ND Sets Another Oil Production Record
Winter Slowdown Likely Due to Oil Price Drop
North Dakota oil producers pumped nearly 1.4 millions barrels per day during the month of October, setting an all-time production record for the state. But the good news is offset by the recent drop in oil prices and the continuing challenge of capturing all the associated natural gas.
Oil production totaled a record 43.1 million barrels in October, averaging just over 1.39 million bbl/day. Natural gas production also hit a new high of more than 79 billion cubic feet during the month, or 2.56 Bcf/day. But Lynn Helms, director of the Department of Mineral Resources, said the recent drop in oil prices means North Dakota can expect a slowdown in drilling activity in the first quarter of 2019.
Click
here to listen to Helms comments.
Helms said producers overall captured 80 percent of the natural gas produced in October, but it remains to be seen if curtailments will be required because it's not the fault of producers. There is simply not enough gas processing capacity to handle the volume being produced.
Helms said North Dakota producers are probably getting around $40/barrel for crude being sold today. But he said natural gas prices have climbed considerably higher than they’ve been because not enough gas was put in storage to meet high demand caused by colder-than-normal weather in November.
Click
here to read Helms’ Director’s Cut.
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Roundtable Tackles Road Closure Policies
Western North Dakota county highway managers sat down with oil industry representatives this week to discuss ways to keep the industry moving during times of inclement weather, while still protecting the integrity of gravel roads that are also used by members of the public.
The roundtable was organized by the ND Local Technical Assistance Program, which provides workshops on road maintenance throughout the state. The roundtable with road managers is an annual event, but for the first time oil industry representatives were invited to attend to discuss concerns with road management practices.
Storage tanks on a well pad typically hold 10,000 barrels or less, so crude oil and produced water have to be continually transported off site. If a rain event forces roads to be closed to heavy trucks for a period of time, it can force companies to shut down wells if the tanks get full.
County road managers say they’re sensitive to the problem, but the safety of the traveling public is their top priority.
Click
here to read more about the roundtable discussion.
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WDEA Outlines 2019 Legislative Agenda
Infrastructure and education funding, and addressing the state’s workforce issues will top the list of legislative priorities for members of the Western Dakota Energy Association when the session begins in January.
WDEA Executive Director Geoff Simon and WDEA legislative consultant Brent Bogar conducted a series of meetings in Minot, Williston and Dickinson this week to review expectations for the 2019 Legislature. Area legislators were in attendance at all the gatherings, as well as local county, city and school officials. Several members of WDEA’s Executive Committee also participated in the discussion.
Operation Prairie Dog legislation tops the list of priorities. The bill would revise the gross production tax distribution formula to meet funding needs of political subdivisions impacted by energy development, as well as provide infrastructure grants to non-oil producing regions of the state. Education funding will also be a huge issue, particularly addressing the school construction needs of rapidly growing districts.
Click
here to see the Top Issues presentation. Click
here for the Operation Prairie Dog presentation.
Click
here for information and links to reports from interim legislative study committees.
Click
here for a story about WDEA's Williston meeting by Renée Jean in the Williston Herald.
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EmPower Hears about Prairie Dog
Members of North Dakota’s EmPower Commission heard a rundown this week of the funding that would be provided in the “Operation Prairie Dog” bill that will be considered by the 2019 Legislature.
Senate Majority Leader Rich Wardner, who has led the effort to draft the measure, explained details of the plan to EmPower yesterday. The 16-member group was formed in 2007 to develop energy policy recommendations for the state. Wardner said it’s important the members understand the impact of oil tax revenues in the state.
“There wouldn't be a diversion in Fargo if it wasn't for (oil money). There wouldn't be any plans for getting state money for Minot for their flood control if it wasn't for the oil money,” Wardner said. “Agriculture is important, big time, but I want to tell you the oil revenue we're getting really helps everybody.”
The Prairie Dog legislation, so-named because the rodents are good at building infrastructure, would fund the needs of oil-impacted communities in western North Dakota and establish an infrastructure grant bucket for non-oil areas.
“The oil and gas counties, they're left just the way they were, with some minor tweaks,” Wardner said. “What do they want? Don't put a two-year sunset on it, because then they can't plan ahead. So that's the deal, no two-year sunset so this will go on into the future ... and for the non-oil, this will help the political subs around the state to deal with their infrastructure.”
Wardner said there is broad support for the funding package throughout the state.
"We've got the League of Cities on board. We've got the counties on board, the townships on board, everybody out west, the State Chamber, and we're hoping this will strengthen the state and help these communities invite people into the state because we have infrastructure that they can enjoy these communities,” he said.
Wardner said there is one thing missing from the Prairie Dog plan, and that is money to build schools. He said it is such a contentious issue, inserting it in the legislation would have caused it to lose support.
Click
here to view Wardner's presentation.
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Western Schools Make Expansion Plans
January Bond Votes in Williston, Watford City
January 8, 2019 will be a day to watch in western North Dakota as both Williston and McKenzie County School District voters decide the fate of plans to expand K-12 education facilities in the two communities.
