January 18, 2019 - Building Relationships
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Flags of the five North Dakota Native American tribes were taken into Memorial Hall of the state Capitol by an honor guard of veterans on Thursday.
The flags will now stand proudly outside the Governor’s office.
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Committee Hears "The People's Bill"
Opening his testimony before a standing-room-only committee hearing, Senate Majority Leader Rich Wardner characterized his Operation Prairie Dog legislation as “the people’s bill.”
The legislation,
HB 1066, provides oil-tax dollars to impacted communities in western North Dakota, and includes new “buckets” to deliver infrastructure funding to non-oil producing parts of the state. It was heard this week before the House Finance and Taxation Committee.
Wardner, a Republican from Dickinson, said many people were involved in developing the bill, a statement reinforced by more than two dozen witnesses who testified in support. He stressed the bill does not take revenue from the oil-producing region. Wardner said there is no change in the distribution percentages to oil-impacted counties, cities and school districts, so at today’s oil prices, they would continue to receive about the same amount they are currently receiving.
The key difference in the bill is that it does not contain a sunset clause, which works like an expiration date meaning the legislature would have to renew the funding measure every two years.
Rep. Todd Porter, R-Mandan, urged the committee to keep a sunset clause out of the bill because communities need funding certainty to plan future projects.
Click
here to listen to Porter’s comments.
House sponsor Mike Nathe, R-Bismarck, said he’s heard concerns that filling the infrastructure buckets ahead of the state’s Strategic Investment and Improvements Fund would leave few infrastructure dollars for the state. The bill would provide for two separate infrastructure buckets of $115 million each, one for cities and the other for counties and townships. Nathe said based on the current oil price projections of the legislature and the Governor’s Office, the SIIF would still realize between $400 and $500 million dollars in the 2019-21 biennium.
Click
here to see projected city payouts in non-oil regions, and
here to see county amounts.
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Tribal Oil Tax Revision Proposed
Legislation has been introduced in North Dakota that would give the Mandan, Hidatsa and Arikara Nation a larger share of tax revenue generated by oil production on the Ft. Berthold Reservation.
The state and tribe now split the oil tax 50-50, but
SB 2312 introduced by Senator Jordan Kannianen, R-Stanley, would instead give 80 percent of tax revenue from trust lands to the tribe and 20 percent to the state. On private fee lands, the split would also be 80-20 with the state receiving the larger share.
Kannianen, whose district includes most of the reservation, said he thinks the proposed change is fair to both parties and will be welcomed by the industry.
Click
here to listen to Kannianen’s comments.
Kannianen said it is estimated the legislation, which applies only to newly-completed wells, will shift an additional $33 million in oil taxes to the tribe in the coming biennium. But he said additional drilling activity will help everyone.
Click
here to listen to Kannianen’s comments.
Kannianen said passing the legislation is just the first step in the process. The deal would be finalized with a new compact between the state and MHA Nation.
Click
here to read more from Bismarck Tribune reporter Amy Dalrymple.
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ND Production Down Slightly in November
Normal Winter Slowdown Named as the Culprit
November oil production came in at 1.38 million barrels per day down from October’s all-time record of 1.4 million barrels. Natural gas production also dropped slightly to 2.52 billion cubic feet from the October record of 2.56 Bcf/day.
The volume of flared natural gas stayed flat from October to November with 80 percent of the Bakken-produced gas captured.
Lynn Helms, director of the Department of Mineral Resources, in the monthly “Director’s Cut” report, said operators “self-restricted” oil production by nearly 100,000 barrels per day in an attempt to reduce natural gas flaring. This restriction, he said, combined with 15 days of below-average temperatures and above-average precipitation in November were the reasons for the slight production downturn.
Click
here to listen to Helms comments.
“Oil prices are much better, WTI largely corrected itself later in the year so oil prices are improving,” Helms said. “Rig count has remained very solid so industry continues to be cautiously optimistic.”
Justin Kringstad, director of the North Dakota Pipeline Authority, provided an explanation of the price improvement
here.
