September 15, 2017
North Dakota Sets Record Number of Producing Wells

There are more wells producing oil in North Dakota now than at any time in the past. The latest report from the Department of Mineral Resources (DMR) shows 13,981 producing wells. 11,951 wells or 85% are now unconventional Bakken – Three Forks wells. 2,030 wells or 15% produce from legacy conventional pools.

North Dakota oil production remains above one-million barrels of oil per day, trending slightly upward toward the end of summer, but remaining below the all time high set in December 2014.

The Director of the Oil and Gas Division, Lynn Helms said "Low oil price associated with crude oil inventories that remain near the five-year average high continues to limit drilling rig count." Read his comments with statistics here

The Director's Cut includes links for recent rule changes from the BIA and BLM as well as recent notices from the EPA that impact oil production in North Dakota.

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Estimated Billions of Dollars has been Spent in Bakken

Separately, Helms said he estimates $125 billion has been invested in Bakken oil production in North Dakota. Helms told the Williston Basin Chapter of the American Petroleum Institute it is possible that by the year 2050, Williston's population will be 60,000, twice what it is today. 

Read more from Renee Jean at the Williston Herald here
New Royalty Rules Add Transparency

Changes proposed to North Dakota oil rules aim to give royalty owners more information about deductions taken from their payments, addressing a growing frustration among mineral owners.

The Department of Mineral Resources is seeking public input on updates to oil and gas regulations, including revising a rule related to royalty statements that the state hasn’t updated in 25 years.

As prices for natural gas and natural gas liquids dropped, royalty owners noticed more deductions from their payments for transportation, processing and other costs, Director Lynn Helms said.

But often the deductions aren’t adequately explained on the statements, and several owners expressed frustration about getting answers from the oil companies.

The revised rule would require oil companies to clearly identify the amount and purpose of each deduction or adjustment made to a royalty payment.

Click here for more details from Amy Dalrymple in the Bismarck Tribune.
Legislative Committees Keep Up the Pace 
 
With 50 topics to study during the 2017-18 interim, legislative interim chairs continue to churn away scheduling  committee meetings.
 
The interim Natural Resources Committee chaired by Rep. Jay Seibel, R-Beulah, will hold its first meeting of the interim next Wednesday, Sept. 20. The agenda is dominated by discussion of high level radioactive waste, its handling and the potential for storage in North Dakota. The topic is an outgrowth of debate last year over a core drilling project to test the suitability of land in Pierce County for a high level disposal site. That effort was shut down by a vote of the county commission. See story here.
 
Also on the Resources Committee’s agenda is a study of the implications of pipeline siting legislation, which was a top issue for WDEA during the 2017 session. SB 2286 essentially consolidated the local and state Public Service Commission pipeline siting process, so it will be very important for local interests to let the PSC know their concerns when a pipeline application is filed.
 
Click here to view the committee agenda. 
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Education Funding Committee
Digs into the Issue
 
The legislature’s interim Education Funding Committee, chaired by Sen. Don Schaible, R-Mott, will hear several presentations next week about the equitability of K-12 education funding in North Dakota.
 
The Education Commission of the States will present a comparison of the state's elementary and secondary education funding system with other states. The committee will also hear from the North Dakota Council of Educational Leaders regarding state school aid calculations for certain school districts. 
 
The Department of Public Instruction will offer a rundown of taxable valuation, property tax revenue, mill levies of school districts and the basis by which in-lieu-of taxes are offset in the state aid formula. The meeting wraps up with a presentation by the Indian Affairs Commission regarding the K-12 funding system for Native American children and how it compares to funding for other school districts.
 
The committee meets Thursday, Sept. 21, at the Capitol. Click here to see the agenda.
 
Three other legislative committees also meet next week – Agriculture, Information Technology and Employee Benefits. Click here events to see the legislative calendar. 
EmPower Commission to Examine Grid Study
 
Members of the North Dakota EmPower Commission will discuss a study that, among other things, looks into the feasibility of the deployment of large-scale alternative energy. 

The study released by the US Department of Energy in August was long overdue, according to Energy Secretary Rick Perry.
 
“The industry has experienced massive change in recent years, and government has failed to keep pace,” Perry wrote in a letter that accompanied the report. “This report examines the evolution of markets that has occurred over the last 15 years. Policy makers and regulators should be making decisions based on what the markets look like today, not what they looked like years ago.”
 
EmPower members briefly referenced the study at their last meeting, but will discuss it in more detail when the group meets Monday, Sept. 18, at Great River Energy’s conference room in Bismarck. The commission is developing a draft document it refers to as Electricity Generation 101 as a means of educating policy makers and the public about changes in electricity markets.
 
