June 16, 2017

ND Natural Gas Production Sets New Record


North Dakota's oil production may have declined from its peak, but the volume of natural gas coming out of the Bakken just set a new all-time high.


In the month of April, North Dakota produced more than 55 billion cubic feet of natural gas, about a 6% per day increase over the previous month. Oil production also climbed in April, averaging just over 1,050,000 barrels per day, a 25,000 bbl/day increase from March.


Natural gas production is on the rise for two reasons, according to Justin Kringstad, director of the North Dakota Pipeline Authority. Kringstad said rates of natural gas production don't decline as quickly as oil production does.  And he said many of the new wells being completed, particularly in northeastern McKenzie County, have much higher gas to oil ratios. Kringstad said some of the new wells can produce two or three times more gas than those in other parts of the Bakken.


Production of natural gas liquids or NGLs also continues to climb. NGL production in April was nearly 400,000 bbl/day, most of which was comprised of ethane and propane.


Click here to read Renée Jean's story about April production numbers in the Williston Herald.


Click here to read Lynn Helms' take on production numbers in the Director's Cut. 

Click here to read NGI's Shale Daily analysis of natural gas production.


Oil industry leaders say applying new hydraulic fracturing techniques to older wells in North Dakota has the potential to recover more oil without increasing the footprint on the land.

Click here to read how fracking is producing improved results.

Legislature Picks Interim Committee Members


The North Dakota Legislature's Management Committee met this week to form the study committees that will explore more than 50 policy issues during the 2017-19 interim.


Of primary interest to WDEA members, the interim Energy Development and Transmission Committee will again be chaired by Senator Rich Wardner, R-Dickinson. Other senators on the committee include Brad Bekkedahl, R-Williston; David Rust, R-Tioga; Jessica Unruh, R-Beulah; Jim Dotzenrod, D-Wyndmere and Merrill Piepkorn, D-Fargo.   Representatives serving on the committee will be vice-chairman Todd Porter, R-Mandan; Gary Sukut, R-Williston; Mike Brandenburg, R-Edgeley; Ben Koppelman, R-Fargo; Tracy Boe, D-Mylo and Corey Mock, D-Grand Forks.


Education funding will also be a hot topic during the interim.  Members of that committee include Senators Don Schaible (chair), R-Mott; Ralph Kilzer, R-Bismarck; Kyle Davison, R-Fargo; David Rust, R-Tioga; and Erin Oban, D-Bismarck.  Representatives will be vice-chair Mark Owens, R-Grand Forks; Pat Heinert, R-Bismarck; Cynthia Schreiber-Beck, R-Wahpeton; Mark Sanford, R-Grand Forks; Denton Zubke, R-Watford City; Dennis Johnson, R-Devils Lake; David Monson, R-Osnabrock; and Rick Holman, D-Mayville.


Click here for a complete list of all interim committees and their chairs. 

Click here to view minutes of the Legislative Management Committee’s May 31 meeting which lists all interim study topics.

PSC Enacts Wind Farm Decommissioning Rules


The ND Legislature’s Administrative Rules Committee gave its blessing this week to new rules written by the Public Service Commission that require wind farm developers to plan for the eventual decommissioning and cleanup of wind energy facilities in North Dakota.


PSC Chairman Randy Christmann likened the rules to the requirements imposed on coal mining companies decades ago.


“These new decommissioning rules demonstrate a renewed commitment by our generation to ensure that North Dakota's beautiful landscape will be returned to its splendor when giant wind turbines ultimately and inevitably reach the end of their usefulness,” he said. 


The PSC rules will require new wind farms to have an approved decommissioning plan prior to commencing operation, and developers must provide financial assurance to cover costs in the event the facility is ever abandoned. Also included is a new definition that presumes a wind facility is at the end of its useful life if its annual capacity factor is less than 10% for two consecutive years. If such a determination is made, the owner would be required to begin decommissioning within 12 months.


North Dakota currently has just under 3,000 Megawatts of installed wind capacity, and more wind farms are in the planning stages.


Click here to see a marked-up version of the rules which indicates the changes that were made. 

Davis Refinery Moves Forward Following Submission to ND Health Dept

Meridian Energy Group, Inc submitted its response to the remaining questions posed by the North Dakota Department of Health's Air Quality Division on Meridian's Davis Refinery. The response ensures the review of Meridian's Permit to Construct application will continue as scheduled.

