ND Oil & Gas Producers Set Another Record
August Tops 40 Million Barrels, 75 Bcf of Gas
Near perfect weather in the month of August allowed North Dakota oil producers to once again smash the state’s production record, averaging nearly 1.3 million barrels per day.
Lynn Helms, director of the ND Department of Mineral Resources, announced the August production numbers at a news conference this afternoon. Average daily production was 1,291,496 barrels, about 22,000 bbl/day above the previous record set in July. Natural gas production topped 75 billion cubic feet in August, also a new record for daily average production.
Helms partially attributes the new records to the fact the industry was finally able to find enough workers to assemble a few more frac crews in July and August.
Click
here to listen to Helms’ comments.
Helms said more than two thirds of the August increase was produced on the Ft. Berthold Reservation, where gas pipeline permitting hasn’t kept pace with production. He said the lack of gas capture capacity is likely to cause problems in the future, especially when the gas capture target increases to 88 percent on November 1.
Click
here to read Lynn Helms’ Director’s Cut.
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Operation Prairie Dog Legislation Released
EDT Committee Supports Ongoing Hub City Funding
Draft legislation that would provide ongoing funding to political subdivisions in western North Dakota and the hub cities of Dickinson, Minot and Williston was distributed to members of the interim Energy Development and Transmission Committee this week.
Committee Chairman Rich Wardner has dubbed the package “Operation Prairie Dog” because much of the funding is intended to support infrastructure, which prairie dogs are always building. The legislation would revise the formula used to distribute revenue from the gross production tax (GPT) on oil and gas, and includes two new “buckets” to provide infrastructure funding to non-oil cities, counties and townships. Wardner said the measure was a compromise that likely would not have been possible during the legislative session.
“Everything takes time, and it needs time to percolate,” Wardner said when describing the legislation Tuesday at the annual conference of the ND Association of Counties. “We’d do something and it would percolate, and everybody would say, ‘no that isn’t right either, we’ve gotta do this,’ and we’d make some moves, and so I feel very good about where we’re at, and there’s probably still some more tweaks.”
The re-write of the GPT formula and compromise funding for non-oil counties was the outgrowth of an interim study of Hub City funding. Although it didn’t endorse the legislation, the EDT Committee voted unanimously in support of continued GPT funding to the three hub cities.
Click
here to read the draft bill. Click
here to see Wardner’s explanation and the proposed allocation to non-oil cities, counties and townships.
The committee also acted on another proposal. Although no specific legislation has been drafted, members voted to support the concept that the state receive a one-third share of taxes paid by the wind industry. Currently, 100% of the tax revenue stays in the county where a wind farm is located.
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State Auditor Steps Out Against Measure One
Declaring it redundant and a waste of taxpayer dollars, North Dakota State Auditor Josh Gallion announced his opposition this week to Measure One on the North Dakota ballot.
Gallion said the constitutional measure, which would establish a state ethics commission, is a “solution in search of a problem.”
Click
here to listen to Gallion’s comments.
Gallion, who was interviewed on the radio program
Energy Matters, said because Measure One would amend the state constitution, it could overlap and interfere with the duties of his office and others in state government.
Click
here to listen to Gallion’s comments.
Click
here and advance to the 29:50 mark to listen to the full interview with Josh Gallion.
Click
here to see the powers and duties of the state auditor provided in state law.
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Electric Utilities Find Areas of Agreement
It wasn’t that long ago investor-owned electric utilities and rural electric cooperatives were on opposite sides, engaged in territorial battles over the right to serve areas of North Dakota. But this week, the IOUs and RECs came together to explain many areas where the two agree.
Carlee McLeod, representing Utility Shareholders of North Dakota, and Zachary Smith, Gov. Relations Director and Legal Counsel for the ND Association of RECs, shared a podium before the Energy Development and Transmission Committee to describe areas of agreement.
Smith said while there is still competition among electric generation sources, particularly wind vs. coal, the various companies have many things in common.
“Our positions support policies that provide for safe, reliable, responsible and low cost energy for our members and consumers,” Smith said. “We acknowledge the effects of operating in different regional transmission organizations, and federal policy and international markets have on our operations, and how those operations can vary because of those differences.”
Members of the committee said they were pleased to see the positive working arrangement.
“I never thought I’d see this day back in the 2001, 2003 area … but I’m seeing it, and I’m thankful,” said EDT Committee Chairman Rich Wardner.
Click
here to see the ND Utilities Working Group Positions Summary.
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Dukart Receives County Excellence Award
Dunn County Commissioner and past WDEA Board President Daryl Dukart was recognized this week with the Excellence in County Government County Commissioners Award.
The award was presented at the annual conference of the ND Association of Counties. Dukart was first elected to the Dunn County Commission in 2010, and joined the Executive Committee of the Western Dakota Energy Association in 2015. He served as WDEA president in 2016-17.
Dukart manages a ranching operation near Dunn Center with his wife, Reyne, and his son and his family. He represents North Dakota on the National Association of Counties, is a member of the ND Oil and Gas Research Council, serves on the Killdeer Area Ambulance Board, and is Education and Meeting Planner for Dunn County Energy Development.