Williston District #1 voters will decide whether to fund a $60 million project that will build two new elementary schools, renovate others and expand Williston High School. Just last spring, Williston voters rejected a bond issue, and Superintendent Jeff Thake, who joined the district a few months after the failed bond vote, wanted to find out why. So Thake and the school board formed a “thought exchange.”
Click
here to listen to Thake’s comments.
The Williston District had 2,184 students at the beginning of the 2009-10 school year, but Thake says that figure has doubled to around 4,400 this year. And he said the figure is expected to continue to grow in the coming years.
Click
here to listen to Thake’s comments.
About 45 miles to the southwest in Watford City, the growth has been even more extraordinary. McKenzie County School Superintendent Steve Holen said enrollment has quadrupled in the past 10 years. The district completed a new high school a few years ago, which Holen said gave the district some flexibility to manage its growth.
Click
here to listen to Holen’s comments.
Voters in the McKenzie County School District are being asked to approve a bond issue of up $35 million to build and equip a new elementary that would be constructed near the existing high school. Holen said the space is needed because the district is seeing huge increases in the early elementary grades.
Click
here to listen to Holen’s comments.
Click
here for details of the Williston bond vote. Click
here for more about the McKenzie County vote.
Click
here to see 2018-19 fall enrollment figures in ND school districts.
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School Bonds Defeated in Beulah, TGU
Voters in the Beulah School District, and in the TGU School District which covers much of McHenry County, rejected bond measures this week that would have renovated K-12 schools in their districts.
By nearly a 3-to-1 margin, voters in Beulah said no to a $17.5 million bond to refurbish the high school. Portions of the building are becoming dilapidated, and there are problems with plumbing and poor insulation.
Click
here for a story about the Beulah school from KFYR-TV.
Voters in the Towner-Granville-Upham school district also soundly defeated an $8.9 school bond issue on Tuesday. Unofficial totals show the measure received only 39 percent of the vote, but required 60 percent to pass.
The school district had proposed turning the existing high school building in Granville into a K-12 building, and building a new addition east of the current high school. At Towner, they would have added a new entrance, added visitor parking, a new student commons area, renovated other parts of the building and made heating and air conditioning improvements.
Click
here for more details about TGU from the Minot Daily News.
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PSC Christmann: "Not so Fast on Wind Power"
The federal government keeps subsidizing wind farms and the number of towers in North Dakota keeps growing, which concerns ND Public Service Commissioner Randy Christmann.
Christmann worries that too many wind power facilities will force a reduction in more consistently reliable energy sources.
"Subsidies for wind power are so generous if a wind developer can get on the grid, they can't go wrong," Christmann said. "They can even sell at a negative price."
The North American Electric Reliability Corporation (NERC)
notes that more than 46.5 gigawatts of coal-fired generation have been shut down since 2011, and another 19 gigawatts of coal capacity is slated to close in the next decade.
"If we go too far with intermittent services such as wind replacing coal power plants, we can't automatically switch back to coal and start them again," said Christmann.
He predicts 2019 will continue to see growth in wind power in North Dakota as long as the federal government continues to pay for it.
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Quick Connect
- Davis Refinery air quality permit appealed in court -- KX News
- Marathon sees success in North Dakota, plans to expand Bakken activity -- Houston Chronicle
- Western Canada oil industry ‘beyond a crisis’ due to lack of pipelines -- Weyburn Review
- Two sides to story of plan to close women's prison in New England -- Dickinson Press
- Going green is raising your electric bills, wind/solar raising rates -- Inside Sources
- Ten western North Dakota counties among those with new sheriffs -- Bismarck Tribune
- Wyoming Casing Service owes back pay for overtime violations -- Bismarck Tribune
- Industrial Commission awards $3.4 million in Outdoor Heritage grants -- NDIC news release
- Burlington residents propose pedestrian bridge over Hwy 2 & 52 -- Minot Daily News
- Re-named Williston-area economic group prepares for the legislature -- Williston Herald
- Northwest Landowners discuss issues in upcoming legislative session -- Tioga Tribune
- Bill gives tribes greater flexibility to develop energy resources -- Minot Daily News
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Factoid of the Week
The North Dakota Geological Survey was the agency responsible for both regulation and research for the first 30 years after the discovery of oil. In 1981 the ND Legislature passed House Bill 1536, which moved all NDGS personnel who were involved with oil and gas regulation to a newly-created Industrial Commission Oil and Gas Division.
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December 17
Bismarck
December 18
Bismarck
December 18
Bismarck
December 18
Bismarck
December 20
Manning
January 3
Bismarck
January 6
Williston
January 29-31
Grand Forks
July 16-17
Bismarck
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Oil prices and rig count
December 14, 2018
WTI Crude: $51.21
Brent Crude: $60.28
Natural Gas: $3.79
North Dakota Active Rigs: 67 (up 3)
12/14
/20
17 -- 52 rigs
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Geoff Simon
Editor/Executive Director
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