Meridian supplied the Health Department with additional supporting data on proposed NOx and CO emissions, as well as fugitive emission estimations that will satisfy what is required for the Davis Refinery permit application.

Click here to read Meridian's News Release.

Wyoming-Montana Powder River Basin Growing Faster Than Expected

After a two-year slump in oil prices that led to a collapse in drilling, the Powder River Basin’s oil industry is showing signs of revival. The region will get a combined $600 million investment in new wells this year, and pipeline companies are drawing up plans for expansion

Click here for Bloomberg story on Powder River.

Click here for NGI's Shale Daily backgrounder on Powder River Basin. 

The Energy Information Administration says in its latest report the Permian Basin in western Texas and New Mexico is the hottest spot in the shale patch, with a 71,000-bpd increase in April. The Permian was followed by the Eagle Ford, where drillers added 36,000 bpd to total output in April. The Bakken, which the EIA last year said will become the largest source of tight oil and gas in the U.S., added 6,000 bpd to daily production.  The Niobrara added 7,000 bpd.

EIA May Drilling Report is here

McKenzie County Equips Job-seekers

The McKenzie County Job Development Authority launched an employment initiative aimed at building a regional workforce less susceptible to the boom-and-bust cycle of the oil industry.

The McKenzie County Skills Initiative brings together job training programs, classes and services offered by the University of Mary, Williston State College, and the state-sponsored TrainND program and North Dakota Small Business Development Center. They're centralized at the Rough Rider Event Center in Watford City.

Organizers say the initiative could help job-seekers with everything from computer skills to truck driving skills. The initiative comes at a time when energy production is increasing after a recent slowdown. But Job Service says more than one-third of the 3,000 job openings in northwestern North Dakota aren't in the oil fields.

How did the Watford City Job Fair go?  Click here to read Renée Jean's report in the Williston Herald.

More than a Quarter of North Dakota

in Severe Drought

After a hot and dry early June that saw temperatures top 100°, a system finally tracked across the Northern Plains, somewhat lowering temperatures and finally bringing rain (1-3 inches)  to parts of the Dakotas.

For the most part, the rains were not great enough to make sizable improvements to the drought, but where 1.5 or more inches fell, drought was reduced.

All of the state is rated abnormally dry to severe drought according to the National Drought Mitigation Center in Nebraska.

Adams County is the latest to issue a burn ban. The county commission voted to restrict any burning or fireworks “when the North Dakota Fire Danger Rating is in the High, Very High, or Extreme Rating and/or a Red Flag Warning has been issued."  The rules do allow burning when the fire danger rating is in the Low or Moderate category, but procedures dictated in the North Dakota Rural Fire Danger Guide must be followed. 

Read about it here

WDEA Exec to Host "Energy Matters"

WDEA Executive Director Geoff Simon will have a second opportunity behind the radio microphone next week, filling in as guest host for Scott Hennen on Energy Matters. Simon previously hosted the program on April 18

Energy Matters airs every Tuesday from 3:00-to-5:00 p.m. CDT on KFYR Radio. Simon's guests will include PSC Commissioner Randy Christmann to discuss the impacts of wind energy in North Dakota; Climatologist Roy Spencer will share his thoughts on climate change and US withdrawal from the Paris Climate Accords; ND Pipeline Authority director Justin Kringstad will talk about his study of re-fracking oil wells; and Senator Rich Wardner will share his thoughts on an interim legislative study of Hub City funding.

Simon will also host the program on June 27. 
Quick Connect

Factoid of the Week

The Tax Foundation finds that governments have collected $1.95 trillion in taxes from the oil and natural gas industry since 1981. The total amount of taxes collected is roughly 40% more than the industry’s combined profits. Tax collections exceeded company profits in 23 of the 27 years surveyed.

(Source: Western Energy Alliance)

Upcoming Events

June 27

July 13
WDEA Uniform Truck Permit Advisory Committee

July 16-18
North Dakota Township Officers Association conference
Grand Forks

July 17-19
Bismarck Event Center

October 4-5
Raymond Family Community Center -  Williston
Oil prices and rig count

June 16,  2017

                                                      WTI Crude: $44.71
                                                   Brent Crude: $47.29
                                                     Natural Gas: $3.03

              North Dakota Active Rigs: 56 (up 4)        6/16/16 -- 28 rigs
Geoff Simon
Editor/Executive Director

Mike Kopp, Editor
Mike Kopp, Mykuhls Photography, Photographs
Western Dakota Energy Association