July 17, 2020 -- Bird's Eye View of Long X
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This is an aerial photo of the new Long X Bridge on Hwy 85 south of Watford City. It is being built east of the current bridge over the Little Missouri River. (photo thanks to Cal Klewin)
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May Oil Production "A Five Alarm Fire"
ND Crude Output Fell 30% During the Month
Characterizing the second quarter as "a five alarm fire for North Dakota's oil and gas industry," the state's top regulator today revealed that crude oil production in May plummeted to an average of just 858,395 barrels per day.
Lynn Helms, director of the Department of Mineral Resources, said the decline amounts to a record 30% month-to-month drop from April, and is the lowest it's been since June 2013. Production is down more than 650,000 barrels per day from the all-time high of 1,519,027 bbl/day set in November 2019.
Helms' Director's Cut shows the state's producers had idled more than 6,100 wells in the month of May. He said unlike April when it was mostly conventional wells taken offline, most of those taken down in May were Bakken wells, many of which had only recently been completed.
Helms said he believes the production number rebounded some in June as oil prices climbed and wells were brought back on line, but ongoing uncertainty about oil market futures and possible shut down of the Dakota Access Pipeline (DAPL) put much additional recovery in doubt.
When asked if he thought projections by the Energy Information Administration that crude oil demand would return to pre-virus levels by this time next year, Helms said he thought that was too optimistic, and that the coronavirus pandemic will likely have a permanent impact on demand.
Click
here to listen to Helms' comments.
Helms said he thought North Dakota crude production would be back above 1 million barrels per day when July numbers are reported, but said additional re-start, drilling and well completions will depend largely on the outcome of the court decision last week that ordered the shutdown of DAPL pending additional environmental review. It's estimated the loss of DAPL takeaway capacity will ultimately add another $5.00 or more to the cost of moving the state's crude production to market, and Helms said the additional expense would have a big impact on the decisions of producers.
Click
here to listen to Helms comments.
The drop in production has resulted in a huge loss of tax revenue to the state and to political subdivisions that receive it in the "buckets" that make up the tax distribution formula. In response to a question, Helms said he expects the 2021 Legislature will have to take a serious look at reducing or eliminating buckets.
Click
here to listen to Helms comments.
Helms noted that all general fund agencies have been asked to develop a budget that reduces spending levels by 15 percent. He said the long-term impact on the state's economy and viability of industry players will depend on regulatory changes, future oil markets and court decisions.
“We’ve had a couple of bankruptcies, actually three now, but unless we get some significant price improvement and some certainty about Dakota Access Pipeline, there’s more to come,” Helms said.
Click
here to read or download Helms' Director's Cut.
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DC Court Grants Stay of DAPL Shutdown Order
A federal appeals court in Washington DC has granted a temporary stay of the order issued last week by Judge James Boasberg that the Dakota Access Pipeline be shut down and emptied while a more extensive environmental review of the project is completed.
The court granted the
motion of Dakota Access LLC, operator of the 30-inch DAPL pipeline. Boasberg's ruling determined that an environmental assessment of the project was inadequate and that a full environmental impact statement was necessary. He issued the ruling in response to persistent litigation by the environmental extremist group Earthjustice, which has represented the Standing Rock Sioux Tribe in the case.
The Dakota Access motion pointed out the nearly 1,200-mile pipeline has been operating safely for three years, and the court erred in issuing its order for a retroactive environmental review. The motion argued that the order "is unprecedented, rests on an erroneous reading of an intervening opinion from this Court that the Corps had no opportunity to consider in any event, and is unjustified under the governing law."
Boasberg's decision was based on a decision in the case of
National Parks Conservation Association v. Semonite, in
which the Corps was ordered to vacate a permit it had issued to a utility company to build transmission towers across the James River in Virginia. The Semonite decision was issued two years after the Corps’ environmental assessment.
In an
amicus brief filed in support of the Dakota Access motion, the state of North Dakota said Judge Boasberg acknowledged the "reverberating" economic harm the shutdown would cause, but "declined to meaningfully confront the devastating and irreparable impacts a shutdown will have on innocent residents of North Dakota, rather than just DAPL’s owners."
The state's brief said a shutdown "will result in literally billions of dollars in losses to North Dakota’s oil industry and will cause drastic reductions in North Dakota’s tax revenue." It went on to say, "These
definite consequences vastly outweigh the entirely speculative potential harm of a spill or leak while the remand proceeds."
