North Dakota oil production rebounded to just under 1.1 million barrels per day in June, continuing its recovery from a steep decline due to powerful spring blizzards that shut down thousands of wells. 

Lynn Helms, director of the Department of Mineral Resources, reported this week that oil production was up 3.5 percent in June, while natural gas production jumped 9.7 percent to 3.06 billion cubic feet per day. Helms said he expects July production numbers to be even higher, but August numbers may drop because of unexpected pipeline and processing plant outages.

Click here to listen to Helms' comments.

Helms said there are currently 16 frac crews working to complete wells, which he said is adequate to keep pace with the number of wells being drilled by the 45 rigs operating in the state. However, he said additional drilling activity is being limited by the industry's inability to hire workers for rigs and frac crews.

Click here to listen to Helms' comments.

Helms said North Dakota producers realized an average price of $111.35/bbl during the month of June, but that had tailed off to $88.25 on Tuesday when Helms held his monthly Directors Cut news conference. When asked about the impact of the misnamed Inflation Reduction Act on North Dakota production, Helms said it will be mostly negative.

Click here to listen to Helms' comments.

Helms said federal leasing policy and regulations are also concerning, particularly in Tier 3, which is well outside the most productive play in the Bakken core.

Click here to listen to Helms' comments.

Helms said North Dakota currently has 17,284 wells in operation, a new all-time high. Just under 15,000 of those are unconventional horizontal wells in the Bakken and Three Forks formations.

Click here to read or download Helms' Directors Cut.

For the second time this year, the state received no applications for grant funding to support construction of a major natural gas pipeline to eastern North Dakota.

The grant opportunity was authorized during a special session of the ND Legislature last November. Lawmakers appropriated a total of $150 million, the bulk of which would be devoted to an east-west pipeline, with up to $10 million allocated for a pipeline to serve the Grand Forks area from the Viking Pipeline which runs through western Minnesota.

The state previously received no bids by the May 1 deadline in the first go-round of the grant opportunity, after which the ND Industrial Commission extended the deadline to August 15. Justin Kringstad, director of the ND Pipeline Authority, said he would report the news to the commission, which would have the option of extending the application deadline a second time.

Click here to listen to Kringstad's comments.

Kringstad said WBI Energy has been the only company to publicly express its interest in the cross-state project, but ultimately sent a letter in April indicating its reasons for not submitting an application. Kringstad said other pipeline companies were also investigating the opportunity, but all concluded there was too much market uncertainty to pursue the project.

Officials are aggressively seeking ways to identify more uses for natural gas in the state because production is expected to continue to grow as the gas-to-oil ratio rises. Kringstad reported a new record GOR of 2.79 in June, meaning the state is producing 2,790 cubic feet of gas for every barrel of oil that comes out of the ground.

If state exceeds its natural gas pipeline takeaway capacity, producers would be forced to choke back oil production to meet gas capture targets. Legislators have discussed the possibility of increasing the grant amount if $150 million was not sufficient to attract interest, but the next session will not convene until January 2023.

The so-called Inflation Reduction Act signed into law this week by Joe Biden includes direct-pay tax credits for electric cooperatives to deploy CO2 capture and other new energy technologies.

The bill passed by Congress will provide direct federal payments to co-ops when they deploy new energy technologies, including carbon dioxide capture, nuclear, energy storage and renewables.

Mac McLennan, president and CEO of Minnkota Power Cooperative, said direct-pay incentives could help the co-op develop groundbreaking CO2 capture technologies. Minnkota is evaluating Project Tundra, an effort to build the world’s largest CO2 capture facility at Milton R. Young Station near Center, ND.  The $1 billion project is designed to capture 90% of carbon dioxide emissions from flue gas, and store them more than a mile underground near the plant site.

“Passage of this legislation is certainly a positive and will be beneficial to us as we continue to look at Project Tundra,” McLennan said. “It greatly improves the prospect of seeing projects like Tundra move forward.”

McLennan has been working for 20 years to achieve parity for co-ops on tax incentives, and he is gratified to see Congress finally act on the issue.

“This is a very good day not just for Tundra but for all co-ops,” he said.

