October 23, 2020 -- Frozen Fairfield

Members of the North Dakota Emergency Commission today approved a plan to repurpose $16 million in CARES Act dollars for a program that will encourage oil well completion.

The proposal was developed by the Bakken Restart Task Force to incentivize the completion of DUCs - drilled but uncompleted wells - in the Bakken. Lynn Helms, director of the Department of Mineral Resources, said the program would provide up to $200,000 to offset the cost of the water that is used in the hydraulic fracturing process to bring the wells into production. Helms said the task force focused on water because it is the primary component in fracking that benefits North Dakota-centric companies.

Click here to listen to Helms' comments.

Helms said at the current rate, about 80 new wells would be completed by year's end. He said the incentive will produce 80 additional completions, and he expects there will be plenty of companies with DUCs that will claim the incentive.

Click here to listen to Helms' comments.

There are not enough well completions occurring to maintain the state's current 1.2 million barrel per day production. But Helms said the 80 additional wells should stabilize production well into 2021.

Click here to listen to Helms' comments.

Helms said each new well completion will generate an average of $1.6 million in production and extraction taxes, $150,000 in sales tax revenue, $1.1 million in salaries, and $2.4 million in royalties.

"I think it's probably pretty safe to say this has got the highest return on investment of any of the dollars we've spent out of the $1.25 billion (in CARES Act dollars) because this is money we get back and a lot more that will help us when we're trying to balance budgets in the biennium that's in front of us," said Governor Doug Burgum, who chairs the Emergency Commission.

Membership of the commission consists of the Governor, the Secretary of State, the Majority Leaders of the ND House and Senate, and the chairmen of the Senate and House Appropriations Committees. The decisions approved today by the Emergency Commission require subsequent approval of the Legislative Budget Section, which meets next week.

The DUC incentive described above was part of a total of $221 million in turnback from the state's $1.25 billion share. The turnback included $90 million from the Bank of North Dakota, $50 million from unemployment insurance, $33 million from the Department of Health and $17 million from the Department of Emergency Services.

Under the reallocation approved today, K-12 school districts will receive nearly $34 million, on top of the $30 million previously allocated. The $64 million will be paid out directly to school districts utilizing a base payment amount and a per pupil distribution.

Cities and counties will also receive over $61 million, in addition to the $59 million previously distributed as a reimbursement for law enforcement payroll and the $20 million for local public health units.

An additional $49 million will be provided to support business recovery across the state through the Department of Commerce and the Bank of North Dakota. The reallocation includes $29 million to Commerce, in addition to the repurposing of approximately up to $25 million for a total of $54 million to be distributed to businesses within the hospitality and entertainment industries who have been most directly impacted by COVID-19 pandemic guidelines.

Two of North Dakota's representatives in Congress had strong words for remarks made by Democrat nominee Joe Biden in last night's presidential debate during which Biden said that he would "transition away from the oil industry."

In a tweet in which he shared a Wall Street Journal article about a portion of the debate devoted to climate change, Senator Kevin Cramer characterized a Biden presidency as "an energy disaster waiting to happen." President Donald Trump prompted the discussion when he said Biden's climate-change plan, which calls for the U.S. to have net-zero carbon emissions by 2050, would hurt the oil industry and the U.S. economy. 

“The oil industry pollutes, significantly. It has to be replaced by renewable energy over time,” Biden said. Trump responded: “Basically what he is saying is he is going to destroy the oil industry.” 

Congressman Kelly Armstrong, in a tweet sharing remarks by House Minority Leader Kevin McCarthy, R-California, pointed out that 60 to 70 percent of North Dakota’s budget comes from oil revenue, which he said "keeps schools open and social services running.'

"I guess appeasing the far Left comes before communities’ livelihoods," Armstrong quipped.

The ND Industrial Commission has approved up to an additional $250,000 in grant funds from the Lignite Research Council to expand a research project looking into storage of carbon dioxide on the site of Coal Creek Station in McLean County.

The money will allow additional work on an existing carbon storage project for Blue Flint Ethanol, which is powered by steam from the coal plant. NDIC previously approved a $3.4 million grant to help pay for drilling a test well near the ethanol plant to explore underground formations to determine their suitability for storing carbon dioxide.

Mike Holmes, vice president of research and development for the Lignite Energy Council, said Blue Flint is planning to examine the Inyan Kara Formation at a depth of 4,500 feet and the Deadwood Formation at 10,000 feet. But Holmes said if CO2 capture was developed for Coal Creek Station, geologists recommended expanding the scope of work to study a larger portion of the deeper formation.

Click here to listen to Holmes' comments.

Coal Creek Station is currently scheduled to be shut down in 2022 unless a buyer is found. State officials say that developing technology to capture and store the plant's CO2 emissions to take advantage of federal tax credits could improve the financial viability of its ongoing operation.

Members of the Mercer County Commission heard an impassioned plea this week to keep in place a moratorium on wind farms that was adopted earlier this year.