The North Dakota Petroleum Council also filed
a brief in support of the Dakota Access motion. NDPC pointed out that DAPL has become a crucial component of North Dakota’s oil industry and the state’s economy, that it would be physically impossible to arrange alternate transportation for much of DAPL’s volumes in the near-term, and the cost differential of shifting transportation to rail is not economically feasible for much of North Dakota’s production.
A separate
motion for a stay was also filed by the U.S. Department of Justice (DOJ) on behalf of the US Army Corps of Engineers, which permitted the line to cross under the Missouri River. It is that crossing that is a bone of contention for Standing Rock, which claims the pipeline threatens the tribe's water supply, even though its intake is more than 50 miles downstream from the crossing.
Citing a previous court decision, the DOJ motion took Judge Boasberg to task for pandering to the tribe and pipeline opponents, characterizing the shutdown order as a "heckler's veto."
"It cannot be that 'the hyperbolic cries of highly agitated, not-in-my-backyard neighbors' can compel an agency to prepare an EIS," the DOJ wrote. "Otherwise, 'opposition' - and 'not the reasoned analysis set forth in the environmental assessment' - 'would determine whether an environmental impact statement would have to be prepared.'”
The Western Dakota Energy Association also intends to file a brief in support of the DOJ motion, along with several participating counties and cities. Details will appear in next week's WDEA newsletter.
Click
here to read an AP article about the court decision to temporarily halt the DAPL shutdown order.
Click
here to read a story from Reuters about the Tribe's intent to oppose the temporary stay.
Click
here for a Bismarck Tribune article about state & federal govt engagement in the shutdown battle.
Click
here for Renée Jean's Williston Herald coverage of the legal motions over the shutdown order.
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WDEA Facebook Post Touting DAPL Facts Goes Viral
A Facebook post published by the Western Dakota Energy Association last Thursday went viral in a matter of 24 hours, and has been viewed by more than 91,000 Facebook users to date.
The post, which contained facts about the Dakota Access Pipeline, pointing out that the line does not cross the Standing Rock Sioux Reservation, has been shared by more than 900 Facebook users. Among other things, the post points out that DAPL is entirely underground and crosses under Lake Oahe at a minimum depth of 95 feet below the bottom of the riverbed; does not encroach on the Standing Rock Sioux's water intake which has been moved about 50 miles away from the pipeline; and that the Army Corps of Engineers completed more than a year of additional study of the Dakota Access oil pipeline, substantiating its earlier determination that the pipeline poses no significant environmental threats.
It's the second week in a row one of WDEA's Facebook captured a lot of attention from users. Another post shared on July 4th about the important contribution of coal-fired generation to the power grid was viewed by more than 47,000 Facebook users and shared more than 400 times.
Click
here to see the DAPL Facebook post. Click
here to see the post thanking coal miners. Click
here to see WDEA's Facebook page.
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Gov. Burgum Welcomes NEPA Modernization
Environmental Law Cited in DAPL Shutdown Order
Gov. Doug Burgum this week applauded the White House’s Council on Environmental Quality's (CEQ) release of its final rule modernizing the National Environmental Policy Act (NEPA) regulations for the first time in more than 40 years.
“Modernizing our roads, pipelines, flood protection and other critical infrastructure is crucial to the safety and economic success of North Dakotans and all Americans, and such projects deserve a timely, efficient and effective environmental review," Burgum said. "The 40-year-old NEPA process has become overly complex and time-consuming, resulting in unnecessary delays, litigation and inflated costs that ultimately fall on taxpayers.
NEPA's mountain of never-ending red tape was used by litigants that led to Judge Boasberg's order to shut down the Dakota Access Pipeline. In their motion to block Boasberg's order, the Department of Justice and Corps of Engineers accused the judge of overstepping his authority under NEPA, attempting to inflate the significance of a narrow section of the Act's provisions.
The DOJ motion said "the court entered this order because it wanted to (1) give NEPA more 'bite'; (2) send a strong message that the Corps, Dakota Access LLC, and the oil and gas industry should not have relied on the “continued operation of this pipeline in the face of litigation”; and (3) give the Corps and
Dakota Access a powerful 'incentive to finish' an environmental impact statement 'in a timely manner.'”
