The angle of a power plant's water vapor plume is an indicator of wind speed and direction. In this photo of Milton R. Young Station, the wind was out of the southeast at 14 mph.
Utilities Could Be Penalized for Outages
North Dakota legislators and coal country representatives continue to battle with the state's utilities in an effort to establish policies in law that will prevent future power blackouts.
Members of the House Energy and Natural Resources Committee were presented with an amendment to SB 2313 that would allow the Public Service Commission to assign "qualitative benefits" of generation resources and their role in ensuring grid reliability. PSC Chair Julie Fedorchak said different forms of generation have different attributes, and that value should be recognized.
Click here to listen to Fedorchak's comments.
The legislation contains a provision, opposed by investor-owned utilities, that would allow the PSC to disallow cost recovery or impose penalties if a public utility fails to provide reliable service. Fedorchak said the PSC should have authority to make sure the utilities are doing what's best for the state's consumers.
Click here to listen to Fedorchak's comments.
The Western Dakota Energy Association testified in support of the amendment. WDEA Executive Director Geoff Simon said it's important that the legislature send a message to utilities and the regional transmission organizations (RTOs) that serve the region that when it comes to keeping the lights on, the state means business.
Click here to listen to Simon's comments.
Hazen resident Anna Novak, whose husband works in the coal industry, echoed Simon's comments. Novak said there is a lack of accountability among electric industry participants, and the proposed amendment would correct the situation.
Click here to listen to Novak's comments.
The language in the bill would apply only to the state's three investor-owned utilities, and not the electric cooperatives. A subcommittee was appointed to try to work out differences between the utilities, the PSC and other interested parties.
Click here to read a Bismarck Tribune article on the hearing.
“Bullishly Optimistic” About a Deal
Congressman Kelly Armstrong and state policy leaders participated in a wide-ranging discussion of energy issues this week in a roundtable hosted by KVLY-TV’s Chris Berg, host of “Point of View.”
The 45-minute roundtable, which was streamed on social media channels, touched on several topics impacting North Dakota’s energy future, but the one that drew the most discussion was the future of Coal Creek Station.
Coal Creek at 1,100-megawatts is the largest coal-fired electric generating station in the state, but is currently slated for closure by Great River Energy in 2022. It would result in the loss of 740 jobs at the plant and the associated Falkirk coal mine, and the lost generating capacity could have significant effects on electric reliability.
Commerce Commissioner James Leiman said his agency has been working with several partners to find a new owner for the facility, and is “bullishly optimistic” about the progress.
Click here to listen to Leiman's comments.
Charles Gorecki, CEO of the Energy & Environmental Research Center, said his team has been working to enhance technology to capture carbon dioxide emissions from coal plants. Gorecki said CO2 capture technology already exists, and holds the potential to extend economic opportunities for the new owner.
Click here to listen to Gorecki's comments.
Last month’s energy crisis in Texas demonstrated how baseload generation is critical to the electric power grid. Ron Ness, President of the North Dakota Petroleum Council, said reliable electric power is an absolute necessity in North Dakota’s oil fields. He said the Texas crisis shows current vulnerabilities in grid reliability.
Click here to listen to Ness' comments.
Rep. Kelly Armstrong, a member of the Energy & Commerce Committee and the Select Committee on "Climate Crisis," said the role of Congress is to ensure that federal regulatory roadblocks don’t stand in the way of a successful transfer of Coal Creek to a new owner.
Click here to listen to Armstrong's comments.
Other topics covered in the discussion included the Dakota Access Pipeline, the ethanol industry, the Keystone XL Pipeline, extraction of rare earth minerals, and economics of the Bakken oil industry. Click here to watch the roundtable video on YouTube.
Oil Production Flat, But Prices Are Better
State budget forecasters don't expect a surge in drilling activity anytime soon, but based on the current rig count, production is expected to remain fairly stable around 1.1 million barrels per day in the coming biennium.
The legislature's House and Senate Appropriations Committee heard presentations this week from financial consultants Moody's Analytics and IHS Markit to assist the state's budget planners determine how much revenue the state can expect to collect in the next two years.
Moody's Analyst Dan White said oil demand is gradually recovering from losses due to the pandemic, and crude prices have increased as well. But White said he expects North Dakota oil producers to remain cautious about investing capital in expanded drilling until they're confident prices will remain in the $50/barrel or higher range.
Click here to listen to White's comments.
White said Moody's believes the price of crude oil will generally remain in the $55 to $65 range, but expects it to slip in coming months as more supply is brought into the global market.
Click here to listen to White's comments.
State OMB Director Joe Morrissette told committee members the consensus view among members of the state Revenue Advisory Committee was that oil prices would average $53.50 in the coming year, and fall to $48.75 the following year, with production remaining flat at 1.1 million barrels per day.