Anna Novak, a Hazen resident whose husband works in the lignite industry, said she understands commissioners are being pressured to lift the moratorium by wind industry lobbyists, wind developers and landowners who would benefit from wind turbines on their property. But Novak said despite the political pressure, commissioners should recognize that the coal industry supports 14,000 jobs in North Dakota, many of which are in Mercer County. She said the industry can't be taken for granted, and elected leaders should do all they can to protect it and make it viable long-term.

The county commission earlier this month heard a presentation from representatives of North Dakotans for Comprehensive Energy Solutions, a wind industry lobbying group, who said because of the moratorium, the county could lose the 151-megawatt Garrison Butte wind farm proposed to be built north of Hazen. Commissioners were urged to consider granting an exception to the moratorium to allow developer Capital Power to proceed with construction of the wind farm.

But Novak said because of the intrusion of subsidized wind energy in the market, 750 workers could lose their jobs if Coal Creek Station is shut down. She said she empathizes with those who want additional wind development, but said allowing it would further erode the market for coal generation.

Click here to listen to Novak's comments.

Novak said some Mercer County landowners would benefit from wind farm development, but cautioned that thousands of people could ultimately be adversely affected if Coal Creek Station and other plants are forced to close. She reminded the commission of the 400 letters presented to the county from residents who support the moratorium, which she said reflects the opinion of a majority of the county's residents.

Click here to listen to Novak's comments.

Novak said because decisions about energy generation have the potential to impact thousands of people, the county should give the state legislature time to consider how additional wind development will affect the viability of the state lignite industry.

Mercer County Commission meetings are recorded and uploaded to YouTube. Click here to view the October 21 meeting, and advance to the 2:06:40 mark to hear Novak's testimony.

North Dakota’s lignite industry continues to provide several economic benefits to the state through its high-paying jobs, business activity and tax revenue, according to NDSU Department of Agribusiness and Applied Economics, which is completing an updated economics assessment of the lignite industry.

Dean Bangsund, an NDSU research scientist conducting the study, said North Dakota continues to realize significant economic benefits resulting from the $18 billion investment by regional mining companies and electric utilities. North Dakota benefits from five lignite mines, seven power plants, the Great Plains Synfuels Plant and approximately 250 contractor/supplier companies that provide goods and services to the mines and plants.

“The combination of in-state purchases of goods and services and employee payroll from firms involved in lignite-related activities generated a total business volume of $5.4 billion in 2019,” Bangsund said.

Another indication of the impact of the industry on North Dakota’s economy is state tax revenue resulting from companies involved in lignite-related activities. In 2019, estimated tax revenues were $125 million. Both figures reflect a modest dip from a similar study conducted by NDSU in 2017. At that time, business volume was $5.7 billion and estimated tax revenues were $130 million. The downturn reflects a reduction in employees and less coal mined in 2019 as compared to 2017.

Click here to read more.

New Stations to Focus on Precipitation

A weather monitoring project in the oil-producing counties of western North Dakota aimed at reducing disruptions to oil industry traffic will soon move into its final phase of development.

The Wise Roads project (Weather Information System to Effectively Reduce Oilfield Delays and Disruption) launched by WDEA last summer has more than quadrupled the number of weather stations in the Big Four oil counties - Dunn, McKenzie, Mountrail and Williams. WDEA meteorologist Jonathan Rosencrans said before Wise Roads, there were only eight weather stations in the four counties, with just one each in Dunn and McKenzie Counties. Today, there are 34 stations, including 11 stations in McKenzie County, the largest oil-producing county in the nation.

As WDEA looks to complete the project with a fourth round of weather stations, Rosencrans said the work will get a little less expensive because the new stations won't need to collect as much data.

Click here to listen to Rosencrans comments.

Rosencrans said because the new stations won't collect wind and temperature data, they can be sited much closer to structures so many are expected to be placed on well pads or other industry facilities. He said that proximity will also allow the stations to be connected to AC power rather than depending on solar-powered batteries, so the rain gauges can be equipped with snow melters to better measure winter precipitation. Rosencrans said there are currently only three such stations in western North Dakota.

Wise Roads will also be enhanced by a project to be developed by the ND Agricultural Weather Network (NDAWN), which has partnered with WDEA on the weather station project. NDAWN was recently awarded a $6.4 million grant from the Army Corps of Engineers (see Oct. 9 WDEA newsletter) to expand the weather network in the Missouri River basin. Rosencrans said the project will install 20 new stations, some on the periphery of the Wise Roads network, while other existing stations will be upgraded.

Current data from all NDAWN weather stations can be found on the web at stationname.ndawn.org. For example, data from the newest station pictured above can be found at fairfield.ndawn.org. All of the Wise Roads stations can also be accessed at WiseRoadsND.com. Click here for the NDAWN home page.

Rosencrans made a presentation this week to a meeting of the LoadPass Permit Advisory Committee. Click here to view video of the meeting on WDEA's YouTube page.