Three other county officials were also recognized for their work. Click
here
to see NDACo’s video announcing the award winners.
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Ouradnik Takes Over as NDACo President
Slope County Commissioner Scott Ouradnik will serve as president of the North Dakota Association of Counties in 2019.
Ouradnik, who is an ag loan officer with Dakota Western Bank in Bowman, lives in rural Slope County south of Amidon. He was first elected to the Slope County Commission in 2008. Ouradnik is a Region 8 representative for NDACo, and is also a member of the Amidon Fire Department, Amidon First Responders, and the Slope County Fair Board.
Ouradnik succeeds Ward County Auditor/Treasurer Devra Smestad, who served as NDACo president the past year.
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Advisory Committee Talks Permit Issues
Members of WDEA’s LoadPass Advisory Committee met this week to update county members on enhancements to the oversize truck permit system and hear concerns from industry and local government users.
County officials expressed concern that some “bad actors” have found ways to game the system. Some described instances where a trucking company provided a credit card with a low spending limit insufficient to cover the cost of a permit. When it is approved by a county, its status will show as “pending” because the permit fee hasn’t been paid. But counties suspect some companies may be using the pending status as proof to law enforcement that a permit has been sought for an oversize load, and later cancel the permit without paying. Others at the meeting said they believe some trucking companies are using a single permit to make multiple moves over several days.
Members also discussed methods to enforce oversize permitting requirements, and talked about adopting a method to adapt the current fee schedule to take into consideration axle weights in addition to gross vehicle weight.
Additional discussion will occur at WDEA’s annual meeting, which will be held November 7-8 in New Town. The meeting begins with a panel discussion of truck permitting issues featuring county, township, DOT and industry perspectives. Click
here to register or view the agenda.
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TREA Plans Post-election Push for Highway 85
The latest traffic numbers from the quarterly
Oversize/Overweight
load report continues to support the need to four-lane Highway 85 from Watford City to I-94. The highway is often referred to as the Theodore Roosevelt Expressway.
“We track the overweight, oversize numbers every quarter," said Cal Klewin, Executive Director of the Theodore Roosevelt Expressway Association (TREA). "They’re the highest numbers in the state for any highway and it’s a two-lane road.”
Klewin said after the election TREA will lobby the new Congress for federal dollars to match state money to expand Highway 85 to a four-lane. “We’re stressing the importance of rural highways,” he said.
The first part of the project is to replace the Long-X Bridge, the narrow through-truss bridge across the Little Missouri River. It had been thought that bids could be let on that project this fall, but now it appears that won’t happen until spring.
In a memo from the President of the Ports-to-Plains Alliance which includes the TREA, Vice-President of Operations Joe Kiely said rural highways are an important priority.
He wrote “…the Alliance will support the Administration’s Infrastructure Initiative—but only if modified to remove the bias against rural highways.”
The draft legislation in the federal infrastructure bill increases the federal gasoline tax from $0.183 per gallon to $0.333 per gallon by 2020, a 15‐cent per gallon increase over three years. The increased tax rate would be indexed to inflation before it is ultimately eliminated in September 2028.
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Quick Connect
- Governor Burgum gets an A from the Cato Institute -- TownHall
- Terry Kovacevich inducted Into NDPC Hall of Fame -- Bakken.com
- Mineral royalty owners discussion possibly forming an association -- Williston Herald
- North Dakota air remains clean, smoke from wildfires a concern -- Bismarck Tribune
- Oasis celebrates completion of Wild Basin II gas processing plant -- Bismarck Tribune
- PSC officially dismisses siting complaint against Davis Refinery -- Associated Press
- Westmoreland Coal files Chapter 11 bankruptcy, more than $1.4 billion in debt -- Denver Post
- Rural Electric Co-ops offer comments on Clean Power Plan replacement -- NRECA
- New school options focus on overcrowding at elementary level -- Williston Herald
- Researchers argue benefits of carbon dioxide outweigh any harm -- Inside Sources
- Global oil demand reaches record levels and is expected to keep increasing -- Energy in Depth
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Factoid of the Week
Transportation accounted for the largest share of U.S. petroleum consumption by sector in 2017.
·
Transportation—14.02 million b/d—71%
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Industrial —4.76 million b/d—24%
·
Residential—0.52 million b/d—3%
·
Commercial—0.47 million b/d—2%
·
Electric power—0.10 million b/d—1%
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October 14
Watford City
October 15
Bismarck
October 17-18
Rapid City
October 23
Bismarck
October 24
Bismarck
October 24
Washburn School
October 25
Bismarck
October 25
Bismarck
November 7-8
4 Bears - New Town
November 15
Bismarck
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Oil prices and rig count
October 12, 2018
WTI Crude: $71.55
Brent Crude: $80.65
Natural Gas: $3.16
North Dakota Active Rigs: 67 (up 3)
10/12/2017 -- 59 rigs
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Geoff Simon
Editor/Executive Director
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