Industry and construction trade groups have long complained about the overly burdensome provisions in the federal environmental permitting process. Obstructionists have used the multiple permitting obstacles and public comment periods to block major infrastructure projects, leading to lengthy delays of a decade or more that can ultimately kill a project.
The updated NEPA regulations stem from an executive order issued by President Donald Trump in 2017 establishing a two-year goal for completing environmental reviews for major infrastructure projects and directing the CEQ to consider revisions to modernize the regulations federal agencies use to implement NEPA. The regulations have not been comprehensively updated in over 40 years, with only one limited substantive amendment in 1986.
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County Affirms Wind Moratorium
Following a more than two-hour hearing two weeks ago in which it heard from supporters and opponents of a moratorium on new wind farm permits, the Mercer County Commission voted unanimously to affirm its action in a new, more-detailed version of the moratorium.
The July 1 hearing was prompted by letters from 59 landowners who had signed leases with Alberta-based Capitol Power to allow the installation of a wind turbine on their land.
Despite the two-year moratorium, Capitol Power submitted an
application for a conditional use permit to construct the 165-megawatt Garrison Butte Wind Farm on a 15,000 acre site north of Hazen near the shore of Lake Sakakawea.
The new moratorium language, developed by State's Attorney Jessica Binder, notes that the county enacted its first wind development ordinances in 2009, that it also has a moratorium on solar energy operations and only recently lifted a moratorium on frack sand mining operations.
The resolution details recent regional developments in the energy sector, notably the announcement by Great River Energy that it intends to shut down the 1,100-megawatt Coal Creek Station, and suggests the loss of its substantial generating capacity could cause reliability issues on the grid.
"A complete shutdown of CCS in 2022 could cause voltage regulation problems throughout North Dakota, and the loss of that baseload to the MISO (Midwest Independent System Operator) grid could forestall or end wind development in North Dakota, and other parts of the Upper Midwest, because that baseload loss would further weaken the reliability of the MISO grid," the resolution reads. "With all the open questions regarding CCS and its DC power line, it would be premature and harmful for Mercer County to consider permitting any wind farms that have any direct or indirect association to the CCS DC power line until the CCS and its DC power line questions are resolved."
Speaking in support of the county's decision in May to put the moratorium in place, Commissioner Merlin Dahl said it was necessary to give the county time to sort things out.
Click
here to listen to Dahl's comments.
The moratorium also points out that North Dakota wind energy laws fail to provide consumer protections for landowners that sign wind leases. The law does not require wind developers to have a purchase power agreement for the electricity a wind farm would generate, nor are they required to have an interconnection agreement to get the power on the grid. Those items were suggested as prerequisites to permitting at the July 1 hearing by McLean County State's Attorney Ladd Erickson. That possibility was endorsed by Commissioner Duane Scheurer, who made the motion to affirm the moratorium.
Click
here to listen to Scheurer's comments.
The resolution indicates that during the moratorium period, the county's planning and zoning commission will conduct a full review of county ordinances related to wind energy and wind-related operations. The resolution directs the zoning commission to "study whether revisions to current ordinances are appropriate, including whether inclusion of the following in the application process should be required: environmental and wildlife impact study, historical and artifact study, interconnection service agreement, and power purchase agreement."
Click
here to watch the video replay of the July 15 meeting. The commission's discussion of the wind farm moratorium begins at the 2:35:25 mark.
Click
here to read Bismarck Tribune's moratorium coverage. Click
here to read a Fargo Forum article.
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State Releases K-12 Restart Guidelines
Strategy to Assist with Fall Reopening Plans
Gov. Doug Burgum and State Superintendent Kirsten Baesler released K-12 "Smart Restart" guidelines this week to help North Dakota school districts plan for reopening this fall.
The guidance was developed in collaboration with education associations, tribal leaders, stakeholders and interim State Health Officer Andrew Stahl. The guidelines emphasize local control and decision-making by school boards and administrators in consultation with local public health units, and are based on guidance from the ND Department of Health, the U.S. Centers for Disease Control and Prevention, and other resources.
Because the state acted so swiftly to close schools to in-person instruction on March 15, just four days after North Dakota’s first COVID-19 case was identified, officials have yet to manage in-person teaching and learning for the state’s 121,000 K-12 students during the pandemic.
