June 19, 2020 -- Let's Play Some Golf
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Organizer Jamie Livingston explains the ground rules to golfers participating in this week's Kenmare Oilmen's Open golf tournament. The annual event attracted 32 four-person teams.
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Landowners Want Hearing on Wind Moratorium
Mercer County Schedules Special Meeting for July 1
The Mercer County Commission has received 36 identical two-page letters requesting a hearing on the county's resolution passed last month that imposed a 24-month moratorium on applications for a special use permit to construct a wind farm.
The county commission has scheduled a special meeting at 1:30 on July 1 to hear the landowners' complaint. The letter cites North Dakota Century Code
Section 11-33-10, which provides that any person "aggrieved by any provision of a resolution" may petition for a separate hearing before the board of county commissioners. The law requires that counties receiving a petition conduct a hearing with 30 days of its receipt. After conducting the hearing, the county is required to either rescind or affirm the resolution.
The petitioners indicate that the moratorium interferes with their existing wind energy lease and their right as a landowner to develop a wind energy project on their land. The landowners are likely referring to plans by an Alberta-based wholesale power developer for a 152-megawatt wind farm 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, sited on 22,000-plus acres with a planned interconnection at Great River Energy's 230-kV Stanton Substation. The company chose not to file an application when the county denied a request that it allow the minimum ground clearance for turbine blades to be 50 feet instead of 75 feet required by the current ordinance. (See
May 8 newsletter).
When it enacted the moratorium last month, the county commission was responding to reports that Great River Energy was intending to shut down Coal Creek Station, jeopardizing hundreds of jobs and millions of dollars in tax revenue in neighboring McLean County. 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 GRE's announcement sent a strong signal that the county needs to consider the consequences of additional wind development.
"The handwriting is on the wall," Schwehr said at the time. "We are in a war to save the economy of this county."
Mercer County's
resolution says it 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.
Many of those who submitted the petition indicated they were a landowner in Mercer County, but not a resident. Click
here to see the petitioner's letter.
Click
here to read more about energy-producing facilities in Mercer County.
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NDIC Okays Well Reclamation Program
Follow-up to Abandoned Well Plugging Work
The North Dakota Industrial Commission today approved a plan to spend $33.2 million in federal CARES Act funds on a program that will reclaim abandoned oil well sites.
Lynn Helms, director of the Department of Mineral Resources, described the reclamation work as "Phase 2" of another program aimed at plugging hundreds of orphan and abandoned wells. Helms said it's a great use of the federal dollars to provide jobs to workers dislocated due to the pandemic and associated oil price drop.
Click
here to listen to Helms comments.
Helms estimates the program will restore about 2,000 acres of land that can again be used for agricultural purposes. He said in addition to the federal dollars, the reclamation program will use $5 million from the Abandoned Well Plugging Site Restoration Fund and $3 million from single well bonds. The program still requires approval of the legislature's Budget Section, which meets next week.
The NDIC also officially approved orders today to confiscate more than 350 abandoned wells that are targeted for the plugging program. It will use $33.2 million in federal CARES Act coronavirus relief funds, and is projected to maintain 500-to-600 oil and gas service sector jobs.
Helms said North Dakota's program is becoming a model for the nation. He said the US Department of Energy is developing a plan to spend $1.8 billion over three years plugging some of the 57,000 abandoned wells scattered throughout the county. Helms said Kentucky has the most with 13,000, followed by Pennsylvania with 9,000 and Texas with 6,000.
Click
here to read an FAQ about North Dakota's well plugging and reclamation rules.
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Sanford: Lost Tax Revenue Still Uncertain
Sales Taxes Down Due to Lack of Drilling Activity
The economic downturn that has swept the country has resulted in huge losses of tax revenue from all taxation categories, but may have an even bigger impact in North Dakota because a lot of the state's sales tax revenue is associated with oil drilling activity.