Closure of coal plants in North Dakota and around the country has raised questions about the reliability of America’s energy. That concern, and its potential effects on the state’s economy, are the focus of the EmPower discussion.
 
Click here to see the agenda.

Click here to see a list of EmPower members.
Sponsorship Opportunities Available
for WDEA Annual Meeting
 
County, city and school district members of the Western Dakota Energy Association will gather November 1-2 in Dickinson for their annual meeting, and this year are offering interested entities a unique opportunity to sponsor the gathering and/or promote their business with an exhibit.
 
What’s unique about the opportunity is that all proceeds from sponsorship fees will go toward WDEA’s scholarship fund for students pursuing a career in the energy industry.
 
Companies and organizations have the option of sponsoring the opening social, the breakfast or the noon luncheon. Sponsorship benefits include recognition at the event, recognition in the annual meeting program booklet, complimentary meeting registration for attendees, as well as optional exhibit space, an associate membership in WDEA and a member profile article in WDEA’s weekly newsletter.
 
Click here for the sponsorship form.
 
Click here for the annual meeting agenda.
Fall Issue of Basin Bits on its Way to Your Mailbox
 
Subscribers to WDEA’s semi-annual publication, Basin Bits, should check their mailboxes the next few days for the fall issue of the magazine.
 
The latest edition highlights WDEA’s ongoing effort to enhance and expand LoadPass Permits, the association’s uniform permitting system for oversize trucks in the oil-producing counties. WDEA is developing a routing system that will automatically select the most appropriate route on county and township roads for an oversize load. WDEA is also gearing up to allow counties in non oil-producing counties to join the permit system.
 
The fall issue also contains articles about early results of re-frac technology, establishment of the new state Department of Environmental Quality, a look at progress on Williston’s new airport as well as the proposed Davis Refinery near Belfield, a review of legislative interim studies, and a profile of WDEA’s non oil-producing member Emmons County.

If you can’t wait for a copy in the mail, click here for an online flip version.
 
If you’d like to receive a complimentary hard copy of the next edition, send your name and mailing address to geoff@ndenergy.org.
Industrial Commission Approves Drought Aid to Ease Economic Impact

This week's Drought Monitor Index shows 98% of the state is in drought, with a slight improvement in the most severe drought areas, primarily in western North Dakota. (See the red and orange sections in accompanying map. Click to enlarge.) 

The impact of the drought can be quantified now as farmers head into fall. Reduced yields mean less earnings for farmers and the communities where farmers do business. Agriculture Commissioner Doug Goehring predicted the drought would have a $4 billion to $5 billion overall economic impact on the state, especially small towns in western North Dakota. The ND Industrial Commission approved two loan programs to help ease the financial losses of ranchers: a breeding stock rebuilding loan program and a feed cost loan program.

Click here to get the details from the Bank of North Dakota.

Amy Dalrymple's Bismarck Tribune story is here.
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Drought Reduces Predicted Pheasant Hunting Success

The state's pheasant survey shows the total number of birds is down from last year. Statistics from southwestern North Dakota indicate total pheasants were down 59 percent and broods observed down 60 percent from 2016. 

In the northwest, pheasants are down 72 percent from last year, with broods down 76 percent. 

Click here to for more information about drought impacts on pheasant hunting.
NDPC Bakken 2.0 Agenda Announced

A free education session about the latest technological trends and economic investments in one of the world’s most-recognized oil formations will be part of the ND Petroleum Council's annual meeting this year.

Dubbed Bakken 2.0, it will be held September 26 at the Alerus Center in Grand Forks.

Click here to see the agenda and/or register for the session.
 Quick Connect

  • Report says Enbridge pipeline in Minnesota not needed -- UPI





  • Op-ed: Legislators must see importance of Hub City funding -- Williston Herald




  • Denver-based firm buys properties in Dunn and McLean counties -- Williston Herald


Factoid of the Week

The deepest vertical hole ever drilled was the Kola Superdeep Borehole in northwest Russia. The scientific drilling project had one goal – drilling as deep into the earth’s crust as possible. It ended in 1989 when the borehole reached a record-setting depth of 40,230 feet. Unexpectedly high temperatures of 356°F (rather than the predicted 212°F) prevented the project from drilling any further.

Source: The Surge
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Oil prices and rig count

September 15, 2017

WTI Crude: $49.70
Brent Crude: $55.40
Natural Gas: $3.02

       North Dakota Active Rigs: 56 (up 1)      9/15/16 -- 34 rigs
Geoff Simon
Editor/Executive Director

Mike Kopp, Editor
Mike Kopp, Mykuhls Photography, Photographs