May 8, 2020 -- Badlands Vista
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It's difficult to take a bad picture of the Badlands of North Dakota. This photo was snapped facing north from Interstate 94, not far from the Painted Canyon overlook east of Medora.
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GRE Plans to Shut Down Coal Creek Station
Possible Sale of Plant Could Keep it in Operation
Great River Energy announced yesterday it plans to shut down Coal Creek Station in the second half of 2022.
The Minnesota-based cooperative said it will close the 1,100 megawatt plant near Underwood, and plans to replace much of the power with new wind farms, including three in Minnesota. In making the announcement, GRE officials said the plant has been losing money for several years, undercut by lower cost electricity from federally-subsidized wind power backed up by cheap natural gas-fired generation.
The Coal Creek plant employs 260 people, and another 400 work at the adjacent Falkirk Mine which supplies the plant with lignite coal. To assist Underwood and other affected communities during the transition, Great River indicated it would make voluntary annual payments of the local government share of the plant’s taxes for five years after the plant’s closure.
For Great River, closing Coal Creek “is a big development -- a big shift,” said GRE CEO David Saggau. "We're building a power supply portfolio that will serve our member-owner cooperatives for decades."
GRE is a non-profit wholesale cooperative owned by 28 retail electric cooperatives that supply power to around 700,000 customers, mostly in Minnesota. Great River’s largest members are Connexus Energy and Dakota Electric, which serve parts of the northern and southern Twin Cities metro area.
The two units of the power plant have been in operation since 1979. State and local leaders expressed disappointment with the decision, but because GRE is willing to consider opportunities to sell the plant, there is expected to be a concerted effort to keep the plant in operation beyond 2022.
"Lt. Gov. Sanford and I are determined to find a path forward for Coal Creek Station that preserves high-paying jobs and keeps North Dakota’s most efficient and updated coal-fired plant on the grid to ensure baseload power capacity for our state and the region,” Gov. Doug Burgum said. “We remain committed to bringing stakeholders to the table to evaluate all options and find opportunity in this uncertainty."
J.C. Butler, CEO of North American Coal, the operator of the Falkirk Mine, issued a statement that said North American Coal is actively engaged in the exploration of options to allow for the transfer of the plant to one or more third parties, which would preserve jobs at both Coal Creek Station and the mine.
There was a mixed message in Great River's announcement, according to McLean County State's Attorney Ladd Erickson, who orchestrated an effort this year to protect the plant. In a
letter to the county earlier this year, GRE had indicated that if Coal Creek is retired, it planned to build 800 MW of wind that would interconnect with the company's high voltage lines on the site of Coal Creek Station. But Erickson drafted several
amendments to the county's zoning regulations that would make it difficult to connect any wind farm built in the county to the plant's transmission line.
"There's good and bad in the announcement," Erickson said. "The fact that wind isn't a threat to occupying that transmission line keeps a marketable plant and mine there for all of us."
Erickson believes the vast amount of intermittent wind energy that has already been added to the grid makes it critical that baseload (24/7 power) plants like Coal Creek exist to ensure grid reliability.
"The GRE announcement means that we have a viable, marketable, lignite-fired power plant that is available to provide baseload power into two grids that desperately need it, "Erickson said. "The fact that they're agreeing now to move the wind to other places benefits North Dakota. That's a good thing because the wind would have destroyed any chance of keeping a viable baseload plant."
Great River has invested millions of dollars in the plant since the mid-2000s to reduce emissions and increase its efficiency. The cooperative also just last year completed a major upgrade on the trasnmission line running from Coal Creek to the Twin Cities.
A big reason that coal plants are struggling financially is not just competition from subsidized wind power, but also that they are not compensated for ensuring grid reliability during periods of extreme heat or cold. Click
here to read a recent news release from Senator John Hoeven that explains the issue and his efforts to press the Federal Energy Regulatory Commission to develop a solution.
Click
here to read a story about the plant closing in the Minneapolis Star-Tribune.
