May 1, 2020 -- Spring Has Sprung
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There is no surer sign of spring than the appearance of dandelions. Homeowners who take pride in their lawn view them as a pest, but dandelions actually offer many
health benefits
.
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Production Likely to Fall Below 1M bbl/day
Members of the ND Industrial Commission learned this week the state's oil production could fall well below 1 million barrels a day this year, depending on the duration of the coronavirus pandemic, the ongoing drop in oil demand and the associated decline in the price of crude oil.
Justin Kringstad, director of the ND Pipeline Authority, presented several different scenarios at a special NDIC meeting using models based on production forecasts of the Energy Information Administration and the NYMEX Futures Market.
It's estimated the state's production is already down more than 400,000 barrels per day with about 6,000 wells shut in. But Kringstad said Bakken wells that remain on line will also continue their normally steep production decline. When that drop is combined with the likelihood that new well completions will fall to near zero until oil prices improve, he said North Dakota production could drop as low as 500,000 bbl/day in the worst case scenario.
Click
here to listen to Kringstad's comments.
Kringstad said another area of uncertainty is the rate at which the industry recovers, and how quickly shut-in production can be restored. In consultation with the industry, he estimated the peak shut-in volume will be 600,000 barrels per day.
Click
here to listen to Kringstad's comments.
Kringstad said in all near-term forecasts, the production impacts are expected to be severe. He said the recovery phase will be driven by price and how quickly shut-ins are brought back on line.
Click
here to see Kringstad's slide presentation.
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Gas Flaring to Fall with Oil Price Drop
Regulators Look to Tighten Flaring Rules
With an estimated 400,000-plus barrels of crude oil production shut in with the drop in prices, the state can expect to see a substantial decline in the percentage of associated natural gas that is flared.
Lynn Helms, director of the Department of Mineral Resources, told members of the ND Industrial Commission this week that the flaring rate will go down, but cautioned that it will likely rebound when prices improve and production comes back on line.
Click
here to listen to Helms' comments.
The industry was very close to the current 88 percent gas capture target in the month of February. Helms said that's good news, but reminded the NDIC that substantial additional investment in gas processing and takeaway capacity will be required to handle all the gas that will be produced in the future.
Click
here to listen to Helms' comments.
Helms said the department plans to propose several rule changes this year to help keep the midstream industry on pace to meet the gas capture goal, which will increase to 91 percent on November 1. He said DMR will schedule meetings with midstream companies to gather feedback on the proposed regulations.
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Hearing on Oil Waste Law Set for May 20
The Oil and Gas Division of the Department of Mineral Resources has scheduled a special hearing May 20 to consider whether marketing of crude oil at current prices constitutes waste under state law.
Section
38-08-02(19) of North Dakota Century Code defines several categories of waste, one of which is "the production of oil or gas in excess of transportation or marketing facilities or in excess of reasonable market demand."
The stated purpose of the hearing is to determine what price constitutes waste under the law, to consider consequences of determining that waste is occurring, and to determine what relief may be appropriate and necessary to prevent the waste of crude oil production.
The hearing, to be conducted by the ND Industrial Commission, seeks testimony in areas that include:
- crude oil price differential projections
- hedged crude oil production and challenges of getting to market
- storage capacity for North Dakota crude oil
- North Dakota refinery crude oil demand
- implications of temporary crude oil storage
- protection of correlative rights and jeopardized title to leasehold
- impacts on royalty owners when crude oil price reaches a negative value
- challenges of curtailing or shutting in crude oil production from North Dakota wells
- impacts on business for entities that service curtailed or shut in wells
- impacts on business that provide transportation, storage,
- impacts on continued employment of North Dakota operator’s staff
Click
here to see the May 20 meeting notice.
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Coal Creek Announcement Expected
An announcement about the future Coal Creek Station, North Dakota's largest coal-fired power plant near Underwood, could be coming as early as next week.
Earlier this year, Great River Energy, a Minnesota-based power generation and transmission company that owns the 1,100 megawatt plant, revealed that the facility was facing "economic challenges" and a decision about its future would be made sometime this year.