“We’re entering new territory this fall with a dual purpose: to focus on providing the highest-quality education for all students and safeguarding the health and safety of students, staff, families and communities,” Burgum said.
Baesler said the K-12 Smart Restart guidance gives school boards and administrators information they need to make decisions for the education of children while keeping communities safe.
“North Dakota’s children are looking to us as adults to help them adjust to life with COVID-19," Baesler said. "They will be watching us and looking to us for answers, guidance and security."
The K-12 Smart Restart guidance requires each district’s school board to approve a Health and Safety Plan in consultation with their local public health unit. Among other requirements, the plan must identify a COVID-19 team or coordinator to oversee the district’s health and safety preparedness; protocols for social distancing; and processes for identifying and protecting children and staff at higher risk with an opportunity for continued distance teaching and learning. Districts also will need to have a school board-approved, updated Distance Learning Plan on file. Local communities can decide if teaching and learning should be conducted face-to-face, via distance learning or a combination of the two.
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Williston Basin Petroleum Conference
POSTPONED AGAIN: Moving to May 2021
The Williston Basin Petroleum Conference has been postponed until May 11-13, 2021. The conference was originally rescheduled for September 2020 from the original conference date in May 2020. The North Dakota Petroleum Council said that continued travel restrictions around the country and the world related to the COVID-19 pandemic was the basis of the decision.
“We are committed to bringing the best value to our conference attendees and exhibitors, and selecting the right date to maximize attendance and participation is crucial to making this conference a success,” said Ron Ness, NDPC President. “While things are open and moving in North Dakota, we understand that our industry members across the country are still facing travel constraints. We are excited to host the Williston Basin Petroleum Conference next May, and looking forward to bringing our industry together.”
The conference has become the most important event for business development and networking in the oil and gas industry in North Dakota and the Rocky Mountain region. Organizers are working with experts to ensure a COVID-safe conference, including planning for social distancing, frequent sanitizing of high-touch areas, and daily temperature checks.
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The Future of North Dakota Roads
LTAP Statewide Webinar Set for Next Week
The North Dakota Local Technical Assistance Program (LTAP) will conduct a
webinar next week to provide a comprehensive look at efforts to improve the state's road network.
LTAP, which is part of the Upper Great Plains Transportation Institute, is offering the free webinar to any and all local government employees or elected officials involved in local transportation planning and construction. The webinar, which will be delivered via the Microsoft Teams platform, is scheduled July 21 from 1:30 to 4:00 p.m. CDT. Registration is
not required. Below is the preliminary agenda for the webinar:
UGPTI Local Roads Needs Study Update, 2021-2040
• History, Purpose, Overall Process – Dale Heglund
• Unpaved Roads/Traffic Forecasts - Alan Dybing
• Paved Roads/GRIT – Brad Wentz
• Bridges/Summary – Tim Horner
Information on roadway costs and projections for the next 20 years will be shared.
State Funding and Property Taxes for Infrastructure
• NDACo, Terry Traynor and Genny Dienstmann
How does our local transportation network get funded? NDACo will provide an update on its efforts to support local transportation leaders.
Bridge Inspection and NDDOT Information
• NDDOT, Bryon Fuchs
Bridges are a critical component in our roadway asset mix. The NDDOT Local Government Division will provide an update on the new local government bridge inspection program and related efforts.
Western Dakota Energy Association Updates
• Operation Prairie Dog and Oil Tax Review – Brent Bogar
• LoadPass Statewide Update - Janet Sanford
• Wise Roads – Geoff Simon
The discussion will begin with an overview of Operation Prairie Dog and oil tax revenue, followed by a review of LoadPass oversize truck permitting and the latest enhancements to that process, including plans to expand statewide. You’ll also receive an update on the Wise Roads weather station project .
NDDOT Transportation Connection − A Shared Vision for Transportation in 2045
• NDDOT, Stewart Milakovic and Rebecca Geyer
The session will end with an invitation to help set the course for our future through a unique NDDOT Planning Division public input process.
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North Dakota to Study Impaired Driving
Learning Collaborative Includes Four States
The National Governors Association has selected North Dakota to be one of four states to participate in a six-month Learning Collaborative to address impaired driving. The goal of the program is to strengthen and leverage data to develop strategies to reduce drunk and drugged driving-related injuries and fatalities.
