April 24, 2020 -- April Showers
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A spring thundershower rolls across the prairie in this photo captured by the Liberty station, about five miles southwest of Parshall. It was installed as part of the Wise Roads project.
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Negative Crude Price Causes a Stir
Lack of Demand Rapidly Filling Up Storage
Hearing Planned to Consider Curtailment
The price of crude oil future contracts dipped below zero Monday, causing a lot of commotion in the news media, and sending a clear signal to the industry that available crude storage capacity is nearly full.
The May contract for WTI crude closed Monday at negative $37.63 a barrel, a one-day drop of $55.90/bbl. The June contract also fell $4.60, closing at $20.43 a barrel. That marked a move into what’s known as “contango,” a condition in which future months trade at a premium to the spot price and the near term contract.
In response to low market prices, crude production in North Dakota continues to fall as more and more wells are shut in. During a special meeting of the ND Industrial Commission this week, Lynn Helms, director of the Department of Mineral Resources, estimated that about 5,000 wells have been shut down, amounting to about 300,000 barrels per day.
"What the analysts tell me that negative price means is the market's telling producers and regulators that Cushing, Oklahoma, storage is almost full, and that in the month of May it will fill," Helms said. "So the market was saying, 'do not produce and send any more crude oil to Cushing.'"
The NDIC met to discuss options available that might help the oil and gas industry. Helms told members of the commission he's keeping an eye on potential regulatory actions in other oil-producing states, which are debating government's role in reducing production levels. NDIC has authority to prorate crude oil production under
NDCC 38-08-06, limiting production to the amount "which can be produced without waste, and which does not exceed the reasonable market demand." NDIC members were reluctant to interfere in the free market, but did approve a plan to conduct a hearing into another section of state law that requires the Industrial Commission to prevent waste of oil and gas. The commission emphasized that the hearing is for information gathering only, and that state action is not imminent.
NDIC members also discussed in some detail what they're calling “Bakken Smart Restart,” which would include possible assistance from the Bank of North Dakota and the Department of Commerce. Items under consideration include zero-interest or low-interest loans, direct grants, and an oil extraction tax holiday on initial production from previously shut-in wells.
Click
here to read an Associated Press article about the NDIC meeting.
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Graner Explains How Negative Crude Price Happened
It caused a media sensation, but the fact is the price of crude oil was really never less than zero this week.
Eugene Graner, Commodity Trading Adviser with Heartland Investor Capital Management Inc., said the price in question actually referred to the May futures contract, which expired as of Tuesday. Graner said people could take advantage of the negative price only if they actually had a place to store the crude oil.
Click
here to listen to Graner's comments.
Energy market analysts estimate global oil demand has fallen 30 percent or more due to the coronavirus pandemic, causing oil prices to plummet as a result. But Graner says prices for oil futures contracts indicate the market expects demand will recover this summer and fall.
Click
here to listen to Graner's comments.
Graner said summer travel and farming activity should increase demand. But he said if supply doesn't continue to fall to more closely match demand, it's possible the same negative price scenario could occur again when the June contract expires on May 20. Graner made his comments during an interview with Steve Hallstrom and Scott Hennen on AM1100 The Flag. Click
here to listen to the full interview.
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State Launches Business Loan Programs
The North Dakota Industrial Commission today authorized the Bank of North Dakota to offer two financing programs to assist North Dakota businesses in obtaining long-term, low-interest loans to assist in the state’s economic recovery from the COVID-19 pandemic.
The loan programs are intended to help both small and large businesses to secure working capital and replenish inventory. The Small Employer Loan Fund will provide a loan of up to $50,000 to small businesses with 10 or fewer employees. The loans may be used for working capital, recurring expenses and replenishing inventory. Business owners will work with their local lender to access the program. The loan has a maximum term of 10 years and a fixed interest rate of 1%, with deferral of loan payments for up to six months.
The COVID-19 PACE Recovery Program will provide a loan of up to $5 million for businesses of fewer than 500 employees and a loan of up to $10 million for businesses with more than 500 employees. Loan payments may be deferred for up to six months, at which time the loan will term out with up to a 10-year amortization. The interest rate on the loan will be bought down by BND to 1% for a period of time, with a maximum buydown of $500,000. Unlike other PACE program offerings from BND, there is no community match required. To qualify, North Dakota businesses must have been established before Feb.15, 2020 and loan applications must be received before Nov. 30, 2020.
BND staff assessed the federal program options and visited with stakeholders as it developed the program parameters.
