Plant Could Be Center for Ag and Energy Research

In what he described as "an off-the-cuff concept," the president of the North Dakota Petroleum Council floated an idea this week that could improve the future outlook for Coal Creek Station.

During a meeting of the state EmPower Commission on Monday, NDPC Present Ron Ness suggested the state consider tapping dollars from the Legacy Fund to create a $75 million research fund that could facilitate projects associated with the 1,100-megawatt electric generating plant. The plant's owner, Great River Energy, announced earlier this year it intends to shut down the facility at the end of 2022. Since that announcement, state and local officials have been engaged in frequent behind-the-scenes conversations to figure out how to save the 700 jobs associated with Coal Creek and the adjacent Falkirk Mine that supplies lignite to the plant.

Ness stressed the importance of the reliability of coal-fired generation to the state's oil producers, and believes a research fund could lead to demonstration projects that would attract investors to the state.

Click here to listen to Ness' comments.

Ness said a project that captures carbon dioxide at Coal Creek could support future enhanced oil recovery in the Bakken, and could be the catalyst that triggers other demonstration projects.

Click here to listen to Ness' comments.

The EmPower Commission, which includes representatives from all forms of energy production, was established 10 years ago to facilitate the development of a comprehensive state energy policy. Gerald Bachmeier, an EmPower member representing the ethanol industry, said leveraging the research fund with other state-owned assets, could generate all kinds of value-added projects in the state.

Click here to listen to Bachmeier's comments.

Lt. Governor Brent Sanford, an ex-officio EmPower member, said he believes the research/demo concept would be a great use for Legacy Fund dollars that the legislature may support.

Click here to listen to Sanford's comments.

Lignite Energy Council President Jason Bohrer represents coal and electric transmission interests on the EmPower Commission. Bohrer said the concept could provide a brighter future for the lignite industry.

Click here to listen to Bohrer's comments.

EmPower members have been meeting frequently through the summer months. The Commission is due to deliver its final report to the interim Energy Development and Transmission Committee on October 6.

A long-standing case regarding ownership of minerals inundated by Lake Sakakawea has been resolved by the North Dakota Supreme Court in favor of the families that filed the claim.

The lawsuit dates back to 2012 when William Wilkinson and other plaintiffs sued the Land Board to determine ownership of the minerals under land they conveyed to the Corps of Engineers for construction and operation of the Garrison Dam, but reserved the minerals rights under the property. The state resisted the claim, arguing that the water that inundates the Wilkinson property is caused by the meandering Missouri River and not Lake Sakakawea.

The court determined that subsequent legislation passed by the 2017 Legislature (SB 2134) to define the ordinary high water mark of the Missouri River before the dam was built validated the Wilkinson claim. State law distinguishes land below the high water mark as that which "the high and continuous presence of water has destroyed its value for agricultural purposes, including hay land."

A lawyer representing the Wilkinsons was quoted by the Bismarck Tribune this week saying that the family is owed more than $1 million in oil and gas royalties now held in an escrow-type count, and that the case would likely result in hundreds of additional claims for millions of dollars.

Click here to read the Supreme Court decision.

State Minerals Value Estimated at $1.45 Billion

A Watford City company presented a report to the ND Land Board this week that estimates the value of the state's oil and gas holdings at $1.45 billion.

The Land Department contracted with MineralTracker to assess the value of the state's minerals, which includes 2.6 million acres, about 20% of which are in the oil-producing counties. To no one's surprise, the report indicates the "state’s most valuable mineral assets reside in areas of proven reserves in the unconventional Bakken and Three Forks reservoirs," but also notes that the majority of the state’s mineral acreage is in areas where the existence of recoverable reserves are uncertain or even unlikely, based on geology and proven production practices.

The report was presented to the Land Board by Joel Brown, one of the founders of MineralTracker, which was recently acquired by First International Bank & Trust. Brown, who holds a degree in Petroleum Engineering from UND, continues to manage the operation for First International. He said the valuation was based on a conservative oil price forecast through the next decade, remaining below $50/barrel.