Helms said the government shutdown is impacting the industry particularly with services from the BIA and the BLM. Click
here for a story from KFYR-TV on the issue. Helms concluded saying current plans from operators are to add one to five rigs in 2019 depending on workforce availability and infrastructure constraints.
Click
here to read Helms’ Director’s Cut report.
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IN JUST A DAY: 27 Million Gallons of Gasoline, 15 Million Gallons of Diesel Fuel
As Lynn Helms reported in his "Director's Cut", North Dakota produced 1.38 million barrels of oil and 2.52 BCF of natural gas per day in November.
According to the
Energy Information Agency, refineries produce about 20 gallons of gasoline and about 11 gallons of diesel fuel from a single barrel of oil.
The math is easy: This is over 27 million gallons of gasoline and more than 15 million gallons of diesel featuring -- at today's pump prices -- a total commercial value of $108 million. And, remember, this is just a single day of oil production in North Dakota.
Add daily natural gas production and you get $116 million. Roll that out for a full year and it comes to $42.4 billion.
This analysis excludes the value coming from the rest of the barrel that could be made into other products such as
fuel oils for heating and electricity generation; asphalt and road oil; and feedstocks for making the chemicals, plastics, and synthetic materials that are in nearly everything we use.
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Williston School Issues Explained
Facilities Needed to Attract Industry Workforce
The North Dakota Legislature will consider several bills this session aimed at providing more dollars to energy-impacted school districts struggling to provide adequate classroom space due to surging K-12 enrollment.
Williston School District #1 is at the top of the list of struggling districts. K-12 enrollment in the district has doubled in the past 10 years, but Williston has a very small property tax base from which to draw funding for building needs. In fact, at just 16 square miles, it is geographically the smallest district in the state. The community completed a new high school two years ago, but it is already exceeding its capacity. Just last week, voters in Williston narrowly rejected a $60 million bond issue that would have expanded the high school and added two new elementary schools.
Superintendent Jeff Thake told members of the Senate Education Committee this week that it’s a fairness issue for the students who have to cope with crowded classrooms, and a concern for parents and would-be teachers who move to the community to fill the huge workforce needs in the region.
“We need to find an equitable solution for our students,” Thake said. “We need to find an equitable solution also in order to recruit and retain staff members to come to Williston.”
Williston School Board President Joanna Baltes told committee members it’s not just a Williston problem. Speaking in favor of
SB 2160 and
SB 2161, she said workforce recruitment challenges make the community’s building needs a problem for the entire state.
“What does the future look like for schools in Williston if we cannot get property tax relief and find other sources of revenue to fund school construction?” Baltes asked. “We will continue to experience overcrowding … we will continue to lose teachers and … we will likely lose confidence from our business leaders in all industries, which will also lead to a loss of economic growth and sales tax revenue for the entire state.”
Several other western ND communities also have need for additional classroom space. Click
here for a story about needs in the Killdeer School District.
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Bill Floats Ferry Across Lake Sakakawea
The idea sounds novel but it really isn’t. North Dakota has a rich history of operating ferries mostly across the Missouri and Red Rivers.
Now,
HB 1352, introduced by Rep. Vicky Steiner, R-Dickinson, is reviving the idea to ferry motor vehicles across Lake Sakakawea connecting ND Highway 8 near Twin Buttes to the bank on the north side to ND Highway 1804 which gets travelers to Parshall to the north and Garrison to the east and beyond. The five miles and 30 minutes on the ferry could potentially save a 90-minute, 110-mile drive around the lake.
Click
here for Rep. Steiner's comments.
Right-of-way access needs to be granted from Three Affiliated Tribes of the Fort Berthold Reservation and some minor road improvements need to be completed to ferry access points. The bill requests a $10 million appropriation from the legislature.
Click
here for more comments from Rep. Steiner.
It’s estimated the ferry would require about $716,000 annually for operating costs which are expected to be recovered in ferry fees. The ferry would only transport motor vehicles and light trucks with trailers. It would not be designed for heavy multi-wheel load-hauling trucks.
Click
here to review the feasibility study on the project.
