Republican Senate and House Majority Leaders Rich Wardner and Chet Pollert pause for a photo in Memorial Hall following one of their regular meetings with Gov. Doug Burgum.
Lawmakers Hear Lessons from Texas
Advocates of North Dakota's lignite industry had a chance to say "I told you so" this week as the state experienced rolling blackouts related to wintry conditions and bitterly cold temperatures in the southern United States.
Supporters of baseload coal plants have been warning the public about grid reliability risks due to over-reliance on intermittent renewable generation, and their predictions came true Tuesday morning in North Dakota. Customers of Capital Electric Cooperative in the Bismarck area saw their lights go out for about 45 minutes due to actions taken by the co-op's power provider, the Western Area Power Administration, at the direction of the Southwest Power Pool (SPP). Other cooperatives in western North Dakota were also affected.
North Dakota's outages, and the extended power outage in Texas, highlighted testimony this week in the Senate Energy and Natural Resources Committee on SB 2313, a bill that would require entities using non-dispatchable energy (wind and solar) to secure "firming capacity" to meet a reliability standard established by the bill. However, the original measure was "hoghoused" with language that establishes a reporting requirement drafted by the ND Transmission Authority. The report would describe the adequacy of the grid to meet demand in the state, the resilience of the grid, and plans by generation owners to add or remove generation assets.
Committee members heard first-hand experience of the Texas outage from Mike Nasi, Senior Advisor, Life:Powered, who is based in Austin. Nasi took issue with media reports that the Texas outage was caused by the failure of coal, gas and nuclear plants to function in the adverse weather. He said thermal plants did go offline, but the outages were actually the fault of ERCOT, the Texas grid operator. Nasi said when ERCOT began losing wind resources, it needed to reduce demand by cutting power, but it responded too slowly, which overloaded the baseload plants.
Click here to listen to Nasi's comments.
Nasi said the underlying cause of the outage in Texas is identical to the concerns being raised in North Dakota. He said baseload generation is not being adequately compensated for the reliability it provides to the grid, creating financial difficulties for the plants, putting them at risk of closure.
Click here to listen to Nasi's comments.
The committee also heard from Anna Novak, a Hazen resident who has testified in support of other bills aimed at ensuring the future viability of the state's coal industry. Novak noted reports last week that the Leland Olds Station might be slated for closure, which combined with the planned closure of the 1,100-megawatt Coal Creek Station, would have made this week's outages much worse.
Click here to listen to Novak's comments.
WDEA also provided testimony in support of the bill. Click here to read testimony from John Weeda, director of the North Dakota Transmission Authority, in support of the bill. Click here to see the amended version of the bill. Click here to watch video of the committee hearing. Click here to read a Bismarck Tribune article about the hearing.
Massive Mining & Manufacturing Required
Visual Blight, Huge Waste Problem Would Result
An energy sector analyst says ideas such as the Green New Deal that promote the notion that the wind and sun could provide 100% of America’s energy needs, "is simply not possible, any more than it’s possible to use airplanes to fly to the moon."
Mark Mills, a Senior Fellow at the Manhattan Institute, told members of the U.S. House Subcommittee on Environment and Climate Change last week that the cost of complete grid restructuring would be far greater than popularly acknowledged.
"The Administration has proposed spending $2 trillion on climate programs across seven domains," Mills said, "But for the electric grid alone, analyses show we’d need at least $5 to $6 trillion in wind/solar and battery systems to replace existing hydrocarbon generation."
Mills said doing so by 2035 would require a continuous construction program at least 600% bigger than any single peak year for utility construction that has occurred in the U.S., China or Germany over the past half-century. He said it would also require an enormous expansion of the grid if a significant share of cars shift from oil to electricity.
Mills said grid restructuring and using more electric cars means exporting jobs and offshoring environmental consequences.
"Some 90% of solar panels are imported, as are 80% of the key components for wind turbines," Mills said. "Asian companies dominate global battery production and account for 80% of all planned factories, and even if we expand domestic manufacturing, our import dependencies remain for critical energy minerals."
In previous congressional testimony, Mills also pointed out that components of wind turbines and solar panels are not recyclable, ultimately creating a massive amount of garbage. America is already being challenged with the disposal of old turbine blades, but Mills said the International Energy Administration has also calculated that solar goals for 2050 consistent with the Paris Accords "will require disposing of solar panels that will constitute more than double the tonnage of all today’s global plastic waste."