This is a reminder that video recordings of speakers who presented at the virtual annual meeting of the Western Dakota Energy Association have been posted on WDEA's YouTube page.

The meeting was conducted on the Zoom platform with a dozen informative presentations spread over two days. Slide presentations from the speakers have also been posted at this link on the WDEA website. Click a link below to view a YouTube video presentation:

With the ongoing COVID-19 pandemic making it risky to hold large public gatherings, organizations have been forced to come up with innovative ways to conduct essential business functions. One of the latest to get creative was Mountrail-Williams Electric Co-op.

“We had to hold the meeting in person based on our bylaws,” said Jessica George, public relations and communications coordinator. “We usually see about 1,200 people when the meeting is held in Williston, so we decided to offer a mail-in ballot to keep numbers down and protect our staff, members and community.”

Board Chairman Roger Sorenson called the meeting to order with only 25 members in attendance. Because the number was insufficient for a quorum, the meeting was recessed to tally mail-in and in-person ballots received. More than 500 ballots previously mailed to members had been returned to the co-op, which amounted to a quorum to consider issues the members were asked to decide.

Chairman Sorenson returned from the recess and results were announced. Elected to serve three-year director terms were Dick Ludwig (West District), Garret Lalim (Central District) and Charlene Aubol (East District). The membership also approved a change to the co-op's bylaw that will permit it to hold virtual annual meetings electronically and to count the virtual members toward a quorum in the future. 

“The consensus seemed to be that having a mail-in option was nicer than only having an in-person option,” George said. “It was a way that people could still make their voices heard.”

Great River Energy has received a Leadership and Innovation Award from Clean Grid Alliance, a Minnesota-based organization devoted to advancing renewable energy in the Midwest.

GRE, which operates Coal Creek Station in North Dakota, is a 28-member cooperative that serves 1.7 million people across two-thirds of the state of Minnesota, and is the second largest power supplier in the state. The company was recognized for its announcement earlier this year that it planned to add 1,100 megawatts of renewable generation, and shut down the Coal Creek plant. GRE is also working on a 1-megawatt grid-connected electricity storage system.

“Over the past decade, CGA has been fortunate to work closely with Great River Energy and witness the track record of success that the GRE leadership team and company have achieved including clean energy and carbon reduction, adopting renewables, electrification, leading on building new transmission through the CapX2020 initiative, working on long-duration energy storage, service to members, and fiscal excellence,” said CGA Executive Director Beth Soholt.

The utility continues to transition its generation portfolio toward renewables, adding wind energy and relying more heavily on MISO market purchases. GRE has committed to reaching 50% renewable energy by 2030 and is currently at 25% renewables.

“We are proud of our accomplishments to develop carbon-free energy and the transmission necessary to bring more renewables to market,” said GRE President David Saggau. “Our job is to deliver what our members want. In a survey earlier this year, we learned that 89% of members believed moving toward more renewable energy is a good idea.”

The North Dakota Department of Transportation (NDDOT) is reminding motorists to prepare for snow-covered road conditions in North Dakota as winter weather is beginning to bring snow to the region, which means travel can be difficult.

The NDDOT encourages motorists to check the ND Roads map, which is now integrated with the National Weather Service, before they travel to see current road conditions and view highways along their route. Officials urge motorists to adjust their travel plans to allow additional time for safe, slow driving.  

Snowplow operators will be working to keep road conditions as safe and clear as possible. Motorists should remember to slow down, stay alert, stay back at least five car lengths and use extra caution when driving near snowplows.

If travel is necessary, the NDDOT recommends everyone in a vehicle is dressed for the cold weather. Motorists should keep blankets, water, food, phone chargers and an emergency kit in their vehicle.

Road condition information on 511 and the ND Roads map is updated daily from 5 a.m. to 10 p.m. CDT. The road report is based upon the information available to the NDDOT at the time of preparation and is provided solely as a public service. Conditions may vary from those reported.

Enhanced safety features including signage for reduced speed, no-passing zones, information about road conditions, and reminders to buckle up and drive sober and distraction-free are all part of the Safety Corridor on Highway 85 from Watford City to ND 68. In addition to the enhanced signage, corridors may include increased law enforcement and pavement markings that are more visible especially in dark or wet conditions. 

The features are all part of the ND Department of Transportation Safety Corridor campaign and were implemented on three different stretches of state highways in 2019 and 2020 as a part of the Vision Zero plan to help reach the goal of zero fatalities on North Dakota roads. The effort was recently recognized by the American Association of State Highway Transportation Officials with the regional award, “Operations Excellence, Small Project.”

Additional corridors are on Highway 52 from Brooks Junction to Velva and on Highway 83 from Bismarck to Washburn. Safety corridors will be monitored for effectiveness in severe crash reduction and may be undesignated after a period of time. To learn more about how taking personal responsibility behind the wheel can help reach the goal of Vision Zero, click here.

Source: Energy Information Administration

January 5