An
opinion piece by Rob Port in the Fargo Forum this week reports that "sources in various levels of government, as well as some sources in the energy industry ... expect Great River to state their intentions at a meeting on May 6."
The power plant and the nearby Falkirk Mine that delivers lignite to the facility employ hundreds of workers with an estimated annual payroll of about $150 million. Services industries that support the plant employ hundreds more North Dakotans.
The pending decision has generated considerable controversy in McLean County. A
letter submitted to the county by Great River President and CEO David Saggau described GRE's plans in the event Coal Creek is retired, including investing $1.5 billion to construct 800 megawatts of wind energy that would be interconnected to the company's high voltage lines on the site of Coal Creek Station. The county made that prospect more difficult with its approval in March of several
amendments to its zoning regulations including a provision that requires a one-mile setback from the Missouri River, Lake Sakakawea, and Lake Audubon for electric transmission lines from permitted wind turbines.
At a legislative committee meeting in February, Jon Brekke, Vice President of Power Supply for GRE, said the company is considering shutting down one or both units at the plant due to ongoing financial losses. Legislators were told that many of the coal-fired plants in the region have been forced to operate at less than half their design capacity due to competition from federally-subsidized wind generation and the addition of thousands of megawatts of cheap natural gas-fired generating units.
In his opinion article, Port said sources have told him GRE will announce a search for a buyer for Coal Creek over the next two years, while its existing contractual obligations to the power grid expire.
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The Face Behind Faces of North Dakota Coal
About a year ago a new Facebook group appeared called
Faces of North Dakota Coal. The page's stated purpose is "to humanize the wonderful, hardworking people in North Dakota’s Coal Country. Our story needs to be told."
Mark Pierce, the individual who created the Facebook group, recently posted a
video that explained his reason for getting personally involved. Pierce is a self-described third generation coal miner. He is purchasing manager for Coteau Properties Company in Beulah.
Click
here to listen to Pierce's comments.
Pierce said he's been asked many times why he started the Faces of Coal Facebook page. He said the answer is simply the fact that he loves the coal industry and the people who make it possible.
Click
here to listen to Pierce's comments.
Pierce said he believes it's important with threats of power plant shutdowns facing the industry, that North Dakotans understand the enormous economic impact that coal has in the state.
"The tax dollars our industry generates from nearly $5.7 billion of North Dakota GDP provide for great schools and public services all throughout coal country and west central North Dakota," Pierce said.
The Facebook group gained prominence recently when it organized a tailgating party that was to precede a McLean County zoning hearing related to possible closure of Coal Creek Station. The event had to be cancelled due to the coronavirus pandemic, but the group was able to live stream the meeting on Facebook with the help of Dave Nehring, a candidate for the ND Legislature in District 8.
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Lignite Energy Council Releases Coal Movie
The Lignite Energy Council and Coalition for a Secure Energy Future today released a feature-length documentary,
Coal: Powering the Past, Present, and Future. The film released at 7:00 p.m. can be viewed online at
www.coalmovie.com.
“We commissioned this project about a year ago and conducted more than 40 interviews, compiled 44 hours of footage and condensed it down to a 30-minute look at the lignite industry in our region,” said Lignite Energy Council President Jason Bohrer.
“The goal of the film was to create an opportunity for workers in our industry to tell their stories straight to the people who rely on their efforts to create affordable and reliable electricity,” Bohrer added.
In addition to hearing from industry workers, the LEC interviewed several elected officials including Sen. John Hoeven, Gov. Doug Burgum, Public Service Commissioners Randy Christmann, Julie Fedorchak and Brian Kroshus, as well as state and local elected officials.
The film will stream live on Facebook, YouTube, and the film website
CoalMovie.com.
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State to Re-Open With Distancing Rules
Schools to Remain Closed Rest of School Year
Most North Dakota businesses that were shut down as a precaution to slow the spread of the coronavirus are being allowed to re-open today based on a set of conditions dubbed “North Dakota Smart Restart.” However, Gov. Doug Burgum also announced today that K-12 schools in the state will remain closed the balance of the current school year.
