The Senate Energy and Natural Resources Committee heard nearly two hours of testimony today on a bill that would compel the ND Public Service Commission to consider the impact on electric reliability when siting a new generation facility.

HB 1315, introduced by Hazen Rep. Anna Novak, is aimed at addressing concerns that increasing amounts of intermittent wind and solar generation are threatening the economic viability of baseload coal plants and other 24/7 electricity sources, potentially leading to power blackouts. The bill was effectively gutted in the House, but Novak pitched an amendment to the bill that requires the PSC to consider the "adverse effects of new non-dispatchable electric energy conversion facilities on reliability for retail markets."

Novak said it is the PSC's responsibility to ensure residents have reliable electricity. She said state regulators argue that it's the job of regional transmission organizations to maintain reliability, but Novak said it's not happening.

Click here to listen to Novak's comments.

WDEA Executive Director Geoff Simon testified in support of Novak's amendment. Simon said the siting act's statement of policy already requires the PSC to consider "system reliability and integrity," but the commission instead focuses only on the environmental aspects of a project. He argued that every electron of intermittent wind generation added to the grid makes it less reliable, and the problem continues to worsen and will inevitably lead to blackouts.

Click here to listen to Simon's comments.

The language in the amendment was drafted by McLean County State's Attorney Ladd Erickson, who said he checked with the Federal Energy Regulatory Commission to ensure the language was appropriate. Erickson said federal law enacted in 2005 assigns responsibility for electric reliability to the states.

Click here to listen to Erickson's comments.

PSC Commissioner Julie Fedorchak opposed the bill, as did lobbyists for the state's investor-owned utilities, the wind industry and Basin Electric Power Cooperative. Fedorchak said the regional transmission organizations have begun to step up, assigning a higher value to baseload generation facilities. She said there are different reasons for pushing a transition to so-called "clean energy," but saving money isn't one of them. Fedorchak said adding wind and solar will raise power prices, which is why she would like to see the developers of new generation foot the bill for transmission needed to deliver the power to the grid.

Click here to listen to Fedorchak's comments.

The committee took no action on the bill, and left the hearing open for additional testimony at a hearing scheduled for March 23.

Click here for a fact sheet on how to prepare for a blackout from the Federal Emergency Management Agency.

A study prepared by the Center for the American Experiment estimates it will cost Minnesota ratepayers $313 billion to reach the state's recently-enacted mandate that it obtain 100% of its electricity from carbon-free sources by the year 2040.

Isaac Orr, one of the authors of the study prepared by the Minnesota-based think tank, said because of the intermittent nature of wind and solar generation, it will require the state to build 12 times more wind and solar farms in the next 17 years, than it has in the past 15 years.

Click here to listen to Orr's comments.

Orr, who was interviewed this week by Robert Bryce for his Power Hungry podcast, said connecting all the new generating facilities to the grid will also require the construction of an additional 5,800 miles of transmission lines. The details are contained in a report entitled, "The High Cost of 100 Percent Carbon-Free Electricity by 2040." Click here for additional details or to download the report.

The legislation passed the Minnesota Legislature on a party-line vote, with all Republicans voting against it. Orr said GOP members offered amendments including one suggesting the mandate be dropped if power blackouts occur, but he said it was rejected by Democrats. He said that's when his organization began referring to the legislation as "The Blackout Bill," and the name stuck. 

Click here to listen to Orr's comments.

The North Dakota Industrial Commission is considering a lawsuit because the Minnesota law attempts to prevent the importation of power from North Dakota generating facilities in violation of the Interstate Commerce Clause. Action is pending in hopes that the Minnesota Legislature will offer an amendment that the law only applies to power generated in Minnesota, not power that is sold in Minnesota. 

Click here to watch the full Power Hungry podcast on YouTube.

The oil and gas industry in North Dakota generated more than $42.6 billion in gross business volume in 2021, employing nearly 50,000 people and producing $3.8 billion in state and local tax revenues. 