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Road Train Pilot Project Discussed
Semi-trucks pulling more than one trailer are a common sight in North Dakota, but now the state legislature is being asked to consider a pilot project to study “road trains” which would tow several more trailers.
The legislation,
SB 2176, was introduced by Senator Larry Luick, R-Fairmount. Luick said road trains are a common sight in Australia and some European countries. He said it’s an efficient means of moving freight and would help alleviate problems associated with the shortage of truck drivers. Luick said the study would determine the feasibility of the concept in North Dakota.
Click
here to listen to Luick’s comments.
Most of the testimony before the Senate Transportation Committee focused on the movement of ag commodities. But Luick said the concept could be applied to the movement of many other products including those on roads in the oil patch.
Click
here to listen to Luick’s comments.
There was no opposition to the bill in committee. It was supported by several witnesses including ND Ag Commissioner Doug Goehring.
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Corridors of Commerce Bill Proposed
Legislation Could Benefit Hwy 85 Development
It seems that every North Dakota legislator has a plan to spend earnings from the state’s Legacy Fund, but a western North Dakota Senator has come up with an idea that could help alleviate congestion on some of the busiest highways in the state.
SB 2268, introduced by Senator Dale Patten, R-Watford City, would direct the ND Department of Transportation to develop a “corridors of commerce program.” The bill would enable the state’s public finance authority to lend money to the DOT for the program. Patten said the goal of the bill is simple: improve and maintain highways that improve freight transportation and facilitate commerce.
Click
here to listen to Patten’s comments.
Although Highway 85 in western North Dakota is not named in the legislation, Patten said it could certainly benefit from the corridors of commerce program. Plans are being developed to widen Hwy 85 to four lanes between Belfield and Watford City. The first piece of that project, replacing the Long X bridge over the Little Missouri River, could go to bids as early as April.
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Progress on the New Williston Airport
Construction is moving along on the new Williston Basin International Airport. The new airport is expected to open October 10, 2019. A grand opening event will be held earlier for the general public.
New videos featuring construction progress can be found on the Williston Economic Development
YouTube pages.
For updated information on progress throughout the year, see the XWA Project
website.
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How About A Logo Contest?
Nelson Disappointed with New Design
Is it legendary? Rep. Marvin Nelson doesn’t think so. He’s talking about the newly designed and implemented North Dakota logo.
Nelson, D-Rolla, wants to encourage development of a replacement through a contest invoking the talents of graphic designers from all over but most especially from North Dakota. His bill,
HB 1457, would complete the redesign in time for the 2020 Travel Guide.
Click
here for comments from Rep. Nelson.
The contest would be administered by the Department of Commerce which would establish necessary criteria, requirements and submission rules. His bill would award the first-place winner $50,000, the second-place finisher $25,000, and $5,000 each to the third through fifth place contest winners.
Click
here for more comments from Rep. Nelson.
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Watford City and McKenzie County
January Update Shows Substantial Growth
There’s only word to describe the economic growth happening in McKenzie County. Stunning. The January 2019 “Economy at a Glance” from the McKenzie County Economic Development office highlights the updated statistics:
Taxable Sales and Purchases in McKenzie County jumped 51 percent from the third quarter 2017 to the same period in 2018 climbing from $57.7 million to $87.3 million.
Building permits in Watford City tripled from the nine reported in Dec. 2017 to 26 reported in Dec. 2018.
City Sales Tax in Watford City increased over 50 percent from $3.0 million (YTD 2017) to $4.6 million (YTD 2018) while restaurant and lodging tax jumped by one-third.
The apartment occupancy rate in Watford City – Brookledge now stands at 95 percent, the same as in Dec. 2018 but up from 64 percent and 27 percent in Jan. 2017 and Jan. 2016, respectively.
“Looking back at data over the past year helps confirm statistically what we have been experiencing here; an increase in activity," said Daniel Stenberg, McKenzie County Economic Development Coordinator. "Our stores, roadways, and schools have all been operating at a brisk pace. We look forward to what this next year brings in terms of the new opportunities that this activity brings."
Click
here for the January 2019 Watford City/McKenzie County “Economy at a Glance.”