The protocols for re-opening apply to high-contact sectors including bars and restaurants; hair, nail and tanning salons and other cosmetology-related businesses; tattoo and body piercing businesses; massage therapy facilities and fitness centers. Businesses are asked to adhere to a set of operating standards in line with health department recommendations:
- Completing a workplace assessment tool for COVID-19.
- Limiting the number of people occupying the facility to ensure 6 feet of distance from one another, and marking 6-foot increments where lines form.
- Posting signage at all entrances informing employees and customers to avoid entering if they have cough or fever, maintain 6-foot distance, wash their hands and limit unnecessary contact.
- Encouraging use of cloth face coverings for employees and contracted workers whose duties require close contact with other employees and/or the public.
- Providing for contactless payment systems and disinfecting all payment portals, pens, etc.
- Providing hand sanitizer, soap and water or effective disinfectant at or near entrances and in other appropriate areas.
- Regularly disinfecting high-touch surfaces.
- Developing policies and procedures for prompt identification and isolation of sick staff and customers.
- Encouraging customers to download the Care19 app to increase contact tracing success.
Burgum, speaking at a news conference yesterday, said it's important that businesses follow the guidelines, but said customers need to be respectful as well.
Click
here to listen to Burgum's comments.
The governor said ND Smart Restart protocols will be provided for theaters within the next few days, and for music and entertainment venues and large recreational facilities at a later date.
Even though most businesses will be re-opening, Burgum said state officials have opted to keep K-12 schools closed the remainder of the school year. He said he received input from a lot of sources before making the decision to continue the distance learning program the rest of the school year.
Click
here to listen to Burgum's comments.
K-12 schools have been closed to students since Burgum issued an executive order on March 15. Each of the districts' distance learning plans were instituted in early April. The governor said while it would have been nice to re-open classrooms, he said the risks outweighed the benefits. Burgum also recalled that the last month of the school year is traditionally not all that conducive to learning.
Click
here to listen to Burgum's comments.
Burgum said maintaining distance learning through the end of the school year will help the state slow the spread of the coronavirus, manage risk, preserve hospital capacity and protect those most vulnerable to COVID-19 – the elderly and those with underlying health conditions. Additional guidance on graduation ceremonies will be provided soon.
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Wise Roads Continues to Grow
Despite the industry slowdown, work continues on development of WDEA's Wise Roads weather station project, aimed at improving the movement of heavy oilfield truck traffic during and after rain events.
Wise Roads (Weather Information System to Effectively Reduce Oilfield Delays and Disruption) is being developed in partnership with the North Dakota Ag Weather Network (
NDAWN) at NDSU.
The Wise Roads project is a response to concerns expressed by the oil industry that weight limit restrictions placed on gravel roads after rain events covered more roads than necessary.
The latest station, located about about seven miles north-northwest of Tioga, was installed and brought on line this week. All stations that are part of the Wise Roads network are also incorporated in the NDAWN network. Six more stations are slated for installation in the next few weeks, three of which will be in McKenzie County, two in Dunn County and another in Williams County. Ten more stations are slated for installation this summer, and the last 15 of the total of 50 stations in the Wise Roads project will be installed late summer or early fall.
The installation work is being coordinated by WDEA Meteorologist
Jonathan Rosencrans. Click
here to see NDAWN's Flickr page with additional photographs from NDAWN station cameras.
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New Long X Bridge Taking Shape
Expect Delays with One-Lane Traffic
Work is progressing on the structure that will eventually replace the historic Long X Bridge over the Little Missouri River south of Watford City.
The ND Department of Transportation awarded a nearly $34 million contract to Ames Construction to build the new bridge and dismantle the old one (see
June 7, 2019 newsletter). The company is based in Burnsville, Minnesota.
Traffic on Highway 85 near the bridge has switched to one-lane on the west side roadway due to the current construction. After the transition, traffic will be head-to-head for the remainder of the project.