Biden Anti-Oil Policy Chilling Investment
Crude oil prices on the WTI index crept above $61.00 for a brief period this week before settling back to close at $59.24 today. But despite the fact prices are actually higher than they were a year ago on this date when 56 rigs were running in North Dakota, the state has seen no additional drilling activity.
Lynn Helms, director of the Department of Mineral Resources, said there is one big reason the rig count is stagnant. Helms said oil producers are stymied by the uncertainty created by anti-oil sentiment in the Biden administration.
Click here to listen to Helms' comments.
Helms, who was interviewed today on the radio program What's on Your Mind, said the uncertainty is robbing the North Dakota economy of a lot of employment opportunities. He said if the state's drilling activity were aligned with the current market prices, hundreds of new jobs would be created.
Click here to listen to Helms' comments.
Helms said the potential shutdown of the Dakota Access Pipeline is the biggest threat hanging over the state. He said its shutdown and the increased cost of transporting oil would cost the economy about $5 million per day, which translates to lost tax revenue of $500,000 per day.
Click here and advance to the 32:45 mark to listen to the full What's on Your Mind interview with Helms.
Interest and Penalty Reduction on Royalties
The North Dakota House passed legislation this week that adjusts interest rates and penalties on unpaid royalty payments from mineral leases.
HB 1080 was introduced in response to a dispute that arose earlier this year over action by the Land Department to enforce language in the 40-year-old law that allowed the state to collect up to 18% interest and 12% in penalties on unpaid royalties. Ron Ness, president of the ND Petroleum Council, said the rates were unfair and should be more equitable with what other industries pay.
The legislation would reduce the maximum amount of interest and penalties the state can charge for late royalties to a base interest rate set by the Bank of North Dakota, plus 4%. The bill also extends the time before interest and penalties begin to accrue to 150 days. Existing law provided that charges would start on oil royalties after 30 days, and natural gas royalties after 60 days. The House vote was mostly along party lines, passing by a margin of 83-10. The bill now moves to the Senate.
In regard to unpaid royalty penalties, Ness said two lawsuits are currently underway involving Bakken oil producers over the rate dispute, and some companies are withholding payments pending the court decision.
Bismarck Rep. Jason Dockter, who introduced the bill in committee, said it would help create “a little more certainty with the Fed’s fund rate” as it relates to royalty payment penalties, plus bring the rates more in line with current economic conditions.
Click here for a previous article about the bill in the January 8 WDEA newsletter.
Commissioner to Land Board
North Dakota's agriculture commissioner would be added to the state Land Board if a measure passed by the Senate this week is approved by the state's voters.
SB 2282 would add the ag commissioner to the board, which is responsible for managing state land and minerals. And since adding a member to the board requires a constitutional change, SCR 4007 provides the mechanism to put the measure on the 2022 general election ballot.
Senator Jay Elkin, a rancher from Taylor, carried the two measures on the Senate floor. Elkin said the ag commissioner would be an asset to the board, and noted how a recent change in leasing auctions demonstrated the need for agricultural expertise.
Click here to listen to Elkin's comments.
Senator Kristin Roers of Fargo provided a counterpoint to Elkin’s remarks, pointing out a potential conflict of interest with the Bank of North Dakota.
Click here to listen to Roers' comments.
Both SB 2282 and SCR 4007 now head to the House where another similar bill awaits action. HCR 3016 proposes to add the ag commissioner to the board but also advances the idea of adding a member of the legislature. The bill received a “do not pass” recommendation from the House Government and Veterans Affairs Committee and awaits floor action. Another bill on the topic was decisively defeated. HB 1269 would have created a board of farmers and ranchers to advise the Land Board on leasing policies.
Click here for a Bismarck Tribune article on passage of the Senate measure.
Lt. Governor Casts Tie-Breaking Vote
The North Dakota Senate, by the narrowest of margins, gave its approval to a bill today that would create a process for the legislature to conduct annual sessions.