Lt. Governor Brent Sanford, who was interviewed this week on the radio program
What's on Your Mind, said sales tax revenue losses have not been as bad as expected in the retail sector, but the amount of the long-term loss due to a significant drop in drilling is still unknown. Sanford said sales tax collections in April totaled about $50 million, compared to $68 million two years ago.
Click
here to listen to Sanford's comments.
State figures show the average completed oil well generates about $200,000 in sales tax revenue, and prior to the downturn the state had been averaging close to 100 well completions per month. Sanford said with crude oil prices rebounding close to the $40 mark, producers have started bringing wells back on line and into full production. But he said higher prices are needed to stimulate new drilling activity, which he said may not happen for quite awhile.
Click
here to listen to Sanford's comments.
Sanford said many parts of the state have returned to near-normal activity, noting that several counties, including four in western North Dakota, have not had a single positive case of COVID-19.
Click
here and advance to the 30:00 mark to listen to the full
What's on Your Mind interview.
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Today's Legacy Fund Deposit Lowest in History
North Dakota's Legacy Fund was expected to receive its lowest-ever monthly deposit today, just $10.24 million from oil tax revenue.
State Treasurer Kelly Schmidt, in an
article published in the Bismarck Tribune, said the record low deposit reflects revenue collected in May based on April oil production figures. Schmidt said the amount is about half the previous record-low deposit: $20.46 million in April 2016.
The Legacy Fund's largest monthly deposit was $117.16 million made in August 2014, a time when North Dakota production was surging and oil prices were hovering around $100/bbl.
Since its approval by state voters in 2010, 30 percent of all production and extraction tax revenue has been deposited in the Legacy Fund. As of April 30, the fund had a balance of $6.6 billion.
Schmidt said she is concerned for cities and counties determining their future budgets, given what the deposit signals in terms of lost sales and oil tax revenue.
Click
here to read Jack Dura's article about the Legacy Fund in the Bismarck Tribune.
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Education Funding Panel Confronts Reality
Many Needs Exist, But Dollars Likely to be Scarce
Members of the legislature's interim Education Funding Formula Review Committee met this week to discuss ways to improve the fairness and adequacy of K-12 funding, but in the end conceded the state's revenue picture may not allow much progress.
The committee listened to several presentations provided by the Department of Public Instruction and others, looking at ways to adjust weighting factors in the school funding formula, reducing "transition minimum" payments that provide additional money to some districts above the standard per-student payment, and considering a sparsity formula to compensate large rural districts with few students.
Tioga Senator David Rust, who is a former school superintendent, said many good ideas have been presented to the committee, but said members will be limited by the amount of money available.
Click
here to listen to Rust's comments.
Senator Don Schaible of Mott, the committee chairman, said several positive changes were enacted by the 2019 Legislature in the passage of
SB 2265, and he'd like to maintain those improvements.
Click
here to listen to Schaible's comments.
Schaible said improving the adequacy and equity of the school funding formula is a never-ending process, and he would like to enact changes that are needed.
Click
here to listen to Schaible's comments.
The interim committee includes several school administrators who serve as ex-officio members to provide legislators immediate feedback on ideas that are proposed. Schaible said he intends to conduct at least two and possibly three more meetings before the end of the interim.
Click
here to see a document presented by DPI that looks at the adequacy of funding in all public school districts, as well as an overview of the potential impacts of implementing a sparsity formula.
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East Meets West Goes Virtual in 2020
Several years ago the Grand Forks Chamber of Commerce organized a trip for its members to tour the Bakken to learn more about the oil industry and explore opportunities for mutually beneficial business enterprises. The Chamber is planning to do it again this year, but in the interest of the the health and safety of its members, will conduct virtual meetings on the Zoom platform instead of making the trip west.
The first of three sessions of "Return to the West" begins next week, June 24, from 3:00-4:30 p.m. The agenda includes presentations from four Watford City community leaders including McKenzie County School Superintendent Steve Holen, Senator Dale Patten, Businessman Joel Brown and Rough Rider Center and Community Enhancement Director Pat Bertagnolli.