With passage of the legislation, co-ops have parity with for-profit utilities, which have long captured tax credits to develop wind, solar and other renewable energy projects. Historically, not-for-profit co-ops have not had access to those credits because most of them do not pay federal income taxes.

The legislation also creates a $9.7 billion grant and loan program designed specifically for electric co-ops that buy or build new clean energy systems. The program will provide funding for renewable energy, CO2 capture, battery storage, nuclear power and improvements to generation and transmission efficiency. Co-ops will be eligible to receive an award for up to 25 percent of project costs.

The August deposit of oil tax revenue in North Dakota's Legacy Fund was nearly $103 million, the highest total since 2014, which was the last time crude prices surged above $100 per barrel. 

The highest monthly deposit in the fund dates back to August 2014, with a record of just over $117 million, at a time when oil prices peaked at $107/bbl. The lowest monthly deposit of $9.4 million was recorded in July 2020 when oil prices dropped under $20/bbl at the outset of the COVID-19 pandemic.

North Dakota voters approved the Legacy Fund in 2010. It receives 30 percent of the revenue generated by state taxes on oil and natural gas production and extraction.

Total lifetime deposits in the fund now exceed $7 billion. Including earnings, the Legacy Fund balance stands at $8.24 billion as of May 31, 2022.

Click here for more information about the Legacy Fund on the state treasurer's website.

ND Senator John Hoeven is skeptical that Senate Democrats will follow through on a deal struck by West Virginia Sen. Joe Manchin to include provisions requiring the federal government to hold oil and gas lease sales on federal lands and waters, in exchange for Manchin's support of the so-called Inflation Reduction Act.

In an interview with Larry Kudlow on Fox Business this week, Hoeven said in order to actually expand the nation's oil and gas production, Congress needs to follow through on the lease deal and federal regulators must issue permits to drill.

Click here to listen to Hoeven's comments.

The legislation requires the federal government to reinstate Lease Sale 257, an offshore lease sale stretching across 80 million acres in the Gulf of Mexico, and to hold three other offshore lease sales that the Biden administration abruptly canceled in May. Another provision of the bill ties new renewable energy leases to additional fossil fuel leases, prohibiting the Interior Department from issuing wind or solar permits unless it issued an onshore oil and gas permit and at least two million acres of land was leased for oil and gas development. 

Hoeven said he has good reason to be skeptical if any new leases or permits will be issued because previous actions of the Biden administration have been hostile to the oil and gas industry.

Click here to listen to Hoeven's comments.

The U.S. Department of Energy has announced up to $6 million available for research and development projects that will repurpose domestic coal resources for products that can be employed in clean energy technologies such as batteries and advanced manufacturing.

DOE officials say expanding innovative uses for coal and coal wastes has the potential to create local job opportunities for power plant communities as the country seeks to reduce carbon dioxide emissions.

Potential projects selected will support DOE's Carbon Ore Processing Program, which focuses on converting coal and coal wastes into products such as graphite and carbon metal composites and alloys. Coal’s structure and composition also make it well suited as a raw material for producing high-value carbon products like carbon nano-materials, activated carbons, and graphite, which may be used for computer memory devices, LED lighting, solar photovoltaic cells, batteries, capacitors, sorbents, catalysts, membranes, and medical imaging.

Eligible applicants include companies, academic institutions, and research coalitions. Applicants must register and submit application materials through FedConnect no later than October 6.

The ND Department of Transportation, along with Vision Zero, has begun its newest highway safety corridor project on Highway 85 between Belfield and Watford City.

Safety corridors include enhanced safety features and increased law enforcement, reminding drivers of their responsibility to obey all traffic laws and posted speed limits. The 70-mile project is expected to be complete in October.

“Safety corridors are a tool that combines engineering, enforcement and education to help us reach the goal of zero fatalities on North Dakota roads,” said NDDOT Director Bill Panos. “Safety corridors work towards reducing crashes, and also to serve as a reminder to drivers to always take personal responsibility when traveling.”

The corridors are a Vision Zero strategy to eliminate motor vehicle crash fatalities and serious injuries on state roads. They have been recognized by the American Association of State Highway and Transportation Officials as “delivering a more reliable, well-functioning, and/or safer transportation system through operational solutions the following year.”