With one member absent, Lt. Governor Brent Sanford cast the tie-breaking vote on SB 2218, giving the bill a 24-23 margin of approval and sending it to the House for its consideration. North Dakota is one of just four states in which the legislature meets biennially in odd-numbered years. The others are Montana, Nevada and Texas.
A dozen senators offered comments or asked questions during 30 minutes of debate on the bill. Senator Jim Roers, a Fargo businessman, spoke of the difficulties faced by the loss of an employee for an 80-day session. Roers said it would be less challenging if it were spread over two years.
Click here to listen to Roers' comments.
The bill's sponsor, Williston Senator Brad Bekkedahl, cited the constitutional responsibility of the legislature to act on the state's budget, but said because lawmakers only meet once every two years, that authority has been delegated to a 43-member committee known as the Budget Section. Bekkedahl said the bill was crafted with maximum flexibility, and does not specify the length of each annual session.
Click here to listen to Bekkedahl's comments.
Bekkedahl disputed claims by opponents that it would detract from the concept of a citizen legislature. He said the length of the two sessions would still be constitutionally-limited to 80 days, so a suggestion that it would lead to a full-time legislature is unfounded.
One new element that would be added to the legislative process if the legislation becomes law is a bill review committee, which would meet in even-numbered years. Legislators would submit to the committee a copy of each bill they wish to introduce during the session, and the committee would prioritize the proposals based on the importance and time sensitivity of the bill's subject. Bills not prioritized by the committee could not be introduced during the session, but could be in the next odd-numbered year legislative session.
Information Can Already Be Found Elsewhere
The ND House overwhelmingly passed legislation this week to end a reporting requirement imposed on political subdivisions that receive a share of the state's Gross Production Tax (GPT).
HB 1179 would repeal a section of law that compels counties, school districts and hub cities to submit a detailed report of GPT revenues and expenditures to the state tax commissioner. Speaking in support of the bill on the House floor, Rolla Rep. Marvin Nelson said the legislature “loves reports” but if they are not used, they shouldn’t be required.
Click here to listen to Nelson's comments.
In earlier testimony before the House Political Subdivisions Committee, former McKenzie County Auditor Linda Svihovec, now a research analyst with the ND Association of Counties, said the data is readily available from other sources that provide more complete information than what is required in the reports.
Click here to listen to Svihovec's comments.
WDEA also provided committee testimony in support of the legislation. WDEA Executive Director Geoff Simon promoted the need for transparency, but said if the information is readily available elsewhere and no one is reading or requesting the reports, it makes sense to repeal the requirement.
Click here to listen to Simon's comments.
The bill passed the House 84-10 vote and now moves to the Senate.
80 MPH Speed Limit Bill Defeated Again
A bill to raise the speed limit on interstate highways to 80 mph and set a minimum speed of 40 mph, went down to defeat in the House this week. The chamber split the legislation into two sections, but both failed to receive a majority.
Similar legislation has been debated in each of the two previous sessions and supporters thought maybe this third time “was the charm.” The late Sen. Lonnie Laffen from Grand Forks first brought the issue to the 2017 Legislature. The bill was soundly defeated, receiving only six votes in the Senate. The legislation resurfaced in the 2019 Legislature and came close, garnering 46 votes in House.
But HB 1315 fared worse this year, receiving just 38 House votes in favor of the higher limit, and only 12 votes for the minimum speed.
Arguments for and against raising the speed limits have been similar in each session. Those supporting it cite convenience, plus the fact that most motorists on the interstate already drive at the higher speed. Fargo Rep. Ben Koppelman has been a proponent of the legislation in each of the last three sessions.
Click here to listen to Koppelman's comments.
Arguments against the higher speed limit have been consistent over the years with safety concerns topping the list, followed by the additional costs brought about by the potential change. Rep. Greg Westlind from Cando, said lower speed limits save lives and money.
Click here to listen to Westlind's comments.
NDIC Approves Grant for Innovative Project
The ND Industrial Commission approved a $500,000 renewable energy grant this week for a carbon dioxide-infused greenhouse project to be built adjacent to Great River Energy's Spiritwood Station east of Jamestown.
The project would pump waste heat from the 99-megawatt Spiritwood Station and carbon dioxide from the Dakota Spirit ethanol plant to a greenhouse that would produce tomatoes and cucumbers. The Spiritwood plant initially burned beneficiated coal from Coal Creek Station, but GRE announced last year that it was converting the power plant to natural gas.