The House and Senate Appropriations Committees were expected to adopt a new revenue forecast yesterday, but apparently due to internal disagreement, have postponed the decision until Monday. The current legislative forecast expects oil prices realized by North Dakota producers to remain around $40/barrel through the coming biennium, and production to decline to 1.1 million barrels per day this year, and drop to 1 million bbl/day in the second year of the biennium.
Technology Development Key to Future
Legislation aimed primarily at promoting the future viability of North Dakota's oil, gas and coal industries received its first hearing this week in the Senate Energy and Natural Resources Committee.
HB 1452 would establish a clean sustainable energy authority with $40 million in seed money to get it started. The bill's prime sponsor, Bismarck Rep. Glenn Bosch, said the legislation is intended to support research and implementation of 21st century technologies to reduce emissions and reduce the environmental footprint of energy production.
Click here to listen to Bosch's comments.
Ron Ness, president of the North Dakota Petroleum Council, said the authority would focus on preserving and promoting the state's fossil fuel industries, as well as incorporating high-tech methods of using other sources of energy.
Click here to listen to Ness' comments.
The legislation is largely the work product of the state's EmPower Commission, which would serve as a resource to the authority to advance low-emission technologies, and address impacts of environmental, social and governance policies that affect the industries' financial and capital markets. The commission would also make policy recommendations to ensure the availability of affordable, reliable and resilient energy.
The authority is modeled after the existing Oil & Gas Research Council, Lignite Research Council and Renewable Energy Council. The bill provides for an eight-member authority, one of whom would be appointed by WDEA. It would also establish a non-voting technical advisory group.
Rep. Bosch suggested several amendments to the bill in his testimony this morning. Click here to see the "Christmas Tree" version of the bill with the proposed amendments.
Industry Contribution Tops $22 Billion
Since the rapid emergence of horizontal drilling and hydraulic fracturing in the Bakken in 2008, North Dakota oil producers have contributed more than $22 billion in tax revenue to the state's coffers. The benefits of that enormous tax contribution are enjoyed by the citizenry in every corner of the state.
Separate studies released this week show that in 2019, the oil and natural gas industry in North Dakota accounted for more than $40 billion in gross business volume, nearly 60,000 jobs and over $3.8 billion in state and local tax revenues.
“These studies underscore the critical importance of the oil and gas industry to our state’s budget, economy and communities, as well as the need for state and federal policies that encourage responsible development of our abundant mineral resources,” Lt. Gov. Brent Sanford said during a news conference at the Capitol.
A separate study conducted on behalf of WDEA and the ND Petroleum Council revealed that from fiscal years 2008 to 2020, tax revenues from the oil and gas industry in North Dakota totaled $22.3 billion. That revenue provided $8.2 billion for local communities and infrastructure, nearly $1.6 billion for K-12 education, over $1.2 billion for water and flood control projects, $879 million for local transportation projects, $440 million for property tax relief and $29 million for outdoor heritage projects across the state. The revenue stream is also responsible for the $8 billion balance in the state's Legacy Fund, which receives 30% of all extraction and production taxes.
“Our report shows that every county in North Dakota continues to receive revenue derived from the state’s oil and natural gas production and extraction taxes,” said Brent Bogar, senior consultant with AE2S, who led the study.
The statewide impact study developed by NDSU researchers Dean Bangsund and Nancy Hodur shows North Dakota’s oil and gas industry directly employed nearly 24,000 people in 2019, while economic activity from the indirect and induced effects of the industry supported an additional 17,000 and 18,000 jobs. Employment compensation, which includes wages, salaries and employee benefits, was estimated at $4.5 billion.
“What we've learned over the last decade is that the North Dakota oil and natural gas industry is incredibly resilient,” said Bangsund, research scientist in agribusiness and applied economics at NDSU. “Regardless of market conditions, it continues to be a major force in our state's economy.”
During an interview yesterday on the radio program What's on Your Mind, Gov. Doug Burgum was asked to comment on the oil tax distribution study. Click here to listen to his response.
A four-page handout summarizing the oil tax distribution study was distributed to legislators and those attending Tuesday's news conference. Click here to read or download the handout. Click here to read a Williston Herald article about the news conference.
Costs of Natural Gas Processing at Issue
Costs of post-production royalty deductions mostly related to the handling of natural gas associated with Bakken oil production have become an issue in North Dakota’s oil patch, and state legislators are struggling to address the problem.
An amended version of SB 2217 previously passed the Senate, ultimately creating a bill that sought a middle ground between producers and royalty owners for post-production expenses. The Senate version would have prohibited companies from taking post-production costs from royalty payments unless it is specifically covered in the lease agreement between the royalty owner and the producer.
But this week, the House Energy and Natural Resources Committee hoghoused the bill, leaving only an interim study of the issue.