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Not Your Average Coal-Fired Power Plant
Bohrer: Facility Offers Many Opportunities
It would be huge understatement to describe Coal Creek Station as just another coal-fired power plant. The mammoth generation facility is actually the center of an energy park, where employees have developed many innovative coal improvements.
Great River Energy has been among industry leaders in the marketing and sale of coal combustion fly ash as a substitute for cement. Many structures in the region, including the National Energy Center of Excellence at Bismarck State College, have foundations and walls built with concrete that includes a mixture of cement, as well as fly ash from Coal Creek Station. GRE also developed a technique called "dry fining," using waste heat from the coal plant to remove moisture from lignite, making the coal lighter and more economical to ship by rail. The power plant also supplies steam to the adjacent Blue Flint ethanol plant, and GRE has been on the forefront of efforts to capture and store carbon dioxide from the stacks at the plant.
In a
YouTube video in which he shared his reaction to yesterday's announcement, Lignite Energy Council President Jason Bohrer said the plant has a lot to offer a would-be operator. He said two years is not much time to develop a plan, but it would begin with determining the true value of the facility.
Click
here to listen to Bohrer's comments.
Bohrer said it will take a unified effort engaging local, state and federal elected officials, industry experts, and individuals from the affected communities to produce a positive outcome.
Click
here to listen to Bohrer's comments.
Click
here to view or download a short slide presentation with photographs and a more-detailed description of the power plant's attributes.
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Mercer Co. Places Moratorium on Wind Farms
With news that a coal plant in neighboring McLean County is being threatened by the ever-expanding wind industry, the Mercer County Commission passed a resolution this week imposing a two-year moratorium on possible new wind projects to give the county time to study the economic impacts on coal.
No other county is more dependent on the coal economy than Mercer County. It is home to three coal-fired power plants - Antelope Valley Station, Coyote Station and Leland Olds Station - as well as the Great Plains Synfuels Plant near Beulah, and the Freedom and Knife River coal mines.
Commission Chairman Marv Schwehr said the announcement that Great River Energy plans to close Coal Creek Station sends a strong signal that the county needs to consider the consequences of additional wind development.
"The handwriting is on the wall," Schwehr said. "We're in a war to save the economy of this county."
The
resolution says Mercer County is aware of the zoning issues in McLean County and believes action by the 2021 ND Legislature could impact the county's authority over wind farm zoning. The resolution says any change is likely to have a economic impact on the county and its residents, so it wants to take some time to review its ordinances and the Public Service Commission wind farm siting process.
With a company actively working to site a wind farm in northern Mercer County near Lake Sakakawea (see story below), Schwehr said he heard from many county residents upset by the possibility.
"All of us (county commissioners) have been inundated with phone calls, emails, messages, wherever we walk or talk, everybody's up in arms about this wind farm," Schwehr said. "They're very adamant, and their arguments are sound."
Click
here to read more about energy-producing facilities in Mercer County.
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Mercer County Wind Developer Backs Off
Company Had Leases in Place for Project
An Alberta-based wholesale power developer has opted not to submit an application for a conditional use permit for a 152-megawatt wind farm it has been developing adjacent to Highway 1806 in northern Mercer County.
According to Capital Power's
website, it had 100% of its land leases executed for its Garrison Butte Wind project. It was sited on 22,000-plus acres with a planned interconnection at Great River Energy's 230-kV Stanton Substation. The company had filed a generator interconnection request with the Mid-Continental Independent System Operator (MISO) in March 2018, and anticipated approval of the interconnection agreement in 2021.
Mercer County Commission Chairman Marv Schwehr said Capitol Power submitted a request to the county that it make modifications to its zoning ordinances to accommodate the wind farm. Among them was a request that the county allow the minimum ground clearance for turbine blades to be 50 feet instead of 75 feet required by the current ordinance. But when the county planning and zoning commission rejected the proposed changes, Schwehr said the company chose not to file an application.
Click
here to see Capital Power's fact sheet about the Garrison Butte Wind project.
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State Submits Amicus Brief
in Support of DAPL Pipeline
ND Attorney General Wayne Stenehjem filed an
amicus brief last week that opposes a possible ruling to vacate the easement granted by the Army Corps of Engineers for the Dakota Access Pipeline. Such a ruling would effectively shut down the 570,000 bbl/day crude oil pipeline.