Additional sessions are scheduled July 28 and August 26. Interested individuals can register for the free sessions by sending an email to
info@gochamber.org.
Click
here to see the flyer with the agenda for the first session.
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NDDOT to Offer More Self-Service Kiosks
People who live in urban areas of North Dakota have probably seen or perhaps used one of the ND Department of Transportation's self-service kiosks to renew their license tags. But thanks to COVID-19 relief funds, that convenience will soon spread to all corners of the state.
The ND Emergency Commission this week gave its blessing to NDDOT's plan to spend $17.9 million in federal funds, the bulk of which OMB Director Joe Morrissette said would be used for technology improvements that would improve service delivery.
Click
here to listen to Morrissette's comments.
Morrissette said the project is consistent with requirements of the CARES Act because it creates a service delivery method that provides for social distancing and public safety.
NDDOT Director Bill Panos said he expects the vast majority of the work will be completed by the end of the year. Panos said the kiosks could provide an opportunity to deliver additional services in the future.
Gov. Doug Burgum said the NDDOT was swamped with requests for licensing services after re-opening, which he said could be avoided if kiosks are more readily available.
Click
here to listen to Burgum's comments.
Burgum said if the state sees a resurgence in coronavirus cases this fall and winter, the kiosks will provide continuity of some NDDOT services. Existing kiosks are located in Fargo, Grand Forks, Minot, Dickinson, Williston and three locations in Bismarck. Click
here for more information about the kiosks.
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Drought Becoming a Problem in North Dakota
North Dakotans have seen a lot of warm, windy weather this spring and not much rain to go with it, the combination of which has pushed the western two-thirds of the state into the drought category.
Last year's September Soaker (see
Oct. 4, 2019 newsletter) seems like a distant memory as many of the same areas that saw up to 10 inches of rain in a single month have received less than a third of that so far this year.
Williston has received just 2.2 inches of precipitation this year, putting it more than five inches behind the normal amount of 7.36 inches. So far in June, which is typically the wettest month of the year, the area has received only 0.35 inches of rainfall. The story is much the same for Dickinson, with just 2.43 inches of moisture this year, compared to a normal of more than seven inches. Minot has received the most rainfall among western cities, but its 3.03 inches is still less than half the normal amount.
According to the
U.S. Drought Monitor, 36 percent of the state's land mass falls into the moderate drought category. Consequences are stress on crops and pastures; increasing fire danger; potential for grasshopper infestation; and pond and river levels begin to decline. The
30-day outlook doesn't offer much hope for improvement, forecasting above normal temperatures and below normal precipitation.
Click
here to read a Williston Herald article about drought impacts in Williams County.
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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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June 20 is the Deadline to Apply
for Fort Berthold Scholarships
A new scholarship fund has been established for graduating seniors on the Fort Berthold Reservation, with the goal of awarding multiple annual scholarships at $1,000 each.
Beaver Creek, LLC, a locally-owned business in New Town, started the fund this spring in order to give back to their community.
“Saving up for college is difficult enough in ordinary times, but with the added pressures and disappointments of COVID-19, as well as the sluggish economy, we wanted to provide students with better opportunities to aid in their pursuit of higher education,” said Dale Little Soldier, owner of Beaver Creek, LLC.
A
website has been created to advertise the scholarships that will be given out annually. For 2020 graduating seniors from Fort Berthold there are four different scholarships available for $1,000 each, for a total of $4,000 that will be awarded this year. Applications must be completed through the website by June 20th, and scholarships will be awarded by June 30th each year.
“This is a great way for my family to become involved in a community that has done so much to support the oil and gas industry,” said Barrett Withers, COO at Beaver Creek, LLC.
Hunting Bear, a Tier 1 energy service company, and Oilfield Support Services, located in New Town, two additional companies, have also joined Beaver Creek in helping to fund the scholarships.