Drivers will notice additional signage signaling reduced speed, no-passing zones, information about road conditions, and reminders to buckle up, drive sober, and distraction-free. Additionally, pavement markings will be more visible, especially in dark or wet conditions.

Learn more about Vision Zero's goal to eliminate fatalities here. 

Get the date on your calendar! The annual meeting of the Western Dakota Energy Association will be held:

October 12-13
Rough Rider Center
Watford City, ND

The opening day of the meeting will feature a presentation and musical performance by Watford City singer/songwriter/author Jesse Veeder Schofield. Her remarks will wrap up an afternoon that will also include Lynn Helms' status report on North Dakota oil production, an update on pipeline takeaway capacity and efforts to develop new uses for natural gas, updates regarding LoadPass Permits and Wise Roads, and the latest energy research at the Energy and Environmental Research Center. Opening day concludes with a networking social that will include a brief update on plans to widen Highway 85 to four lanes between Watford City and Interstate 94.

Day Two features a preview of the 2022 General Election, a discussion of electric reliability concerns, a report on development of the Bakken Area Skills Center, an update on efforts to provide a solution for TENORM disposal in North Dakota, a report on interim legislative activity, a panel of legislators and school administrators who will discuss education issues, keynote remarks from Lt. Governor Brent Sanford, and an update on industry efforts to preserve and enhance the state's lignite industry.

The meeting concludes with election of the WDEA Executive Committee. Board members up for election who are eligible to serve an additional three-year term include Stanley City Councilman Zach Gaaskjolen and Alexander Superintendent Leslie Bieber. WDEA members will also choose a new county representative to the Executive Committee to replace Daryl Dukart, who is not seeking re-election to the Dunn County Commission. There is also currently a vacant board position to be filled by an education representative from the oil-producing counties.

Click here to see the tentative agenda. Sponsorships and exhibit space are also available. Click here for sponsor/exhibit opportunities. Registration will open soon.

Drone technology is rapidly developing, particularly in northwestern North Dakota, but most people are probably not aware that multiple drones can be synchronized to put on a spectacular light show.

Fans attending the 14-year-old Babe Ruth World Series this week in Williston were treated to a display that featured 200 drones flying around to portray words and images in the sky.

The event was sponsored by Cardon Global, TrainND Northwest, Williston Economic Development, Williston Convention and Visitors Bureau, Dunlevy Drones and Firefly Drone Shows. The "In the Mix Media Group" captured video of the display, and set it to the music of Alma Cook’s “5000 Candles," which is a tribute to North Dakota oilfield workers.

Click here to watch the video.

Wise Roads weather stations are equipped with high resolution cameras that capture stunning shots of weather as it happens across the landscape of western North Dakota. But this week, one of the weather stations on the ND Agricultural Weather Network (NDAWN) grabbed a photo of one of three tornadoes that touched down this week in McLean County.

The Wise Roads project (Weather Information System to Effectively Reduce Oilfield Delays and Disruptions) was developed by WDEA to increase the efficiency of the movement of oilfield truck traffic. Most weather stations were placed in the core area of Bakken production, focusing on Dunn, McKenzie, Mountrail and Williams Counties. The project provides more accurate weather information to county road managers, especially about rain events, to minimize the need to impose weight restrictions when gravel roads get wet. It was developed in partnership with NDAWN, which maintains the stations for WDEA. The project was also assisted with a $250,000 grant from the Oil & Gas Research Council.

Thus far, 45 new stations have been installed, 36 of which are located in the four core counties. Prior to the start of the project, Dunn and McKenzie Counties had just one station each, Mountrail County had three and Williams County had four. Click here to see a map of the station locations. Weather station data and high resolution photos can be found at wiseroadsnd.com. Additional information is also available from NDAWN. 

Featured shots this week are clockwise from upper left, NDAWN's Turtle Lake with a shot of a tornado about to touch down, Ray 4N with a Wednesday evening rainbow, Medicine Hole 9NW with a thunderstorm approaching from the west, and Epping 2SE, with a tranquil Thursday evening sunset and a nearly clear sky. Click the link for a high resolution photo of each site.