The bill's sponsor, Williston Senator Brad Bekkedahl, said many of the changes he sought in order to preserve the original intent of the legislation were not accepted in Senate committee discussions. As an alternative, he proposed the study amendment saying it would provide an opportunity for the issues to be fully debated in the interim and allow the public and the industry to try to resolve the issue.
Click here to listen to Bekkedahl's comments.
The North Dakota Petroleum Council opposed the original bill but supported the study in the amended version. The bill received a “do pass” recommendation from the House Energy and Natural Resources Committee and will be considered on the House floor next week.
Click here for an article on the legislation from the Feb. 12 issue of the WDEA newsletter.
Suit Says White House Has No Authority
Texas Attorney General Ken Paxton and Montana Attorney General Austin Knudson filing a multistate complaint this week against the Biden administration for revoking the 2019 Presidential Permit for the Keystone XL pipeline.
The lawsuit, supported by 19 other state attorneys general, states that Biden does not have the unilateral authority to change energy policy that Congress has set. The suit says power to regulate interstate and international commerce, including granting or rejecting permits for oil pipelines that cross an international border, resides with Congress, not the President.
“Since his first day in office, President Biden has made it his mission to undo all the progress of the previous administration, with complete disregard for the Constitutional limits on his power," Paxton said. “This administration continues to tout imaginary green-energy jobs, without any recognition that their actions in the real world will make it impossible for hard-working Americans to put food on the table.”
"This is another example of Joe Biden overstepping his constitutional role to the detriment of Montanans,” Knudson said. “There is not even a perceived environmental benefit to his actions ... (it) is an empty virtue signal to his wealthy coastal elite donors."
North Dakota Congressman Kelly Armstrong, when asked about the issue in this week's energy roundtable, said he hopes the lawsuit is successful.
Click here to listen to Armstrong's comments.
The suit was joined by attorneys general from Alabama, Arkansas, Georgia, Indiana, Kentucky, Louisiana, Mississippi, Missouri, Nebraska, North Dakota, Ohio, Oklahoma, South Carolina, South Dakota, Utah, and Wyoming. Click here to read the lawsuit.
Save the Date: May 6 Western Roads Event
An event that will bring together oil industry trucking interests and county and tribal road managers to discuss ways to improve the movement of oilfield traffic will be held May 6 in Halliday.
WDEA is teaming up with the Upper Great Plains Transportation Institute and its Local Technical Assistance Program (LTAP) to host a roundtable discussion at the new Dunn County highway shop in Halliday. The event will run from 9:00 a.m. to 3:00 p.m. MDT and will feature a variety of topics aimed at improving communication between industry and the counties, and improving the efficiency of operations for both.
The agenda for the event is still being finalized, according to LTAP Director Dale Heglund, but he said road and bridge construction and maintenance needs will at the top of the list.
"We'll describe needs specific to western North Dakota, whether it be roads, bridges, culverts or repairing frost boils," Heglund said, "and we expect frost law seasonal road restrictions to be a topic as well.
WDEA and LTAP are working on a research effort that uses temperature and moisture sensors embedded in gravel roads to get a better handle on the rate at which roads firm up after the spring thaw, possibly reducing the period of time in which restrictions are in place.
The roundtable will also feature panel discussions about the oil industry's future and the ways in which local government can assist. The full agenda for the event and registration information will be released next week.
County Road Info Available from LoadPass
The ND Department of Transportation this week placed seasonal load restrictions on all remaining North Dakota highways effective today.
Depending on weather conditions, the "frost law" weight restrictions typically remain in effect until roadbeds have stabilized enough to carry normal traffic, generally in mid- to late-May. Detailed load restriction information for state roads is available by calling 511 or online at ND Roads.
Information about local road restrictions in counties that participate in WDEA's LoadPass Permits system is available in an interactive and searchable map. Users can click any area of the map to get a quick rundown of restrictions in that area. LoadPass also features a detailed county-by-county notification list of load restrictions.
Motorists are always encouraged to check state and county load restriction information as restrictions may change quickly due to adverse weather.
Extreme Category in Western ND
Most North Dakotans would consider a lack of winter snowfall a welcome relief, but as spring arrives, farmers and ranchers anxious to plant crops and graze cattle are hoping the precipitation picture changes soon.
The National Drought Monitor lists parts of northwestern and central North Dakota in the extreme drought category, and all but the eastern edge is considered to be experiencing severe drought. That should surprise no one, considering the past six months have been the driest ever in North Dakota since record-keeping began in 1895. About the only positive thing that can be said about weather statistics is that the 90-outlook gives the state about a 50-50 chance of receiving normal seasonal precipitation.
