November 20, 2020 -- Ready for Liftoff

North Dakota oil production climbed back above 1.2 million barrels per day in September, but further increases are unlikely until demand recovers and normal drilling activity resumes.

Production peaked in November 2019 at just over 1.5 million barrels per day, but dropped sharply earlier this year due a decline in oil prices related to the global pandemic, falling as low as 858,000 bbl/day in the month of May.

Lynn Helms, director of the Department of Mineral Resources, said September production averaged 1,221,667 bbl/day, about a five percent increase over August's output. But he said further increases are not likely given the relative lack of drilling and completion activity, and the fact that most wells that were taken offline when prices dropped are once again producing oil.

Click here to listen to Helms' comments.

Helms said natural gas production also increased in September to just over 2.8 billion cubic feet per day, or about a seven percent increase over August production. He said state regulators are delighted that nearly all of the gas is being captured and processed for use.

Click here to listen to Helms' comments.

Helms said despite the downturn additional gas gathering and processing facilities are under construction to be prepared to manage the expected increase in natural gas production when drilling activity returns to pre-pandemic levels. He said it should keep gas capture levels above 90 percent.

Click here to read or download the Directors' cut. Click here to view video of Helms' November 2020 Director's Cut news conference.

The Western Dakota Energy Association has again submitted an amicus brief in support of continued operation of the Dakota Access Pipeline.

WDEA's brief was filed today with the DC Circuit Court in response to a renewed request by the Standing Rock Sioux Tribe and other plaintiff Tribes for an injunction shutting down the pipeline.

Judge James Boasberg ruled earlier this year that the Corps of Engineers' environmental analysis of the nearly 1,200-mile crude oil pipeline was inadequate under the National Environmental Policy Act. The judge invalidated DAPL's easement crossing the Missouri River between Morton and Emmons County, but neither the court nor the Corps has ordered the pipeline shut down while an environmental impact statement is prepared.

The tribes' brief alleges that the pipeline threatens its water supply, even though the water intake that feeds the system is about 70 miles downstream from the pipeline crossing. Standing Rock is represented in the case by Jan Hasselman, attorney for the environmental extremist group Earthjustice.

WDEA's brief emphasizes concerns unique to its member counties, municipalities, and school districts, primarily the extraordinary harm a DAPL shutdown would inflict on approximately 200,000 people and myriad small businesses in western North Dakota. The brief argues that the immeasurable harm must be considered as part of the equitable balancing the Court undertakes when considering "the shutdown of an already operational, safe, and vitally important artery of the North Dakota economy."

The brief also points out that shutting down the pipeline would short-circuit the ongoing recovery from the pandemic-induced economic downturn.

"Companies have been restarting producing wells slowly and gradually bringing more people back to work, but with recurring pandemic surges, progress is likely to be slow," the brief says. "The shutdown of DAPL would halt efforts to bring many oil and gas wells back online, especially since the pipeline is the most economical means of transporting product. Indeed, producers would likely start shutting in wells again and laying off people who had just returned to work. Put plain, should the Court shut down DAPL, it would also shut down a key driver of this recovery and add insult to injury."

Click here to read or download the WDEA amicus brief.

The North Dakota Supreme Court is being asked to sort out competing sections of state laws and the constitution to resolve a festering dispute between Governor Doug Burgum and lawmakers over a vacant legislative seat.

The case is the result of the untimely death of David Andahl, who won the District 8 Republican nomination in the June primary. Andahl died of COVID-19 complications on October 5, too late to remove his name from the November ballot, but voters in the district elected him anyway, along with fellow GOP candidate David Nehring.

Immediately after the election, Gov. Burgum appointed Wade Boeshans, the President of BNI Energy, to the vacant seat, arguing that the constitution gives the governor authority to fill a vacancy when no other method is provided in law. But legislators and the District 8 Republican Committee took issue with that, and this week appointed current Rep. Jeff Delzer to the position, despite the fact Delzer lost the party's nomination in the June primary.

