminent and projected risks to bulk power system reliability.
Empowers Access to Federal Assets
ND Senator Kevin Cramer and Oklahoma Senator James Inhofe have introduced legislation that would give states the right to develop all of the energy resources on the federal lands located within the state’s borders.
North Dakota is one of many states which benefit from energy production on federal land, and the bill would allow the state to decide what is best for its own resources.
The Federal Land Freedom Act, as it is named, would give each state the right to develop energy resources on federal lands, excluding tribal lands, national parks and federally-designated wilderness areas. The legislation would also allow states to develop a regulatory program governing the leasing and permitting of energy activities on its federal land.
Both the Lignite Energy Council and ND Petroleum Council offered their support for the legislation.
“This bill empowers those people who are most familiar with the environmental risks to build programs that best protect the environment while maintaining and extending North Dakota’s position atop the United States’ energy and environmental hierarchy,” said LEC President Jason Bohrer.
“This bill embodies the concept that North Dakotans have long supported; as a state, we are much better equipped to manage our lands and resources than the federal government," said NDPC President Ron Ness. "We have an effective state regulatory structure in place and we are proud of our environmental record.”
Bill Would Let States Regulate Fracking
Taking the intent of the Federal Land Freedom Act a step farther, Senators Cramer and Inhofe introduced the Fracturing Regulations are Effective in State Hands (FRESH) Act which would give states full authority to regulate fracking on any land within their borders.
“North Dakota is a leader in the clean and safe production of oil and gas, "Cramer said. "While our foreign adversaries increase their energy production, our energy producers have been stalled by an intrusive federal bureaucracy and an Administration which seems openly opposed to their success. Our bill would allow states to decide how to best regulate the fracking industry within their borders.”
The FRESH Act would also grant states exclusivity of regulation on federal lands.
Click here to read Senator Cramer's news release.
Event Will Examine Needs, Gaps and Local Impact
The Greater North Dakota Chamber is planning to host a Transportation Forum to discuss the need for safe and reliable transportation networks, and the role they play in shaping the state's economy.
The forum will be held September 29 at the Ramkota Hotel and Convention Center in Bismarck. The day-long event will take a look at how transportation and associated policies play a role in all industries and the state's economics. National and regional experts will provide updates on trends and data impacting their organization, industry and the state.
The event kicks off with a keynote speech by Ed Mortimer, Vice President of Transportation Infrastructure for the US Chamber of Commerce. His remarks will be followed by presentations from the ND Association of Counties and the ND League of Cities regarding local infrastructure, and the need for adequate funding to build and maintain it.
Attendees will also hear from Denver Tolliver, Director, of the Upper Great Plains Transportation Institute, who will describe North Dakota's need for $24.6 billion over the next 20 years to maintain current roads and bridges. Also on the agenda are remarks from Kenneth Simonson, Chief Economist with the Associated General Contractors of America, who will describe North Dakota's current transportation funding stream and the importance of additional investments in construction.
The forum will conclude with another keynote speech from Bill Panos, director of the ND Department of Transportation, who will provide a look at the current state of North Dakota's transportation system and the NDDOT's vision for the future.
Click here for additional information or to register. There is a $60 fee for GNDC members and a $90 fee for non-members.
WDEA Annual Meeting in Williston
The Western Dakota Energy Association will hold its annual meeting October 13-14 at The ARC in Williston.
The in-person event will get underway at 1:00 Wednesday afternoon, and will begin with one of the event's favorite speakers. Rather than concluding the event, this year's annual meeting will begin with a presentation by Lynn Helms, director of the Department of Mineral Resources. Helms is scheduled to deliver his traditional county-by-county production forecast report at 1:15, following opening remarks by WDEA President Shannon Holter and Williston dignitaries.
Other elements of the agenda are still being developed, but will feature speakers who will provide updates on major energy-related happenings including the pending sale of Coal Creek Station, the development of a hydrogen industry, efforts to develop in-state TENORM disposal options, career and technical education plans, and the ongoing debate over school funding.
The meeting will feature a social, short program and entertainment Wednesday evening. The event concludes Thursday afternoon with election of the WDEA Executive Committee.
Board members up for election who are eligible to serve an additional three-year term include Bowman Mayor Lyn James, Williams County Commissioner David Montgomery, Washburn Superintendent Brad Rinas who represents the Coal Conversion Counties, and a new member will be chosen to represent education members to replace Dickinson Superintendent Shon Hocker, who resigned to accept a position in Idaho.
- DAPL moves more oil as EIS that will decide its fate continues -- Williston Herald
- Port: Land Board making billion-dollar decisions out of public's eye -- Fargo Forum
- ND and Montana each stand to gain $2 billion from federal bill -- Williston Herald
- Oil well fire out after burning for 16 days in McKenzie County -- Bismarck Tribune
- Residents, officials weigh in on possible refinery wind energy project in Dickinson -- KFYR-TV
- First CO2 storage hearing held as ethanol plant seeks to capture emissions -- Bismarck Tribune
- Cramer's ban on fracking bans passes Senate in vote-a-rama parade -- Williston Herald
- North Dakota's overshadowed solar industry imagines a different future -- Dickinson Press
- Census: North Dakota's oil counties, cities see big growth in 2020 numbers -- Bismarck Tribune
- Senator Ray Holmberg and other legislators: Term limits unnecessary in ND -- Grand Forks Herald
- State updates juvenile justice program for the first time since the 60s -- KFYR-TV
- Work begins on water release tunnel beneath Snake Creek embankment -- Minot Daily News
- Citizens granted access to City Hall with the push of a button -- Crosby Journal
- City council adopts $9 million preliminary budget -- McKenzie County Farmer
- Only voters have the power to dissolve city's park district -- Tioga Tribune
- Southwest ND residents are asked to conserve water after pipeline eak -- KX News
- City of Minot updates traffic light system, improves timing -- KFYR-TV
- North Dakota’s plan for using $305M federal funds for schools approved -- Bismarck Tribune
- ND Army National Guard hosts conference to help school counselors make connections -- KX News
- ND doctors discuss back-to-school immunizations, COVID not for those under 12 -- KVRR-TV
- Fargo Public School Board reinstates mask mandate; will others follow? -- Hot 97.5 FM
- Masks are recommended, but will not be required, in Minot schools -- Minot Daily News
- Mask or no mask, Garrison students have option when school begins -- McLean County Independent
- Vocational teachers around North Dakota gather for conference -- KX News
- Global coal prices are soaring, China market leading the way -- Institute for Energy Research
- Minnesota regulators' anti-coal policies will cause natural gas price spikes -- American Experiment
- Climate change has consumed journalistic standards, objectivity is gone -- Wall Street Journal
- Ohio enacts legislation that gives counties power to veto wind/solar farms -- Energy Wire
- Tax hikes on energy will hurt the economy and America's competitiveness -- The Hill
- Russia benefits from Biden oil and natural gas policies -- Institute for Energy Research
- Droughts shrink hydropower, pose risk to global push to clean energy -- Reuters
Factoid of the Week
Source: History of Lignite
Belcourt, St. Michael
The ARC - Williston
August 13, 2021
WTI Crude: $68.44
Brent Crude: $70.59
Natural Gas: $3.86
North Dakota Active Oil Rigs: 23 (Unchanged) 8/13/2020 -- 11 rigs