“The financial institutions in North Dakota deserve the appreciation of our state’s residents. They have gone above and beyond to assist their communities during this time,” BND President Eric Hardmeyer said. “Because of their partnership, we are able to provide these loans in a timely manner so businesses can be open as soon as it is considered safe.”
Through a combination of the Coronavirus Relief Fund and BND’s profits, the Industrial Commission will make $200 million available for interest buydown and $50 million for low-interest loans. The buydown will be leveraged to provide up to $2 billion in low interest loans. .
To learn more about loan program specifics, visit
bnd.nd.gov.
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Baesler: Distance Learning is Going Well
North Dakota's K-12 classrooms have been empty since March 15 when Gov. Doug Burgum issued an executive order closing schools until further notice to slow the spread of the coronavirus, but that hasn't stopped young people from learning.
A subsequent executive order directed all the state's school districts to develop distance learning plans and submit them to the Department of Public Instruction for approval by March 27. All the state's districts met the deadline, and instruction began. State DPI Superintendent Kirsten Baesler said North Dakotans should be proud of how quickly the schools put their plans together.
Click
here to listen to Baesler's comments.
Baesler said social interaction is a big part of the education process, which students aren't getting with the school buildings closed. But she said the state's teachers have figured out ways to create something similar in their virtual classrooms.
Click
here to listen to Baesler's comments.
Baesler said parents have stepped up to keep the learning process in motion. She advises them to focus on their children's emotional needs and not stress too much about their education.
Click
here to listen to Baesler's comments.
Baesler was interviewed Monday by Scott Hennen on the radio program,
What's on Your Mind. Click
here and advance to the 28:42 mark to listen to the full interview.
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Film Describes Fallacy of "Green Energy"
A new documentary produced by Michael Moore points out that wind and solar energy, long touted as the solution to eliminating emissions associated with fossil fuels, are in fact causing serious environmental damage.
The film, entitled
Planet of the Humans, shows new solar and wind farms being built after trees were cut down to clear land for them. It also shows abandoned industrial wind and solar farms falling into a state of decay.
The film's premise is that humanity must come to grips with the prospects of "catastrophic climate change," but that the green movement is on the wrong track, selling out to "wealthy interests and corporate America." The film's promoters claim the solution is not to produce adequate energy to sustain growth, but instead society should focus on "getting a grip on our out-of-control human presence and consumption."
The film goes to great lengths to disprove the claims of corporate giants like Apple that they are running on 100% renewable energy. It goes behind the scenes of a 2015 Earth Day concert that claimed to be running on solar power, uncovering the fact it was actually powered by a diesel generator.
The film exposes the hypocrisy of many well-known environmental activists including Al Gore, Bill McKibben, Richard Branson, Robert F Kennedy Jr., Michael Bloomberg and Van Jones.
Click
here to read a Forbes article about the film with comparisons of the relative cost and efficiency of renewables to the fossil fuels they are intended to replace. Click the image below to watch the 1:40 film.
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Travnicek Appointed to Head Parks and Rec
Gov. Doug Burgum this week appointed Andrea Travnicek to lead the North Dakota Department of Parks and Recreation.
Travnicek, a Minot native, returns to the state after nearly three years of service in leadership positions at the U.S. Department of the Interior, where she most recently served as deputy assistant secretary for land and minerals management. Travnicek also served as Interior’s principal deputy assistant secretary for fish and wildlife and parks, overseeing the U.S. Fish and Wildlife Service and the U.S. National Park Service. Prior to that, she served as a senior policy advisor for natural resources in the North Dakota Governor’s Office from 2010 to 2016 under Governors John Hoeven and Jack Dalrymple.
Travnicek earned a bachelor’s degree in natural resource management and zoology, a master’s degree in natural resources management and a doctorate in philosophy, all from North Dakota State University. The Parks and Rec Department has about 60 full-time employees, 16 long-term seasonal staff and a biennial budget of $43 million to manage and operate 15 statewide parks and recreation areas.
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Spring Issue of Basin Bits is on its Way
The spring issue of WDEA's semi-annual magazine
Basin Bits will soon be arriving in mailboxes throughout North Dakota, the United States and Canada.
The cover story of this issue describes the billions of dollars invested in natural gas processing and pipeline infrastructure to capture and transport the state's growing natural gas production. The image on the cover shows ONEOK’s Elk Creek Pipeline under construction. The 900-mile pipeline, completed in December 2019, runs through North Dakota, Wyoming, and Colorado. It can transport up to 240,000 bpd of unfractionated NGLs and could be expanded to 400,000 bpd with additional pump facilities.