Judge James Boasberg issued a ruling in March that the Corps' analysis of DAPL was inadequate and ordered the agency to reexamine it and issue an updated environmental impact statement. Now the judge is considering whether to withdraw the pipeline easement while the EIS is completed, asking parties to comment on the seriousness of the EIS's deficiencies, and the "disruptive consequence" that vacating the easement would cause.
The
state's brief indicates that shutting down the pipeline would cause "a serious reduction in economic output in North Dakota and corresponding loss of tax revenue to the state." The state's contention is backed up by declarations submitted by state Budget Director Joe Morrissette, state Tax Commissioner Ryan Rauschenberger, Mineral Resources Director Lynn Helms, and ND Pipeline Authority Director Justin Kringstad.
In his
declaration, Morrissette outlines the importance of oil tax revenue to the state budget. He said if the DAPL shut down resulted in a decrease in oil production equal to the 570,000 bbl now transported by the pipeline, "the reduction in state oil and gas tax revenues would be approximately $2 billion during a two-year budget period, based on the current official revenue forecast."
Rauschenberger's
declaration points out the millions in property taxes paid to counties by DAPL. He also notes that "North Dakota realized an estimated $317 million in additional Gross Production Tax revenue due to the decreased shipping cost and higher price received for oil on the Gulf Coast." He said if DAPL is shut down, "those increased oil tax revenues would disappear as production is shut in or diverted to higher-cost modes of transport."
Lynn Helms'
declaration states that because of a lack of adequate rail takeaway capacity, shutting down DAPL would force thousands of producing oil wells to be shut in, resulting in a loss of jobs and tax revenue. He said restoring the wells to production could cost as much as $400,000 per well, and history suggests that many would be permanently abandoned.
In his
declaration, Kringstad also points out the lack of takeaway capacity and in-state refining capacity for the state's crude production. He also notes the negative consequences a DAPL shutdown would have on other stakeholders, including the state, royalty owners and midstream companies.
Reply briefs from the plaintiffs (Standing Rock and other Sioux Tribes) are due May 20. Reply briefs from Dakota Access and Corps are due May 27. A decision will likely be issued in mid-June.
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Bakken Restart Task Force Established
Plan to Strengthen the State's Energy Future
State Estimates 6,800 Wells Have Been Shut In
The ND Department of Mineral Resources has established the Bakken Restart Task Force to support rapid recovery of the oil and gas industry and related sectors impacted by the loss of demand due to the coronavirus pandemic.
The task force includes Mineral Resources, the Public Service Commission, Dept. of Environmental Quality, Trust Lands, the Pipeline Authority, the Office of Management and Budget, the Tax Department, the Department of Commerce, the Bank of North Dakota and input requested from various industry subject matter experts.
“At this time, North Dakota has 6,800 wells shut-in – amounting to 450,000 barrels per day of production," said Lynn Helms, Director of the Department of Mineral Resources. "However, it was clear during the first meeting of the Bakken Restart Task Force that many great efforts are already underway across agencies to secure, strengthen, and stimulate North Dakota’s energy future.”
The Bakken Restart Task Force is focused on three core areas:
- Regulatory Relief, focused on assembling regulatory agencies to work as one toward identifying and streamlining regulatory requirements, clarifying and communicating existing relief efforts.
- Economic Stimulus, identifying all existing programs and funding sources, investing in projects with long-term benefit to the state such as abandoned well plugging, environmental remediation, research pilot projects, etc., to get the service industry back to work with the added benefit of investing in needed projects at a time when labor and service costs are at an all-time low.
- Bakken Smart Restart, focused on the long-term recovery of our oil and gas industry, includes proposals for tax relief and low-cost financing.
Information and resources related to each area are posted under the
Bakken Restart Task Force link on the DMR homepage. Action reports will be updated as the task force continues to review each area. The Bakken Restart Task Force will continue to meet weekly to discuss focus areas and maintain a list of actions taken designed to provide resources and updates to those Bakken businesses seeking information on relief available.