A temporary concrete barrier and striping will also be installed to help direct traffic flow. Access to the north unit of Theodore Roosevelt National Park will remain open to traffic. Motorists should expect delays and plan accordingly.
The new bridge being built east of the existing structure will be about 800 feet long and 80 feet wide. It will have four 12-foot driving lanes, 12-foot emergency/breakdown lanes on either side, as well as a six-foot lane down the center. The bridge is expected to be open by the end of the fall construction season, after which demolition of the old structure will begin. That's due for completion by July 2021.
Click
here to see a conceptual image of what the bridge will look like when completed. Click
here to see a story from KFYR-TV about the bridge work that includes video of the tunnel for wildlife crossing.
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Grants Available to Public Entities
The North Dakota Department of Emergency Services conducted a briefing this week detailing the Federal Emergency Management Agency’s Public Assistance Program. The federal aid was made available after North Dakota was approved April 1 for a major presidential disaster declaration for the COVID-19 pandemic.
Through the program, FEMA can reimburse local governments, states, tribes and certain private non-profits for up to 75 percent of their eligible costs related to emergency protective measures required for the response and prevention of COVID-19.
“The categories for eligible costs through FEMA’s Public Assistance Program are fairly broad during this pandemic response, meaning there are a lot of ways in which it can provide assistance to local jurisdictions, as long as those costs were incurred to prevent and protect against the impacts of COVID-19," said Justin Messner, Recovery Section chief for NDDES.
Some of the eligible COVID-19 emergency protective measures for which the program can reimburse public entities include: emergency operation center expenses; training; disinfection of eligible public facilities; emergency medical care; medical sheltering; the purchase and distribution of food, water, ice, medicine and other consumable supplies; the movement of supplies; security and law enforcement and communications of general health and safety information to the public.
To be eligible applicants must first register for access in the
FEMA Grants Portal. Applicants can then submit their COVID-19 related expenses where they will be reviewed by FEMA and NDDES.
Click
here to view the applicant briefing video.
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WDEA Offering Energy Scholarships
The Western Dakota Energy Association will award five $1,000 scholarships this fall to students in an energy-related field at a North Dakota college, university or technical school.
WDEA President Shannon Holter said the association is offering the scholarships to help the industry and western communities meet the workforce challenges historically experienced with oil industry growth.
“We recognize that North Dakota will see benefits from the oil industry only if it is able to attract the workforce it needs,” said Holter. “We want to do everything we can to encourage young people to explore the many opportunities for a rewarding career in the energy sector.”
Funding for the scholarship program is generated by sponsorships of WDEA’s annual meeting, as well as royalties from advertising in Basin Bits magazine.
Click
here to learn more about the selection criteria and how to apply.
Click
here to view or download an application form.
The application deadline is September 18, 2020. Scholarship winners will be announced at WDEA's annual meeting October 7-8 in Williston.
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NDPC Al Golden Scholarships
Application Process Now Open
The Al Golden Scholarship Program, sponsored by the North Dakota Petroleum Council through its philanthropic foundation, is now accepting applications for the 2020-21 school year.
The program will award up to nine $2,000 scholarships to students pursuing degrees or training in an energy-related field.
Scholarship winners are selected based on academic achievement, work or internship experience in the oil and natural gas industry or a demonstrated commitment to a qualified area of study. Students must be attending a North Dakota college or university and remain a full-time student for the 2020 fall semester and 2021 spring semester.
Applications must be submitted or postmarked by June 1, 2020. For qualifications and application requirements along with a list of previous scholarship award winners,
click here.
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Write it Down on Your Calendar!
WDEA 2020 Annual Meeting
Get this date on your calendar! The Annual Meeting of the Western Dakota Energy Association will be held:
October 7-8, 2020
The Grand Williston Hotel & Conference Center
Williston, ND
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COVID-19 Useful Information Links
Here is a list of useful information resources for addressing both individual and family concerns along with pertinent information for business and employers related to managing the current coronavirus outbreak.
Information at these links is usually updated to be the most current to help focus on facts not fear, and preparation over panic.