The numbers were shared this week by Gov. Doug Burgum in announcing an updated industry impact study prepared by researchers from North Dakota State University. Burgum touted the taxes and royalties paid by the industry that support the state’s significant investments in infrastructure, schools, communities and tax relief.

Click here to listen to Burgum's comments.

NDSU researchers Dean Bangsund and Nancy Hodur studied the economic contribution of oil and gas exploration, extraction, transportation, processing and capital investments to the state. Similar studies have been conducted every two years since 2005, when oil was about a $3 billion industry. Their findings show North Dakota’s oil and gas industry directly employed 14,200 people in 2021, while economic activity from the indirect effects of the industry supported an additional 35,185 jobs. Employment compensation, which includes wages, salaries and employee benefits, was estimated at $3.9 billion.

Bangsund said that while the pandemic made the last few years challenging, the oil and gas industry has learned how to maintain production through efficiencies and most of the industry’s key economic metrics are at or near pre-COVID levels.

“The North Dakota oil and natural gas industry’s economic contribution to our state has been very stable even through challenges, and it remains incredibly resilient,” Bangsund said.

Another recent study conducted for the Western Dakota Energy Association and ND Petroleum Foundation showed the industry has paid more than $27 billion in taxes since the start of the Bakken boom in 2008. The money supported $5.9 billion for local communities and infrastructure, over $1.8 billion for K-12 education, $1.4 billion for water and flood control projects, over $1 billion for property tax relief, and $32 million for outdoor heritage projects across the state. Another $8 billion in oil and gas taxes went into the Legacy Fund, which benefits future generations.

“The impact of the oil and natural gas industry can be seen throughout the state. From education funding to property tax relief to infrastructure funding, every county and community has and continues to benefit from this industry,” said WDEA Executive Director Geoff Simon.

Click here for more information about the industry's impact or to download the NDSU report.

In the question and answer session that followed a news conference announcing results of an oil industry impact study, Governor Doug Burgum gave a ringing endorsement to legislation under consideration that would repeal a high oil price tax trigger.

HB 1286, which has already passed the House and had a hearing this week in the Senate Finance and Taxation Committee, would remove the trigger that increases the oil extraction tax from 5% to 6% when oil hits a pre-determined price. The trigger kicked in last year when oil topped $100 per barrel and remained at the higher tax rate for five months.

Burgum said the bill amounts to a windfall profits tax, which the industry and North Dakota policy makers oppose at the federal level, so it sends the wrong message to have a similar tax at the state level.

Click here to listen to Burgum's comments.

Burgum said business and industry look for a stable tax policy when making investment decisions, which he said means if North Dakota wants to attract capital to support more drilling activity, the state's tax policy must be predictable.

Click here to listen to Burgum's comments.

The Senate Committee took no action on the bill. The amended version still has a component of the trigger in it, which will remain unless and until the Mandan, Hidatsa and Arikara Nation agree to its removal. The tribe has a compact with the state, which includes agreements on tax policy. The legislation gives MHA the option to opt in to repeal of the trigger, but if it chooses to do so, the tribe cannot later opt out.

Even though North Dakota produces more than 3 billion cubic feet of natural gas per day, there are still more than 300 communities large and small in North Dakota that do not have natural gas service.

HB 1170, introduced by Rep. Craig Headland, would make new natural gas pipelines to communities more economical by exempting new lines from property taxes for the first 15 years of operation.

PSC Commissioner Julie Fedorchak testified in support of the bill before the Senate Finance and Taxation Committee this week. Fedorchak said the tax exemption probably won't help most communities, but she said it could help a few.

Click here to listen to Fedorchak's comments.

The bill was supported by Kristine Anderson, who works in regulatory affairs for Dakota Natural Gas, a company that recently brought natural gas service to Mayville, Portland, Hillsboro and Drayton. Anderson said it's a shame that the state has such an abundant supply of natural gas, but so many communities don't have gas service.

Click here to listen to Anderson's comments.