The court heard arguments this morning to try to resolve the dispute. Attorney General Wayne Stenehjem who represented the legislature at the hearing, said Andahl's death created a vacancy, and state law (Section 16.1-13-10) provides that it be filled by the Republican committee in District 8. Stenehjem added that The Separation of Powers Doctrine prohibits one branch of government from encroaching on the responsibilities reserved for another branch.

Attorney Robert Pathroff, who represented Gov. Burgum in the case, said state law does provide a method to fill a vacancy if a legislator dies in office or resigns, but said there is no provision in state law covering the situation where a deceased candidate is elected to the legislature. Pathroff said that allows the governor to fill the seat because the state constitution (Article V, Section 8) provides authority for the governor to fill a vacancy "if no other method is provided by this constitution or by law." He also argued that the appointment of Delzer by the District 8 Republican Committee effectively disenfranchises the voters who rejected Delzer's candidacy in the June primary.

The ND Democrat-NPL Party was also represented in the proceeding, arguing that third-place finisher Kathrin Volochenko, one of the Dem-NPL nominees for the district, was actually the second top vote getter among qualified candidates, and should win the House seat.

A ruling in the case could come quickly. New and returning legislators will take the oath of office during the legislature's organizational session to be held December 1-3.

The Federal Energy Regulatory Commission opened a docket in 2018 to study whether markets properly value the resilience and fuel security of traditional baseload resources like coal. But because no action has been taken, Senator John Hoeven is pressing FERC to provide an update on efforts to ensure the resiliency and reliability of the electrical grid.

Hoeven and four Senate colleagues sent a letter to FERC Chairman James Danly, requesting that the agency outline measures it will take to evaluate grid resilience, address the challenges facing grid operators and strengthen the reliability of the grid.

Click here to listen to Hoeven's comments.

Hoeven’s letter was co-signed by Senator Kevin Cramer, and Senators Shelley Moore Capito, R-W.Va., John Barrasso, R-WY and Mike Lee, R-Utah. The letter notes the serious consequences if utilities fail to maintain an adequate reserve of baseload electric generation.

"Since 2016, the Midcontinent Independent System Operator (MISO) has had at least 30 energy supply shortage emergencies, and at least 21 of them were outside the high-demand summer period that rarely posed reliability problems in the past. More recently, the California Independent System Operator was forced to impose rolling blackouts in August, in part due to the state’s increasing reliance on intermittent energy sources such as solar and wind."

Hoeven said he has also been actively engaged in discussions regarding the planned closure of Coal Creek Station. Minnesota-based Great River Energy (GRE), the current owner of the 1,100-megawatt lignite-fired generating plant, announced earlier this year it intends to shut down the facility by the end of 2022 and replace the power with wind generation. Hoeven said he's encouraged by the behind-the-scene negotiations because the interested parties are focused on the same goals.

Click here to listen to Hoeven's comments. Click here to read Hoeven's letter to FERC.

Senator Hoeven made his comments during a podcast recorded for the Lignite Energy Council. The video will be posted later on the LEC Facebook page. Click here to see the most recent LEC podcast featuring an interview with America's Power CEO Michelle Bloodworth.

With record COVID-19 infections and hospitalizations happening in North Dakota, state officials are enacting multiple measures to ease the strain on the state’s health care providers to head off a pending capacity crisis.  

Winter sports practices and extracurricular activities, which have been temporarily suspended, will be allowed to resume November 30. Competitive events will remain suspended until December 14. The actions were announced this week in a join statement from Governor Doug Burgum, House Majority Leader Chet Pollert and Senate Majority Leader Rich Wardner.

“Our goals remain unchanged: to protect the most vulnerable, provide relief to our stressed hospitals and health care workers, keep students in school and businesses open, and preserve the winter sports season,” Burgum said. “We appreciate the constructive solutions proposed by multiple districts and associations on how they will conduct practices safely, and we will continue to work with the North Dakota High School Activities Association and others on safely resuming competitions on December 14.”

“As a former coach and educator, I understand the importance of keeping our schools open for in-person learning for students’ academic well-being and keeping students engaged in athletics and other extracurricular activities that promote their mental, emotional and physical health,” Wardner said.