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2019 Session Bill Count Tops 900
With the North Dakota Senate bill filing deadline yet to arrive on Monday, legislators have already introduced 908 bills and resolutions in the 2019 session.
The Western Dakota Energy Association is tracking nearly 200 of the measures for its county, city and school district members. Bills of interest recently introduced include:
- HB 1332 allows schools to enact an "armed first responder" program, designating a trained individual for that purpose.
- HB 1375 requires party affiliation to be assigned to candidates in city and county elections.
- HB 1432 raises bid threshold for county road maintenance equipment from $50K to $100K.
- HB 1438 directs the Industrial Commission to require a bond for the reclamation of a well site.
- HB 1480 directs DOT to set up compressed natural gas fueling stations in specific locations and transition state fleet to run on CNG.
- SB 2214 establishes $250 million school construction assistance revolving loan fund to provide 2% loans from Bank of North Dakota.
- SB 2288 would raise motor fuel tax seven cents per gallon.
- SB 2310 would subject school board members to a random drug test once a year.
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WDEA Exec to Host Talk Radio Show
WDEA Executive Director Geoff Simon will fill in as guest host next week on the radio talk show,
What’s on Your Mind.
Simon will be interviewing guests live from the North Dakota Capitol on Monday, January 21. The program is broadcast from 9:00 to 11:00 a.m. on several North Dakota stations including KFYR 550 AM in Bismarck and AM 1100 The Flag in Fargo.
Three legislators will be among Simon’s guests on the program. Williston Senator Brad Bekkedahl will discuss legislative issues at approximately 9:45 a.m. The second hour will feature Senator Curt Kruen from Grand Forks at 10:30, and Rep. Craig Headland from Montpelier at about 10:45.
Click
here to learn more about the program.
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Quick Connect
- Crews respond to large explosion at saltwater disposal site -- KFYR-TV
- Bill directs Legacy Fund earnings to boost university research -- Fargo Forum
- Stakeholders see economic potential for vacant buildings in downtown Minot -- Minot Daily News
- Study finds storing natural gas underground may be economically feasible -- Bismarck Tribune
- MinnKota Power: 2019 critical year for carbon capture and Project Tundra -- Grand Forks Herald
- Public money questioned for Roosevelt Library as timing becomes an issue -- Associated Press
- Substantial increase in passenger boardings at western ND airports for 2018 -- KXMB-TV
- Billings County School Board approves four-day school week, needs state approval -- KFYR-TV
- Bill seeks increased liability limits for local governments in North Dakota -- Fargo Forum
- Legislators discuss oil and gas taxes to fund city/county infrastructure projects -- KFYR-TV
- No funding shift: State Water Commission defends flood project budget -- Minot Daily News
- Landowners' donation seeks to protect land from brine contamination -- Bismarck Tribune
- New report shows robust natural gas and oil industry commitment to workplace safety -- API
- U.S. breaks all-time monthly oil production record in January by big margin -- Energy In Depth
- Anti-fossil fuel campaign cost America $91.9 billion in lost economic activity -- Inside Sources
- Europe to see big rise in US crude oil imports in February to continue trend -- SPG Global Platts
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Factoid of the Week
The ND Capitol is huge, 241.8 feet tall, and approximately 100 feet square. But if the tower was an empty container, its 2,418,000 cubic feet could hold only about one-third of North Dakota’s 1.38 million barrel daily average oil production. That amount of oil would occupy a space of nearly 7,750,000 cubic feet.
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January 22
Lignite Energy Council legislative reception
Ramkota - Bismarck
January 22
Bismarck
January 23
Bismarck
January 28
Capitol
January 29-31
Grand Forks
January 30 - February 1
Minot
February 9
Williston
February 12-13
Bismarck
February 16
Dickinson
February 25-26
Dickinson
March 27
Watford City
July 16-17
Bismarck
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Oil prices and rig count
January 18, 2019
WTI Crude: $53.80
Brent Crude: $62.70
Natural Gas: $3.48
North Dakota Active Rigs: 68 (up 1)
1/18
/2018
-- 58 rigs
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Geoff Simon
Editor/Executive Director
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