Glass Investment is the project developer and operator of Houweling’s Tomatoes, a world-renowned commercial greenhouse tomato grower with facilities in California, Utah and British Columbia. Click here to view the project application submitted to the state Renewable Energy Council, and here to view the project slide presentation.
Jonathan Russo, Value-added Energy Business Development Manager with the ND Department of Commerce, said the research grant would cover work associated with developing the CO2 capture and transportation system.
Click here to listen to Russo's comments.
Russo said the project has potential to benefit both the state's energy and agriculture sectors.
Click here to listen to Russo's comments.
Total cost of this initial phase of the project is about $1.9 million. Total estimated project costs are between $30 and $35 million. Plans call for construction to start in spring 2021 with completion in August or September. The project application indicates the greenhouse would support 100 direct jobs, as well another 150 jobs during construction, and 145 indirect jobs the following year. The commercial greenhouse would cover 27 acres and produce nearly 20 million pounds (345,000 bushels) of produce per year. Production will be predominantly tomatoes, with cucumbers and peppers grown as markets demand. The produce would primarily be sold in the upper Midwest. Click here for a detailed article about the project from Hortibiz, an agricultural publication.
A similar project was proposed a few years ago adjacent to Coal Creek Station near Underwood. Click here to see an article in WDEA's April 6, 2018 newsletter about the proposal.
Bill Introduced to Block Biden Energy Ban
North Dakota's two U.S. Senators introduced legislation to prohibit the president or his secretaries of the Interior, Agriculture and Energy departments from blocking energy or mineral leasing and permitting on federal lands and waters without Congressional approval.
The Protecting our Wealth of Energy Resources (POWER) Act of 2021 is advanced by Senators Kevin Cramer and John Hoeven along with 23 other U.S. Senators. Cramer said that banning energy development has serious long-term consequences, plus makes the U.S. more reliant on foreign producers.
Click here to listen to Cramer's comments.
Hoeven said the the legislation would protect America's ability to use its abundant energy resources.
“By limiting the Biden administration’s efforts to impose a moratorium on federal energy or mineral leases, we are working to support good jobs, economic growth and energy security, while also maintaining an important source of revenue for federal, state and local government,” Hoeven said.
Biden’s Executive Orders include directing the Interior Department to halt new oil and natural gas leases on federal lands and to begin reviewing existing fossil fuel leases and permitting practices. It also orders federal agencies to look at eliminating fossil fuel "subsidies."
ND State School Superintendent Kirsten Baesler has named 23 students from across the state to her Student Cabinet, ranging from a third grader up to two high school seniors.
Baesler first formed the student cabinet in 2015, the members of which serve for about 18 months, meeting with the superintendent once every three months.
“My student cabinets have been an invaluable source of information and advice about what is good about our schools, and how things can be better,” Baesler said. “They have made their mark in improving education policy in North Dakota.”
Baesler said student cabinet meetings have been more frequent since the onset of the COVID-19 pandemic in April 2020.
“It has been especially important to hear from the Cabinet members during the pandemic,” Baesler said. “They have provided essential information and details about how COVID-19 has affected education in their schools.”
The new cabinet includes 23 students. Central and western North Dakota members include:
- Landon Pitner, a third grader at South Prairie Elementary in Minot;
- Toby Rule, a fifth grader at Solheim Elementary in Bismarck;
- Marley Lotvedt, a sixth grader at Kenmare Elementary in Kenmare;
- Silvana Dembiti, a seventh grader at Mandan Middle School in Mandan;
- Olivia Grote, a seventh grader at Simle Middle School in Bismarck;
- Tristan Orton, a seventh grader at Dickinson Middle School in Dickinson;
- Taylor Koster, a ninth grader at Century High School in Bismarck;
- Ayden Frohlich, a 10th grader at Legacy High School in Bismarck;
- Tyson Odermann, a 10th grader at Parshall High School in Parshall;
- Reilly Meyer, an 11th grader at Trinity High School in Dickinson; and
- Arianna Even, a 12th grader at Legacy High School in Bismarck.
Click here to view the DPI news release which includes the selection criteria.
Registration Now Open for In-Person Event
The Lignite Energy Council announced today that registration is now open 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.