Anderson said the legislation would make new service pipelines more economical because property taxes are a significant expense for gas utilities.

Click here to listen to Anderson's comments.

Research shows that nearly two dozen of North Dakota's unserved communities have a population greater than 1,000 people. The Senate Committee took no action on the bill. The legislation previously passed the House on a 92-2 vote,

The Senate Energy and Natural Resources Committee heard discussion this week on a bill that would create a new category for oil wells with enhanced oil recovery (EOR) potential.

HB 1272 would authorize the ND Industrial Commission to establish a new EOR well status that will allow oil producers to identify wells that still have potential despite lowered production. EOR status would ensure well bores and infrastructure remain viable and ready once new technology, policy and economics align for enhanced oil recovery.

Arnegard Rep. Jeremy Olson introduced the bill, calling it forward thinking and a means of supporting local communities through the booms and busts of the oil industry. 

Click here to listen to Olson’s comments.

Ron Ness, President of the ND Petroleum Council, also spoke in support of the bill. Ness said that while the bill may appear modest in comparison to other legislation being considered, it is an important piece of efforts being made by the legislature this session. 

Click here to listen to Ness’s comments. 

“The goal of House Bill 1272 is to keep the wells in play,” said Ness in his written testimony. “This can happen with a simple change in the way the Department of Mineral Resources regulates the industry. If this was a main street business, we would do this in a heartbeat to keep a business open. The time to act is now before these well bores begin to disappear.”

Kyle Gardner, Vice President of Cobra Oil & Gas, explained the importance of the residual oil zones found within the state and cited an example of a 40-year-old well now producing its highest revenue checks after sitting idle for many years.

The bill previously passed the House on a unanimous 94-0 vote. The Senate committee did not act on the bill.

Members of the House Industry, Business, and Labor Committee heard testimony this week on a bill aimed at establishing a child care stabilization program  intended to increase the number of child care workers to enable more parents to enter the workforce. 

SB 2301, introduced by Fargo Senator Ryan Braunberger, would provide monthly payments to each of the state’s licensed child care providers to be used toward staff wages and benefits. The goal of the payments is to incentivize child care workers to remain in the industry, and avoid passing increased labor costs on to families. Several of those who spoke in support of the bill cited labor as the highest cost the state’s providers face, and that staffing shortages are the greatest challenge limiting their profitability.

Braunberger said that the state's child care infrastructure is currently able to accommodate only 35 percent of the care needed. He said that one care provider can, on average, support 17 families. Consequently, each care provider that closes leaves 17 families without care. 

Click here to listen to Braunberger’s comments. 

Those who supported the bill said there are many issues affecting the state's child care infrastructure and called for a multi-faceted solution. Braunberger's bill is one of several aimed at promoting child care availability and affordability to support workforce development. Senate Minority Leader Kathy Hogan introduced the package as a "three legged stool" by which to stabilize child care.

Click here to listen to Hogan's comments. 

Committee members questioned whether it was constitutional or the role of state government's to subsidize child care costs paid by families, along with which approach to the problem is the appropriate one to take. Those in support of the bill conceded that one solution or approach would not be enough to alleviate the crisis, but that doing nothing would result in greater child care and workforce shortages. 

Click here to listen to Braunberger's comments.

Committee members also inquired whether the child care industry could allow the free market to dictate pricing as a means of addressing availability and demand. Nick Archuleta, speaking on behalf of North Dakota United, argued that "the free market has failed child care."

Bill Bauman, Director of the Bismarck YMCA, said he doesn't believe market forces are the solution.

Click here to listen to Bauman’s comments. 

The legislation previously passed the Senate 25-22. The House committee did not take immediate action on the bill.

The Senate Energy and Natural Resources Committee is considering a bill that would make any climate control regulations of an international organization unenforceable in the state. 

HB 1108 was introduced by Minot Rep. Jeff Hoverson, who joked that this was the shortest bill of this session. During the Senate committee hearing, Hoverson described it as a wall of protection for the state against the growing global "woke" agenda in regards to climate change policies. Hoverson said the bill looks out for "kids and our grandchildren.” He called on legislators to pay attention to the agenda of global extremists.