Click here to listen to Brown's comments.

The state holds interest in 8,110 well, which represents 65% of existing wells in North Dakota. The most valuable assets are in McKenzie County, where the state has interest in 2,509 wells covering 161,000 acres, with an appraised value of $608 million. The state's holdings in the other three major producing counties - Dunn, Mountrail and Williams - amount to about 4,500 wells spread over 290,000 acres, with an appraised value of more than $200 million in each of the three counties. Holdings in Billings, Bowman, Burke, Divide and Stark Counties make up for the bulk of the remaining value.

Click here to read Amy Sisk's article about the mineral valuation in the Bismarck Tribune.

The North Dakota Supreme Court issued a unanimous ruling this week that Measure 3, aimed at making sweeping changes to the state's election process, be removed from the November ballot.

The court ruled that the initiated measure failed to comply with a constitutional requirement that the petition provide would-be signers the full text of the measure. The measure circulated by a group calling itself "North Dakota Voters First," contained a section on military voting that referred to a section of state law, but petition circulators did not provide the text of the statute.

Lacee Anderson, who represents the Brighter Future Alliance which opposed the measure, said the decision vindicates many voters who said they felt tricked into signing the petition.

Click here to listen to Anderson's comments.

Anderson said the court's ruling protects the integrity of the constitution and the initiated process, but the fact that out-of-state special interests were able to fund the petition drive and get the measure on the ballot means state policymakers should take steps to protect the constitution and the state's voters.

Click here to listen to Anderson's comments.

A financial disclosure report filed with the ND Secretary shows 100% of the funding for North Dakota Voters First came from out-of-state groups. The 1,500-word measure would have radically changed the state's voting procedure and the way legislative districts are drawn. It would have created open primary elections, sometimes called "jungle primaries," and "instant runoffs" by allowing ranked voting.

Click here to read the Supreme Court decision. Anderson made her comments during an interview on the radio program Energy Matters. Click here and advance to the 28:53 mark to listen to the full interview.

North Dakota Voters will decide the fate of a measure in November that would, in effect, give them a chance to double check whether they made the right decision the first time.

Senate Concurrent Resolution 4001 requires an initiated constitutional measure approved by voters to be submitted to the next session of the legislature. If lawmakers do not approve the measure, it will be placed on the ballot again, and, if approved by voters a second time, it would become effective.

The measure was sponsored by Senator David Hogue, R-Minot, the Chairman of the Senate Judiciary Committee. When it was considered on the Senate floor in February 2019, Hogue said he sponsored the measure because it is far too easy to get a constitutional measure on the ballot in North Dakota.

Click here to listen to Hogue's comments.

The measure passed the Senate 31-16, and cleared the House 63-30. The Senate later concurred in a House amendment that clarified that a second vote would be placed only on the general election ballot.

Frac crews are beginning to return to North Dakota, and well completion numbers are climbing, but the state's top oil industry regulator says it will likely be a couple years before the state can expect any return to production growth mode.

Lynn Helms, director of the Department of Mineral Resources, said oil prices will have to climb to $55-60 per barrel before the state will see a return to normal drilling activity with about 55 rigs in operation. Helms said the state currently has just 11 active rigs, and they are all drilling on federal leases because of concern that a potential Joe Biden administration would halt oil and gas drilling on federal land.

Click here to listen to Helms' comments.

Helms, who spoke to a group of business leaders this week during a "Return to the West" session organized by the Grand Forks Chamber of Commerce, said 11 rigs can drill 20-to-25 wells per month. But he said that is far short of the 70-to-80 new wells needed to sustain production at 1.2 million barrels/day, which is about where it's believed to be today. Helms said that means the state will have to work through its inventory of more than 900 DUCs - drilled but uncompleted wells - to keep production from declining. Helms said more completions are occurring with oil prices holding steady around $40/bbl.