The spring issue also includes articles describing innovative uses for excess natural gas, an update on the Wise Roads weather station project, an article about Dakota Gasification Company's urea plant, a description of efforts to address the need for new school facilities in western North Dakota, efforts to address the state's workforce needs, and details of the new Gateway to Science center now under construction in Bismarck.
Click
here to see an on-line flip version of the magazine. Readers can also click
here to view or download a PDF version of the spring issue.
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Grants Available to Public Entities
The North Dakota Department of Emergency Services conducted a briefing this week detailing the Federal Emergency Management Agency’s Public Assistance Program. The federal aid was made available after North Dakota was approved April 1 for a major presidential disaster declaration for the COVID-19 pandemic.
Through the program, FEMA can reimburse local governments, states, tribes and certain private non-profits for up to 75 percent of their eligible costs related to emergency protective measures required for the response and prevention of COVID-19.
“The categories for eligible costs through FEMA’s Public Assistance Program are fairly broad during this pandemic response, meaning there are a lot of ways in which it can provide assistance to local jurisdictions, as long as those costs were incurred to prevent and protect against the impacts of COVID-19," said Justin Messner, Recovery Section chief for NDDES.
Some of the eligible COVID-19 emergency protective measures for which the program can reimburse public entities include: emergency operation center expenses; training; disinfection of eligible public facilities; emergency medical care; medical sheltering; the purchase and distribution of food, water, ice, medicine and other consumable supplies; the movement of supplies; security and law enforcement and communications of general health and safety information to the public.
To be eligible applicants must first register for access in the
FEMA Grants Portal. Applicants can then submit their COVID-19 related expenses where they will be reviewed by FEMA and NDDES.
Click
here to view the applicant briefing video.
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A Long-Range Transportation Plan
NDDOT Seeks Input via Social Media
The ND Department of Transportation announced the launch this week of Transportation Connection, a long-range plan designed to look 20 years into the future to identify good ideas and concepts for effective transportation in the state.
“Transportation Connection is our opportunity to make transportation easy, safe and accessible for everyone in the years to come," said NDDOT Directorr Bill Panos. "North Dakotans’ voices and ideas are essential to its success. We want to hear from them directly,”
The NDDOT will use online engagement opportunities, surveys, videos, social media and direct conversations to collect information to help shape the future of transportation in North Dakota. Due to the COVID-19 pandemic, the NDDOT will slowly introduce in-person outreach as appropriate.
Here is the tentative project timeline:
- Spring – Stakeholder coordination and planning.
- Summer – Public, tribal and stakeholder online meetings and surveys.
- Fall – Needs assessment, plan preparation and scenario planning.
- Winter – Plan development and implementation.
For more information on the program, click
here.
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BND to Hold National Financial Bee
A Virtual Challenge for Young Students
Bank of North Dakota’s SAVE 529 Plan is sponsoring the first EVERFI National Financial Bee. The virtual challenge is open to students grades 7 to 10.
North Dakota students participating in the program will compete on a national level for one of three EVERFI Scholarships: 1st Place -- $10,000; 2nd Place -- $6,000; and, 3rd Place -- $4,000.
How the National Financial Bee Works:
- Sign up for the National Financial Bee
- Complete the five 15-minute lessons on important financial topics by April 30.
- Submit a short essay by May 8 on their biggest financial dream and how they plan to achieve it.
Students in grades 11 and 12 can still complete the modules and submit the essay for the opportunity to win one of the $529 College SAVE Scholarships even though they are not eligible for the EVERFI Scholarships.
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FREE Remote Learning Resources Portal
With North Dakota students studying their schoolwork at home during school closures, EVERFI is offering free resources for 20+ digital courses on topics like financial education, mental wellness, digital wellness, and more.
The
Remote Learning Resources Portal is available for students in grades K-12 and their families. With more families spending time together at home, it’s a good opportunity to spark new conversations that prepare students to manage finances for their future.
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NDPC Al Golden Scholarships
Application Process Now Open
The Al Golden Scholarship Program, sponsored by the North Dakota Petroleum Council through its philanthropic foundation, is now accepting applications for the 2020-21 school year.
The program will award up to nine $2,000 scholarships to students pursuing degrees or training in an energy-related field.
“Despite the downturn in oil and gas prices, the industry still requires a skilled, educated and knowledgeable workforce, especially as more and more current employees reach retirement age,” said Ron Ness, president of the NDPC. “The Bakken is a multigenerational play, and we will need these future energy leaders to help us create the new technologies and methods for recovering that resource for the benefit of our state and national economy and energy security.”