Click here to listen to Hoverson’s comments. 

While the original version of HB 1108 included both international and federal climate regulations, the bill was amended to remove the federal component. The committee questioned whether the amendment would allow the federal government to impose international regulations in the state.

The bill previously passed the House by a vote of 80-11. The Senate committee took no action on the measure. 

The ND Senate gave final approval to a bill this week that will require K-12 school districts to submit reports to the state that describe safety measures taken to protect students and faculty.

It's natural to be concerned about safety in the wake of recent school shooting incidents around the country. The original version of HB 1337, introduced by West Fargo Rep. Ben Koppelman, would have required all districts to spend 15 percent of their state aid funding on school safety. But administrators opposed the mandate, describing in detail the steps they've already taken to prepare for potential threats.

Jamestown Senator Cole Conley, who carried the bill on the Senate floor, said rather than enact a spending mandate, members of the House Education Committee decided they wanted more information from schools to determine if more should be done.

Click here to listen to Conley's comments.

The bill requires that the first safety report be submitted by December 1, so legislators will have two years of data to evaluate when they convene for the 2025 session.

The North Dakota Senate has killed a bill that would have expanded the use of loans from the Coal Development Trust Fund for school construction projects to include unanticipated inflation.

HB 1185 would have added inflation as another category for which loans could be made from the fund, which receives 15 percent of coal severance tax revenue. To be eligible under current law, a school district has to demonstrate an unanticipated construction project, an unanticipated replacement project, or an emergency repair. 

Minot School Superintendent Mark Vollmer spoke in support of the bill in both the House and Senate Education Committees. During his testimony, Vollmer cited an example of the extraordinarily rapid inflation seen in his district between the passage of a bond issue and receiving construction bids.

Click here to listen to Vollmer’s comments. 

In addition to creating a loan category for inflation, the bill would also increased the maximum loan amount from $2 million to $5 million and lowered the interest rate from 2 percent to 1.5 percent. Aimee Copas spoke to both committees on behalf of the North Dakota Council of Educational Leaders. During the Senate hearing, Copas described the bill’s ability to significantly reduce property taxes by lowering the interest rate paid on a bond.

Click here to listen to Copas’s comments. 

Despite the supporting testimony, the Senate Committee rejected the bill. Opposition testimony came from Mott Senator Don Schaible, who discouraged the committee from creating a loan category to address inflation.

Click here to listen to Schaible's comments.

The bill had passed the House on a vote of 90-0, but was soundly defeated in the Senate on a 43-3 vote.

With funding from a federal grant, Bismarck State College plans to offer a free two-week training session later this month that would provide students a foundation to start a career in the oil and gas industry.

This basic training will allow attendees to gain the technical expertise required to become a laborer, floor hand or roustabout. It would offers students the opportunity to gain entry-level employment in an oil and gas career that could lead to future career options within the ranks of service and energy companies.

The two-week certificate (80 hours) will be a combination of classroom, hands-on and simulated instruction at BSC’s National Energy Center of Excellence and Mechanical Maintenance facilities. Instruction will cover more than a dozen training modules that include:

• Introduction to the Oil and Gas Industry
• Safety and Health First Aid
• Hand and Power Tool Identification
• Measurements and Equipment
• Parts Identification
• Preventive Maintenance and Lubrication
• Piping, Tubing and Hose Connections
• Basic Mechanics
• Fall Protection Principles
• Basic Rigging, Equipment

There are abundant job opportunities in the oil and gas sector.  ND Job Service indicates that roustabout is one of the fastest growing careers in North Dakota with an increase of almost 1,000 jobs expected by 2030. Paired with labor force exit openings and occupational transfer openings, it adds up to more than 4,600 open jobs in North Dakota.

The training will be offered March 20-31. Click here for additional information, or contact BSC at 701-224-5651.