A strong storm system brought widespread heavy precipitation to parts of the Rockies and Central Plains this week, but the northern third of South Dakota and all of North Dakota missed out on the drought relief. The US Drought Monitor indicates that if below normal precipitation persists later into the spring when temperatures warm, rapid intensification of drought conditions may occur.
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
Bakken CEOs and Executives Lined Up
The agenda for the 2021 Williston Basin Petroleum Conference has been released featuring over 70 speakers and presenters, each sharing insights on the latest issues impacting oil and natural gas development and what the future holds for the Williston Basin.
The conference, scheduled for May 11-13, is the largest conference in North Dakota with major networking opportunities for energy industry professionals.
“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 feature CEOs and executives from 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 API – "The State of American Energy"
Click here to view the agenda.
WBPC is partnering with Sanford Health Bismarck to host a COVID-Conscious conference. Meeting organizers plan to monitor the situation and take recommended precautions to ensure the health and safety of all conference attendees.
Registration Now Open for In-Person Event
The Lignite Energy Council has announced 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.
Applications Now Accepted
Attracting workers to North Dakota is essential to help meet the state’s current and future workforce needs, providing students a connection with businesses and career options in the state.
Operation Intern is designed to expand the number of internships, work experience and apprenticeship positions with North Dakota employers. The program is focused on employers in the state’s targeted industries: energy, advanced manufacturing, value-added agriculture, tourism and technology-based businesses. Priority also is given to new start-ups, companies that never have participated in the program and new internship or apprenticeship positions or whose intern positions qualify as in-demand positions.
North Dakota businesses receive up to $4,000 in matching funds for the internships. Funding can be used for items needed during internships including wages, tools and equipment, training or tuition reimbursement. The funding requires a one-to-one match.
- Bonding bill could regain lost funds with Wardner amendment -- KFYR-TV
- 'Legacy Fund' bill gaining support among cities and counties -- KFYR-TV
- Bridger seeks pipeline permit, providing alternate route out of ND -- Williston Herald
- Biden's candidate for interior secretary has North Dakota divided -- Fargo Forum
- ND tribes, senators weigh in on Haaland confirmation to head Interior -- Bismarck Tribune
- PSC encourages AARP, MDU to return to rate case negotiations -- Williston Herald
- Jane Fonda jets to Park Rapids to voice opposition to Line 3 -- GF Herald
- Shale producers find themselves in unusual position as prices surge -- Rigzone
- In a first, US pipeline agency weighs climate change impacts -- Associated Press
- Rep. Dori Hauck is sworn in to former Rep. Luke Simons’ seat -- KFYR-TV
- Critics say rail facility bailout would help Hoeven’s bank -- Associated Press
- House committee puts a 'do-not-pass' on primary seat belt enforcement bill -- Prairie Public Radio
- Bill seeks royalty compromise between state and oil/gas companies -- KXMB-TV
- Voting bills before ND Legislature in wake of 2020 election -- Bismarck Tribune
- Legislative leaders hope to save up to 8 days for redistricting -- Prairie Public Radio
- ND Senate passes bill to free business from COVID litigation -- KFYR-TV
- Daylight Savings Time bill passes in ND Senate -- Prairie Public Radio
- Efforts to keep daylight saving time permanent on state and national scale -- KXMB-TV
- North Dakota Democratic-NPL Party chairwoman won't seek 4th term -- Bismarck Tribune
- North Dakota delays tax day by a month following IRS announced delay -- Williston Herald
- Williston Airport continues to see ‘Modest’ growth, optimistic on Delta return -- KFYR-TV
- Dunn County launches site for mental and behavioral health resources -- KFYR-TV
- North Dakota senators hear of potential risks in transgender sports bill -- Bismarck Tribune
- Divide County School Board OKs hosting prom, concerts and ball -- Crosby Journal
- Tioga hosts very popular STEMzone activities in school -- Tioga Tribune
- DSU to hold in-person spring commencement ceremony -- KFYR-TV
- Texas rejects ESG movement, strikes back at the anti-fossil-fuel lobby -- OilPrice.com
- Renewable portfolio standards do not deliver cost-effective CO2 reductions -- Real Clear Public Affairs
- Biden’s halt of drilling on federal land has lawmakers demanding answers -- Fox Business News
- Biden may get his wish, some forecasters see $100/barrel oil on the horizon -- IER
- Op-ed: Texas blizzard is a preview of Biden's blackout agenda -- Inside Sources
- China emits more carbon dioxide in 16 days than Australia does in a year -- Western Journal
Factoid of the Week
via Zoom platform
via Microsoft Teams
via Microsoft Teams
Dunn County Highway Shop - Halliday
March 19, 2021
WTI Crude: $61.42
Brent Crude: $64.53
Natural Gas: $2.54
North Dakota Active Oil Rigs: 16 (Up 1) 3/19/2020 -- 52 rigs