Conference to be Live & In-Person
The Williston Basin Petroleum Conference is coming up in May, and hopefully it’s a sign of things to come since it will be a “live and in-person” event.
North Dakota Petroleum Council President Ron Ness said the conference will be an important time to get industry professionals together to talk about the future of energy and to share ideas and make valuable contacts.
For those unable to travel, the conference will be available to virtual attendees. Click here to register for the Williston Basin Petroleum Conference.
With blood banks around the region continuing to experience shortages, the ND Petroleum Foundation and Vitalant are stepping up to help organize several blood drives around the Bakken in the months to come.
The Foundation and the ND Petroleum Council are urging industry members and employees to help save a life by participating in one of the drives taking place in western North Dakota communities.
February 26: Tioga
March 6: Dickinson
- Power grid at the center of debate over ND's energy future -- Fargo Forum
- ND PSC calls on grid operators for power outage review -- Bismarck Tribune
- Plain Talk: 'We can't afford to shut down any more coal plants' -- Dickinson Press
- Port: Shortages an inevitable outcome of politicized energy policy -- SayAnythingBlog
- Burgum urges WAPA to provide more advance notice for outages -- Minot Daily News
- Green Freeze: Power shortages show folly of cutting coal/nat gas -- Wall Street Journal
- Oil prices rise above $60 as Texas pummeled with snow, ice -- KFYR-TV
- ND lawmakers call on President Biden to reconsider energy policies -- KXMB-TV
- U.S. Army Corps attorneys withdraw from Dakota Access Pipeline case -- Fargo Forum
- Natural gas plants and higher oil prices could spur drilling south of Tioga -- Tioga Tribune
- Enbridge Line 3 construction costs increase by $1.1B with regulatory delays -- Fargo Forum
- Hundreds of bills left to go through before legislative crossover -- Williston Herald
- Panel seeking ideas to spend Legacy Fund likely to remain -- Associated Press
- House scraps bill to use Legacy Fund for property tax relief -- Dickinson Press
- ND House passes bill to study lawmakers' expense reimbursements -- Bismarck Tribune
- ND Senate approves legislative budget with technology changes -- Prairie Public Radio
- Minot Public School District refinancing bonds; millions to be saved -- KFYR-TV
- House defeats bill to require seclusion and restraint policy in schools -- Bismarck Tribune
- ND Senate passes watered down bill emphasizing Native American studies -- Fargo Forum
- Dickinson Public Schools looking to continue with virtual learning option -- KFYR-TV
- Burgum waives service hours for propane, gasoline, diesel haulers -- Minot Daily News
- Minot's traffic lights have batteries to keep going during outage -- KXMB-TV
- 59 below temp recorded at Lake Metigoshe, verification underway -- Minot Daily News
- Teddy Roosevelt Presidential Library in design concept phase -- KFYR-TV
- Icy weather chills Texas wind energy as deep freeze grips much of U.S. -- Reuters
- "A complete bungle": Texas' energy pride goes out with cold -- Associated Press
- Blizzard exposes the perils of trying to 'electrify everything' -- Forbes
- Texas governor calls for an investigation of ERCOT energy policy -- Rigzone
- Achtung Baby! Germany's "green" energy fail rescued by coal and gas -- ZeroHedge
- Stopping oil/gas development on fed lands will hurt environment -- Energy In Depth
- Energy Transfer to buy Enable Midstream for $2.6B in natural gas push -- Reuters
- Equinor considers more US asset sales in global strategy revamp -- Reuters
- EIA forecasts U.S. will import more petroleum than it exports in 2021/2022 -- EIA
- California Democrat lawmakers propose ban on fracking by 2027 -- Associated Press
- TC Energy eyes growth in natural gas, power and storage businesses -- Reuters
- Some of Texas' biggest refineries could take weeks to restart -- OilPrice.com
Factoid of the Week
Source: Prager University
via Microsoft Teams
Hybrid: Online or in Bismarck
North Dakota Capitol
via Zoom platform
via Microsoft Teams
February 19, 2021
WTI Crude: $59.24
Brent Crude: $62.91
Natural Gas: $3.07
North Dakota Active Oil Rigs: 15 (Unchanged) 2/19/2020 -- 56 rigs