North Dakota’s team includes six members representing the Governor’s Office, the ND Department of Transportation, the ND Highway Patrol, the ND Department of Health, and NDSU Upper Great Plains Transportation Institute.
“In 2019, 42% of crash fatalities in North Dakota were alcohol-related,” said NDDOT Director Bill Panos. “Using a data driven approach will allow us to further advance enforcement, education and policy strategies to help reach the Vision Zero goal of zero motor vehicle fatalities and serious injuries."
The Learning Collaborative is funded by a grant from the Centers for Disease Control and Prevention.
North Dakota’s objective is to improve data collection through identified standardization and evidence-based processes to inform DUI prevention policy, education/outreach, treatment, enforcement, prosecution and adjudication to decrease impaired driving crash fatalities and serious injuries. The team will develop an action plan to adopt and implement lessons and strategies learned, and work with the NGA Center staff to review progress and challenges.
To learn more about North Dakota’s efforts to reduce impaired driving, go to
Vision Zero.
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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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Quick Connect
- Economy remains weak in rural parts of 10 states including North Dakota -- Associated Press
- Applications being accepted for coal research and marketing program -- Bismarck Tribune
- Regulators approve Excel Energy's plan to run two MN coal plants part-time -- Fargo Forum
- Pacific Steel is giving well-plugging nonprofit Well Done a big boost -- Williston Herald
- COVID-19 outbreak in Tioga connected to out-of-state workers at Hess plant -- Tioga Tribune
- Street interviews: North Dakotans react to Burgum’s K-12 school announcement -- KXMB-TV
- Colleges will return in the fall both with in-person and online classes resuming -- KFYR-TV
- Dickinson School District may buy Halliburton complex for CTE center -- Dickinson Press
- Building a second high school in Minot would require a bond issue -- Minot Daily News
- Williston Area Chamber of Commerce cancels 2020 Rockin' Ribfest -- Williston Herald
- New swimming pool is making a big splash in Crosby; draws in shoppers -- KFYR-TV
- Rain has stayed moderate drought in northwest ND but the land is still dry -- Williston Herald
- Divide County commissioners question need for another new radio system -- Crosby Journal
- NW North Dakota Community Foundation Relief Fund grants total $85,000 -- Williston Herald
- Oil prices broadly stable on Friday as stimulus hopes balance corona fears -- Reuters
- OPEC and allies to ease cuts, allow more oil production on demand growth -- Associated Press
- Blocking pipeline projects likely means fewer jobs and more CO2 emissions -- Inside Sources
- Enviros take stimulus loans after attacking energy companies for the same -- Western Wire
- Activist's reveals true goal is to eventually stop all oil and gas development -- Energy in Depth
- Climate alarmists push "it's worth than we thought" meme, models wrong -- Real Clear Energy
- The oil lobby finding plenty of problems with Joe Biden's new climate plan -- Washington Post
- Facebook’s "science" censors label accurate climate skepticism “false” -- Real Clear Energy
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Factoid of the Week
During the permitting process, Dakota Access LLC held 602 meetings with community leaders, tribes, businesses, agricultural and civic organizations, and local elected officials. Forty-three of these meetings were open houses, regulatory hearings and public input meetings. In North Dakota, 140 pipeline route deviations and 17 route adjustments were made to the pipeline based on this input.
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July 20
Online via Microsoft Teams
July 21
Online via Microsoft Teams
July 22
Bismarck
July 22
Online
July 23
Bismarck
July 30
Bismarck
August 4
Bismarck
August 13
Bismarck
August 20-21
Williston
September 1-3
(rescheduled for May 11-13, 2021)
Bismarck
September 30 - October 1
Bismarck
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Oil prices and rig count
July 17, 2020
WTI Crude: $40.59
Brent Crude: $43.14
Natural Gas: $1.72
North Dakota Active Oil Rigs:11 (unchg)
7/17/2019 -- 56 rigs
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Geoff Simon
Editor/Executive Director
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Your copy should address 3 key questions: Who am I writing for? (Audience) Why should they care? (Benefit) What do I want them to do here? (Call-to-Action)
Create a great offer by adding words like "free" "personalized" "complimentary" or "customized." A sense of urgency often helps readers take an action, so think about inserting phrases like "for a limited time only" or "only 7 remaining!"
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