The Minot Area Community Foundation, a North Dakota not-for-profit corporation, was asked to manage the endowment fund to make these scholarships perpetual. To date, the FBIR Scholarship Fund has raised $52,000 but is actively looking for additional donors. For more information, contact Barrett Withers,
barrett@beavercreekllc.com, 701-898-7061.
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Quick Connect
- EPA fines Enbridge $6.7M over safety issues in Minn. and Wisconsin -- Associated Press
- State divvies up $400M in virus aid, including dollars for protective gear -- Bismarck Tribune
- ND Democrats call for special session; Burgum says one not needed -- Bismarck Tribune
- ND Democrats say the people should have a say in CARES Act dollars -- KXMB-TV
- Complaints surface that ND group is using deception to collect signatures -- Valley News Live
- Federal judge rejects North Dakota group’s call for online signatures -- Associated Press
- Bankers say economy remains weak in rural parts of 10 states -- Associated Press
- Minot City Council to consider term limit ordinance at August meeting -- Minot Daily News
- Burgum: COVID-19 spikes in other states show danger of complacency -- Williston Herald
- Passenger traffic increasing at eight commercial airports in North Dakota -- Associated Press
- District 8 accepts plan to put Williston supt. in charge of merged district -- Williston Herald
- If Districts 1 and 8 combine, boards have to decide who will be in charge -- Williston Herald
- Stepping down: Williston school board president, Joanna Baltes, resigns -- Williston Herald
- Minot City Council permits school district’s two portable classrooms -- Minot Daily News
- City commissioners Trustem and Steiner say goodbye at last meeting -- Dickinson Press
- Sturgis City Council votes to sanction 80th annual Black Hills motorcycle rally -- KFYR-TV
- Petroleum industry: Demand grew 14 percent last month amid economic reopening -- The Hill
- JP Morgan predicts $100 oil in the future due to cyclical nature of industry -- OilPrice.com
- U.S. Supreme Court grants right-of-way to key natural gas pipeline -- OilPrice.com
- Candidate Joe Biden proposes to ban new offshore oil and natural gas drilling -- IER
- Hess Corporation ranked top energy company in Best Corporate Citizen list -- Rigzone
- End of OPEC deal could possibly mean the start of a new oil price war -- OilPrice.com
- Commentary: Does America have an orphan oil & gas well problem on its hands? -- IER
- Texas regulators eye gas flaring curb to allay Wall Street climate worries -- Bloomberg Green
- Bakken-Three Forks Shale: Wells shut-in, DUCs build as operators look to 2021 -- World Oil
- Global electricity consumption continues to rise faster than population -- EIA
- The U.S. has already lost more than 100,000 oil and gas jobs -- OilPrice.com
- U.S. coal consumption continues to decline across all sectors; peak was in 2007 -- EIA
- IEA sees largest drop in oil demand in history but predict biggest ever jump in 2021 -- CNBC
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Factoid of the Week
In 2019, wind produced 300 billion kilowatt hours of electricity and received $4.3 billion in federal subsidies. That's about $14.40 per MWh of electricity generated, close to half of the wholesale value of the electricity being produced. The Texas Public Policy Foundation estimates that wind generators on average have received nearly as much money from subsidies as they have from selling electricity into the market.
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June 23
Bismarck
June 24
On-Line
June 25
Online
June 25
Bismarck
July 2
Online
July 8
Online
July 14
Bismarck
July 15
Bismarck
July 16
Bismarck
July 22
Bismarck
August 20-21
Williston
September 1-3
Bismarck
September 30 - October 1
Bismarck
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Oil prices and rig count
June 19, 2020
WTI Crude: $39.75
Brent Crude: $42.19
Natural Gas: $1.67
North Dakota Active Oil Rigs: 11 (unch)
6/19/2019 -- 62 rigs
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Geoff Simon
Editor/Executive Director
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