Scholarship winners are selected based on academic achievement, work or internship experience in the oil and natural gas industry or a demonstrated commitment to a qualified area of study. Students must be attending a North Dakota college or university and remain a full-time student for the 2020 fall semester and 2021 spring semester.
Applications must be submitted or postmarked by June 1, 2020. For qualifications and application requirements along with a list of previous scholarship award winners,
click here.
Since 2008, the program has awarded more than $70,000 to students pursuing a post-secondary education in energy-related fields.
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Write it Down on Your Calendar!
WDEA 2020 Annual Meeting
Get this date on your calendar! The Annual Meeting of the Western Dakota Energy Association will be held:
October 7-8, 2020
The Grand Williston Hotel & Conference Center
Williston, ND
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COVID-19 Useful Information Links
Here is a list of useful information resources for addressing both individual and family concerns along with pertinent information for business and employers related to managing the current coronavirus outbreak.
Information at these links is usually updated to be the most current to help focus on facts not fear, and preparation over panic.
North Dakota Information
U.S. Small Business Administration
Small Business Loans
Center for Disease Control & Prevention
U.S Department of Agriculture
U.S. Department of Housing and Urban Development
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Quick Connect
- Continental Resources halts shale output, seeks to cancel sales -- Reuters
- Oil Q&A with North Dakota Petroleum Council President and CEO, Ron Ness -- GNDC
- WTI prices fall to historic lows, Burgum talks about implications of oil rout -- Williston Herald
- Oil slowdown expected to impact local budgets; concerns abound in Bakken -- The Journal
- Schlumberger cutting 1,500 jobs, slashing spending to get through downturn -- Williston Herald
- As co-op considers closing Coal Creek, concerns play out in zoning spat -- Bismarck Tribune
- PSC amends hearing for OE2's B. Sanderson gas plant in Williams County -- Williston Herald
- Federal dollars to bolster North Dakota unemployment insurance costs -- Bismarck Tribune
- 'Protest to Put North Dakota Back to Work' held on Capitol grounds -- Bismarck Tribune
- Burgum: ND is getting set to rapidly grow contact tracing, testing capabilities -- Williston Herald
- Gov. Bullock announces 1st phase of reopening Mont. businesses, churches -- Associated Press
- Dickinson State University discuss student retention for fall semester -- Dickinson Press
- Online shopping has risen by over 200 percent in the face of coronavirus era -- KXMB-TV
- Counties, cities face reductions up to 48% for Gross Production Tax revenue -- Williston Herald
- Minot Council reviews new revenue forecast, city expects $6.3M decline -- Minot Daily News
- Williston API still planning July golf tournament, sponsorships needed -- Williston Herald
- Tioga teachers successfully adjust to new methods for instructing students -- Tioga Tribune
- Commissioners trim $5M from Joint Dispatch Center by delaying facilities -- Williston Herald
- Completion of Broadway concrete project scheduled to begin Monday -- Minot Daily News
- District 1 asks for clarification to have superintendent in charge of 2 districts -- Williston Herald
- Trump pledges financial aid to oil industry with crude dropping to near record lows -- Politico
- World's biggest oil storage firm says all space is sold except tanks in maintenance -- Bloomberg
- Foreign oil tankers are surrounding California with nowhere to go to unload -- Bloomberg
- Oil shakeout is just beginning with more production cuts and bankruptcies ahead -- CNBC
- Top five emissions reducing states are big natural gas consumers -- Energy In Depth
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Factoid of the Week
This week marked the 50th anniversary of Earth Day. According to the International Energy Agency, the U.S. emission reduction in the last 10 years has been the largest in the history of the agency. “While some may say the United States needs to be a leader in combating climate change, I would say we already are,” said Rep. Adam Kinzinger (R-Illinois).
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April 28-30
Casselton, Granville and Dickinson
April 28-30
Watford City
April 29
Bismarck
April 30
Bismarck
April 30
Bismarck
May 8
Online - Bismarck
May 14
Bismarck
May 19
Bismarck
June 1
Bismarck
June 2
Bismarck
June 8-11
Bismarck
June 19
Williston
September 1-3
Bismarck
September 30 - October 1
Bismarck
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Oil prices and rig count
April 24, 2020
WTI Crude: $16.94
Brent Crude: $21.44
Natural Gas: $1.75
North Dakota Active Rigs: 29 (down 3)
4/24/
2019
-- 62 rigs
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Geoff Simon
Editor/Executive Director
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