North Dakota SMART Re-start
North Dakota Information
U.S. Small Business Administration
Small Business Loans
Center for Disease Control & Prevention
U.S Department of Agriculture
U.S. Department of Housing and Urban Development
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Quick Connect
- Oasis Petroleum plans to halt all oil drilling in the Bakken -- Reuters
- Continental Resources shuts wells, halts sales, says report -- NASDAQ
- The oil industry could see benefits from two new lending programs -- KFYR-TV
- DOE: Bakken crude no more volatile than conventional or Permian Basin oil -- Williston Herald
- ND legislators call on feds to OK Bakken shipments to Washington state -- NGI's Shale Daily
- Ethanol co-op determined to keep going despite drop in fuel demand -- Dickinson Press
- Regulators okay expansion of Mountrail County oil conditioning facility -- Bismarck Tribune
- ND wind energy continues growth; wind projects seek to clear hurdles -- Minot Daily News
- Fines rack up for wind farms failing to meet deadline for new lighting -- Bismarck Tribune
- Forest Service: Fire danger very high or high in most North Dakota counties -- Associated Press
- Minot to take slow approach to re-opening business and healthcare services -- Minot Daily News
- ND secures 140,000 new COVID-19 antibody tests; helps meet guidelines -- Associated Press
- Dickinson drive-thru testing concludes: More than 1,100 COVID tests given -- Dickinson Press
- Good to know: Serology testing does not test for immunity, health officials say -- KXMB-TV
- Higher Ed plan to reopen universities this fall has Burgum's 'full support' -- Dickinson Press
- Bowman County revenue base may be yet another COVID-19 victim -- Bowman Pioneer
- Montana reopens economy for business using 'phased' and 'measured steps' -- Williston Herald
- North Dakota tourism industry watches and waits amid pandemic concerns -- Bismarck Tribune
- ND Human Services offering assistance with heating bills during pandemic -- KFYR-TV
- City to waive permit fees for new home construction as housing incentive -- Williston Herald
- Teddy Roosevelt library group considering 12 architecture firms for project -- Fargo Forum
- Enrollment projected to increase by nearly 900 students in next 5 years -- Dickinson Press
- Trenton becomes fourth ND school district approved for four-day week -- Bismarck Tribune
- Williams County holding off on proposed grant that would add to high school -- Williston Herald
- Larry Derr named new superintendent of Glenburn Public School District -- KFYR-TV
- Petition OK'd for circulation for sweeping North Dakota election changes -- Bismarck Tribune
- Oklahoma asks Trump to declare coronavirus an 'act of God' to help oil producers -- Reuters
- In 2019, U.S energy production exceeded consumption for the first time in 62 years -- EIA
- Oil's steep fall must spark US policymakers to rethink energy dominance -- RealClear Energy
- Five things to know about the turmoil in the global and national oil market -- The Hill
- New methane emissions calculations: Enviro groups manipulating numbers -- Energy In Depth
- Prime minister of India wants to expand nation's coal industry in wake of pandemic -- sify.com
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Factoid of the Week
Total U.S. crude oil in storage is up another 9 million barrels to 527.6 million bbls. It is about 10% above the five-year average for this time of year. Refineries continue to operate at near 70% capacity with gasoline production down nearly 44% year over year. Jet fuel product supplied was down 62% compared with the same four-week period last year.
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May 8
Online - Bismarck
May 14
Bismarck
May 14
Zoom Meeting
May 15
Video Conference
May 19
Bismarck
May 20
Bismarck
May 27
Bismarck
May 28
Bismarck
June 1
Bismarck
June 2
Bismarck
June 8-11
Bismarck
June 19
Williston
September 1-3
Bismarck
September 30 - October 1
Bismarck
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Oil prices and rig count
May 1, 2020
WTI Crude: $19.78
Brent Crude: $26.44
Natural Gas: $1.89
North Dakota Active Rigs: 30 (up 1)
5/1/2019 -- 65 rigs
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Geoff Simon
Editor/Executive Director
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