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Petroleum Council Events Canceled
Due to the uncertainty of the ongoing pandemic and the various guidelines regarding social gatherings, the North Dakota Petroleum Council has canceled a group of popular summer events. The list includes:
- Denver Social | June 10
- Teacher Education Seminar | June 15
- Cookfests | July 14 – Arnegard; | July 16 – Mohall
- Fishing Derby | July 15 – New Town
In an announcement of the cancellations, the NDPC said, “These events have been some of the most popular functions we host, so we did not come at this decision easily. But, with the uncertainty of COVID-19 and various guidelines dictating social distancing, we felt we would likely be unable to offer the kind of networking and learning opportunities that benefit our members and event attendees at these particular events. Maintaining social distancing at CookFest would prove especially difficult, while the North Dakota Game and Fish is currently asking for any social gatherings associated with Fishing Tournaments be canceled or limited. We felt these circumstances would detract from the overall fun and value of these events and prove difficult to organize or change should the situation change in the coming weeks.”
The Williston Basin Petroleum Conference is still scheduled to be held Sept. 1-3, and the NDPC is working with the Bismarck Event Center to create a COVID compliant conference.
In addition, the ND Oil PAC Golf Tournament at Bully Pulpit Golf Course in Medora on August 26 is, at this point, still scheduled.
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Baesler: ‘Virtual Graduation’ Planned
State School Superintendent Kirsten Baesler said this week that a “virtual graduation ceremony” will be broadcast and livestreamed across North Dakota on May 30 as an opportunity to honor the Class of 2020.
The ceremony is a bonus addition to any local graduation celebrations that local school districts will hold. The Department of Public Instruction is partnering with Gov. Doug Burgum’s office, Forum Communications and Microsoft to produce the live ceremony.
It will take place at 2:00 CDT on May 30. It will be broadcast on ABC affiliates in North Dakota, and a livestream will be available on the websites of the Fargo Forum, Grand Forks Herald, Jamestown Sun and The Dickinson Press. The ceremony will include remarks from Gov. Burgum; a musical performance by Nashville recording artists Tigirlily, two sisters who are natives of Hazen; and remarks by a nationally known speaker or speakers, who will deliver an invocation and commencement address.
“This is intended to provide a special opportunity to honor and celebrate our 2020 graduates and their families, who have already sacrificed so much of their senior year celebrations because of COVID-19,” Baesler said.
Click
here for a story from KXMB-TV explaining how school facilities may be used for graduations.
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Danita Bye Appointed to Higher Ed Board
Gov. Doug Burgum today appointed business consultant Danita Bye of Stanley to the state Board of Higher Education.
Bye has been a leadership and sales development consultant since 1997 for small- to medium-sized businesses in the science, technology, engineering, manufacturing and medical device industries. She previously worked as an investor and sales manager for Micro-Tech, a medical device manufacturer, and in sales and sales management for Xerox Corp.
“Danita’s passion for education, deep understanding of the business sector and thoughtful insights into the new generation of learners will help the State Board of Higher Education and all North Dakota campuses respond to the COVID-19 crisis and the unstoppable forces impacting higher education: economics, demographics, culture and technology,” Burgum said.
Bye will serve the unexpired term of former board member Dan Traynor, who resigned in January after the U.S. Senate confirmed him for a North Dakota federal district judgeship. The term runs until June 30, 2022. Bye’s appointment is subject to confirmation by the North Dakota Senate.
Click
here to learn more about the Board of Higher Education and its responsibilities.
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NDDOT Planning Bicycling Network
With social distancing rules limiting some summer activities, the ND Department of Transportation is developing a State Bike Network and implementing a 20-year vision to connect recreation destinations across the state through bicycling.
Shorter connections between urban areas and destinations will be part of the plan, but it is primarily meant for long-distance bicycle trips. The plan, however, is not meant for the casual or inexperienced biker and involves three tiers each with different levels of traffic volumes and routes.