Click here to listen to Helms' comments.

Helms said the Energy Information Administration doesn't expect global oil demand to return to previous levels until sometime in 2022, which would generate an increase in oil drilling activity.

Click here to see the East Revisits West session on the Grand Forks Chamber Facebook page. Helms' presentation begins at the 27:30 mark.

Construction work on the Highway 83 Northwest Bypass in Minot is scheduled to begin Monday, August 31.

The project will consist of installing new approach slabs on both north and south bound bridges. It is a multi-phase project, and during phase one a 14-foot width restriction will be in place.

During the project:

The project is expected to be complete by early November. The ND Department of Transportation reminds motorists to slow down and use caution throughout the work zone. For more information about construction projects and road conditions throughout North Dakota, call 511 or visit the ND Roads map.

North Dakota is receiving $34.4 million of additional federal funding this month for transportation projects as part of the Federal Highway Administration’s annual August redistribution. The redistribution dollars represent federal transportation improvement funds that were allocated, but not used by others.

“We are investing nearly $400 million in infrastructure projects across North Dakota this year, and these additional dollars will help us move forward with more projects that will improve our state’s roads and bridges for residents, visitors and industry,” said Gov. Doug Burgum.

“The $34.4 million is the largest amount we have received in additional funding from FHWA’s annual redistribution process,” said NDDOT Director Bill Panos. “The additional federal funding enables us to move some state, city or county projects ahead sooner than originally planned.”

Over the past five years, NDDOT has received approximately $107.2 million from the FWHA annual redistribution.Each summer, FHWA redistributes unused funding for infrastructure programs to projects that are able to use the funding before the end of the federal fiscal year.

The ND Department of Transportation is scheduling a virtual public hearing to receive public comments on the Environmental Assessment for the proposed Williston Northeast Truck Reliever Route from Highway 1804 east of Williston to the intersection of Highway 2 and Highway 85 on the north.

The virtual public hearing is being facilitated by the ND Department of Transportation, the City of Williston, Williams County, the Federal Highway Administration and Ulteig Engineers.

The hearing will be available August 31 on the NDDOT website. The Public Meetings link will take users to a pre-recorded presentation and other materials.

Written statements or comments about the project must be postmarked by September 15 to Jennifer Hanley, PE, Ulteig Engineers, 3350 38th Ave S, Fargo, ND 58104. Comments should have the words “Virtual Public Input Hearing” in the heading. They may also be emailed to Hanley. Anyone with questions or who needs help submitting comments may call Hanley at 701-280-8582.

The Environmental Assessment is available by appointment for public inspection at:

North Dakota Commerce Commissioner Michelle Kommer announced her resignation this week, and plans to return to the private sector after nearly four years in state government.

Kommer will leave October 2 to operate her own business in the Fargo area. She was first appointed by Gov. Doug Burgum to serve as state labor commissioner in December 2016, and in 2017 added responsibilities as executive director of Job Service North Dakota. She served in that dual capacity until December 2018, when Burgum appointed her to lead the Department of Commerce.

“We are deeply grateful for Michelle’s service, sacrifice, versatility as a leader and positive impact on the citizens of North Dakota,” Burgum said. “Most recently, she led the Commerce team to support North Dakota businesses affected by the coronavirus pandemic. We wish her all the best as she becomes the newest entrepreneur in North Dakota.”

Gov. Burgum appointed Deputy Commerce Commissioner Shawn Kessel to serve as interim commissioner until a permanent replacement is named. Kessel, who is a past president of the Western Dakota Energy Association, ND League of Cities and the ND Insurance Reserve Fund, also served as interim commissioner prior to Kommer’s appointment.

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 in October.

Source: Institute for Energy Research

September 1-3 (rescheduled for May 11-13, 2021)

September 16 

Energy Development and Transmission Committee