“As someone with a daughter and spouse who both work in the school system, I fully support efforts to safeguard our students, faculty and staff from COVID-19 but also appreciate the impact that suspending activities can have on our young people,” Pollert said.

It took the state more than five months to reach 100 hospitalizations due to COVID-19, but just four more weeks to exceed 200 hospitalizations and only 13 more days to exceed 300 hospitalizations, according to the North Dakota Department of Health. While young adults ages 20-29 and individuals 19 and under who test positive for COVID-19 rarely require hospitalization, it’s essential for all parents and North Dakotans to understand that youth and young adults are part of the “invisible epidemic” in the rapid chain of transmission occurring in North Dakota right now, Burgum said.

Some bars and restaurants in high-risk counties weren’t following the Smart Restart recommendations to limit occupancy to 25 percent and require face coverings. Last week's actions replaced recommendations with requirements. Bars and restaurants are now required to limit occupancy to 50 percent of licensed seating capacity, not to exceed 150 people. Food and beverage can only be served to seated patrons; no stand-up service is allowed. Tables must allow at least 6 feet of physical distancing between individual parties. All staff must wear face coverings, and patrons must wear masks except when consuming food or beverages. In-person service is not allowed after 10 p.m.

The North Dakota Department of Commerce began accepting applications for Hospitality Economic Resiliency Grant today through December 4. The state has made $54 million available for the program to provide relief to bars, restaurants, entertainment venues and other businesses affected by the pandemic.

For more information on North Dakota’s COVID-19 response, visit www.health.nd.gov/coronavirus or www.ndresponse.gov.

In an effort to assist businesses that are financially impacted by the COVID-19 pandemic, the Bank of North Dakota is offering relief programs in coordination with a local lender as the borrower’s first contact. The local lender initiates the loan application with BND on behalf of the borrower.

The programs provide low cost, long-term working capital to ND businesses and cash flow to re-start a business. If a business has multiple locations, it may only submit one application. The business expenses must be for a ND-based business and may not include costs from out-of-state locations.

COVID-19 PACE Recovery (CPR) Program assists local financial institutions in providing low interest loans to support North Dakota businesses in their economic recovery due to negative impacts from the COVID-19 pandemic. Applications will only be accepted through November 30. Click here for more information and here for a fact sheet.

COVID-19 PACE Recovery II (CPR II) Program assists North Dakota businesses impacted by the COVID-19 pandemic. The program will pay interest expense accrued on eligible existing debt from April 1, 2020, through September 30, 2020. It does not need to be repaid. Click here for more information and here for a fact sheet.

Small Employer Loan Fund (SELF) assists local financial institutions and certified development corporations (CDC’s) in providing loans to assist very small North Dakota businesses in their recovery from the negative impacts caused by the COVID-19 pandemic. Loan applications must be received by November 30. Click here for more information and here for a fact sheet.

What better place to demonstrate the potential uses of drones than the heart of the oilpatch, which is typically buzzing with traffic and economic activity.

The state of North Dakota is officially launching Vantis, the first statewide beyond-visual-line-of-sight (BVLOS) network for drone technology in the nation. The 2019 Legislature appropriated $28 million for the BVLOS network to stimulate the unmanned aerial systems (UAS) business. A ceremony was held Wednesday at Williston Square (the former Sloulin Field Airport) to explain plans for Vantis and conduct a test flight to demonstrate its potential to the public.

“Vantis marks a new phase in technology and development," said Nick Flom, executive director for Vantis. "No other state has devoted the resources North Dakota has to create this infrastructure, basically an interstate road system for UAS, to open up unlimited applications.”

Shawn Wenko with Williston Economic Development said the network offers great potential. Wenko said the region is grateful for the opportunity to be the first to see it happen.

Click here to listen to Wenko's comments.

Wenko said the radar system will allow a drone pilot to sit in an office and fly the craft remotely without having to watch its flight by using the BLVOS radar and a computer.” He said its applications will benefit a variety of businesses, and will be particularly useful in reducing costs for the oil industry.