Research shows that bicycle networks can expand business opportunities in rural communities. Studies demonstrate that bicycle travelers spend more money per day than an average tourist, and bicycle commuting lowers medical costs and reduces the number of roadway-related deaths per year.
Click
here for an informational brochure on the North Dakota Bicycle Network. Click
here for information on North Dakota’s existing scenic bike trails.
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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
- Nat'l talk about help for oil industry includes Bakken voices -- Williston Herald
- 'Like watching a train wreck': Virus effect on ND shale oilfields -- Reuters
- Bakken producer Hess sees no production shut-ins on hedges, storage capacity -- Reuters
- Washington state to implement rail offloading restrictions on Bakken oil -- NGI's Shale Daily
- Staggering 450,000-barrel drop in ND's daily oil production as 6,800 wells idled -- Fargo Forum
- Governor Burgum directs North Dakota agencies to identify budget cuts -- Associated Press
- While oil patch slows, Bakken businesses look for ways to stay afloat -- Bismarck Tribune
- MISO: Majority of coal is self-committed, 12% was uneconomic over 3-year period -- Utility Dive
- High demand for in-state contact tracers give college students an opportunity -- KXMB-TV
- Nearly $3 million in CARES Act funding headed to Minot International Airport -- KFYR-TV
- Analysis: Governor Burgum's orders may have overstepped authority -- Associated Press
- BSC and Dickinson State University to hold virtual graduations next week -- Bismarck Tribune
- Williston Public School District 1 bond proposal will still be on June ballot -- Williston Herald
- Grand Forks outbreak has other North Dakota plants on cautious alert -- Associated Press
- NDSU forecast paints a bleak picture of North Dakota economy in near term -- Fargo Forum
- Survey shows hope for late year recovery even as economic indices drop -- Associated Press
- Libertarian disavowed in Democratic-NPL primary race, runs for House seat -- Bismarck Tribune
- ND water issues, Minot flood project addressed in federal committee legislation -- KFYR-TV
- Oilfield companies find smart way to have smaller "Pick up the Patch" event -- Williston Herald
- Construction work begins to remodel North Dakota Capitol's public entrance -- Bismarck Tribune
- Williston API big fundraiser golf tournament moves date to August -- Williston Herald
- Good news: Oil surges 20%, posts fifth straight day of gains for first time since July -- CNBC
- UBS Analysts: Oil outlook for this year and next year turning much brighter -- Reuters
- Oil will hit $100 in around 18 months believes Orascom Chairman and CEO -- RigZone
- Goldman Sachs says it remains bullish on oil prices in 2021; demand recovery -- Reuters
- In win for renewables, Form Energy cuts grid-scale battery deal with GRE -- Techcrunch.com
- Global oil glut to be cut in half in May helping correct supply/demand imbalance -- Rigzone
- Texas energy regulators reject quota plan for 1 million barrel oil production cut-- Reuters
- Low transportation fuel demand and low profitability drive refinery run declines -- EIA
- COVID-19 pandemic could accelerate the arrival of peak oil demand -- OilPrice.com
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Factoid of the Week
In February 2019, a polar vortex gripped the nation creating frigid temperatures. According to a Minnesota legislator, the vortex was a “very scary period” in the state since it was “...touch and go...whether or not we could produce energy with everything that was being consumed.” It was a wake-up call for all the energy producers since the cold temperatures prohibited wind farms from working, creating a shortage of available electricity.
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May 11
On-Line
May 12
Bismarck
May 14
Bismarck
May 14
Zoom Meeting
May 15
Video Conference
May 18
Bismarck
May 19
Bismarck
May 20
Bismarck
May 27
Bismarck
May 28
Bismarck
May 29
Bismarck
June 1
Bismarck
June 2
Bismarck
June 8-11
Bismarck
June 19
Williston
August 20 - 21
Williston
September 1-3
Bismarck
September 30 - October 1
Bismarck
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Oil prices and rig count
May 8, 2020
WTI Crude: $24.74
Brent Crude: $30.97
Natural Gas: $1.82
North Dakota Active Rigs: 19 (down 11)
5/8/2019 -- 64 rigs
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Geoff Simon
Editor/Executive Director
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