Click here to listen to Wenko's comments.

Wenko said infrastructure is being installed, and trials are planned to begin in June 2021. Ultimately, the BVLOS network will be expanded to encompass the entire state of North Dakota.

Wenko made his comments during an interview on the radio program Energy Matters. Click here and advance to the 30:50 mark to listen to the full interview.

The Department of Transportation is wrapping up work on 193 road and bridge projects throughout the state as the 2020 construction season comes to a close.

“2020 was a tremendous year for the NDDOT and the state of North Dakota,” said NDDOT Director Bill Panos. “We invested almost $400 million into the state highway system and improved all modes of transportation throughout the state.

Among the more notable projects in western North Dakota are the I-94 pedestrian bridge in Dickinson, and opening of the new Long X Bridge on Highway 85. Major construction projects by region include:

For more information about construction projects and road conditions throughout North Dakota, call 511 or check out the Travel Information Map on the NDDOT website.

The Western Roundtable, which brings together local highway managers and oil industry representatives to discuss common concerns and interests, has been postponed due to the recent surge in coronavirus cases.

The event, organized by the ND Local Technical Assistance Program, was scheduled to be held December 17 at the new Dunn County highway shop in Halliday, but for health and safety reasons has been rescheduled for a date to be determined in the spring of 2021.  

"Our crystal ball tells us to hold off on setting a new date," said NDLTAP Director Dale Heglund. "As 2021 rolls in we hope to have a better idea of how we can proceed in the spring and will then set a date."

NDLTAP coordinates planning of the event with the Western Dakota Energy Association. Heglund said

WDEA and NDLTAP considered options for a virtual meeting, but concluded that the greatest value from the event is networking, and that's not possible in a virtual environment.

"The value of the roundtable is quite simply being at the table, Heglund said. "The opportunity for local roadway leaders, city, tribal, county, and township, to share info and plan with industry leaders is best done face to face."

The Western Dakota Energy Association has installed 31 research-grade weather stations far as part of the Wise Roads project aimed at reducing disruptions in oilfield truck traffic due to road restrictions imposed following rain events. But because the new stations have thoroughly covered the major oil-producing counties, most future stations will be "downsized."

WDEA Meteorologist Jonathan Rosencrans said stations installed to date have been fully equipped to measure temperature, precipitation, wind speed and direction, plus a camera and in many cases underground probes to measure soil temperature and moisture. But Rosencrans said new stations like Long Creek, installed today in Williams County, will still have a camera, but will only measure precipitation.

Click here to listen to Rosencrans' comments.

Rosencrans said because the new stations will not measure wind speed and temperature, they can be located much closer to buildings or other structures. He said that will allow the stations, rather than depending on batteries, to be connected to AC power, generally at an oil industry location. Rosencrans said the reliable electric supply means the stations can be equipped with devices that draw more power, like heating elements to melt snow.

Click here to listen to Rosencrans' comments.

The Long Creek station installed today is located on a well pad owned by Continental Resources just north of the Missouri River about 10 miles southeast of Williston. Rosencrans said there are currently only three weather stations in western North Dakota that are equipped with heated rain gauges that allow them to measure the moisture content in winter snowfall.

Rosencrans recently provided a Wise Roads update to WDEA's LoadPass Permits advisory committee. Video of the meeting is on YouTube, his presentation starts at about the 52:00 mark.

TRADE READY: Structural & Pipe Welding 

Looking for Hands-on Projects for Students 

In an effort to build community resiliency by diversifying the skills of the local workforce, a new local trade school has been developed in Watford City. Called TRADE READY, the school is looking for projects that will provide students with hands-on welding experience under the instruction and supervision of certified welders.

In additional to structural and pipe welding, the program provides hands-on fundamentals to become a skilled, entry-level oilfield employee. In order to make a difference in the community and make the program successful, TRADE READY is looking for work in building structures that can be used in local facilities.

Items that the students can make at the Watford City location:

Students and instructors are also equipped to travel to locations. For more information, click here. send an email to Kara Glenn or call (701) 580-8483.

Source: Institute for Energy Research

January 5