June 30, 2017
ND Dept. of Trust Lands Logo

North Dakota Lands Board Prioritizes
Energy Impact Grant Funds

The downturn in oil prices has forced many government agencies to change spending plans, but the ND Department of Trust Lands hopes to meet most of its commitments to oil-impacted counties and school districts.

The Lands Board approved a recommendation this week to notify school districts in oil-producing counties, as well as Bowman and Divide Counties, that it intends to deliver at least 95% of funding commitments to the entities. In a June 7 letter to the board, the WDEA Executive Committee had urged members to prioritize existing commitments before offering a new round of grant opportunities.

The 2015 ND Legislature appropriated $140 million for energy impact grants in HB 1176, but the full amount will not be collected due to lower oil prices.  Impacted school districts were to share a total of $30 million under the bill, half of which was awarded in 2016 (see list).

The legislation also authorized $4 million each to Bowman and Divide Counties, an amount negotiated to make up for inequities in the surge bill (SB 2103) enacted earlier in the 2015 legislative session.

Royalty Dispute Likely to Land in Court

The University and School Lands Board is trying to collect millions of dollars in oil and gas royalty payments it says are owed to the state. The North Dakota Petroleum Council disagrees and is promising litigation.

The dispute began after the Land Board discovered during a recent audit that some oil companies allegedly took improper deductions for transportation, processing and other costs on royalties owed to the state. NDPC disagrees with the department's interpretation of the leases, which dates back to 1979.

Click here to read the Bismarck Tribune story.

Truck Permit Enhancements
To Be Discussed July 13

WDEA Members participating in the association’s Uniform Truck Permit System are being urged to attend a meeting July 13 to learn about plans to enhance the permit system. 

Permit system operator Janet Sanford said the enhanced system will have a new name - LoadPass Permits.  Sanford explained WDEA's plans for improving the system during an interview this week on the radio program, Energy Matters. Click here to listen to Sanford’s comments. 

Sanford said it’s important for members to attend the meeting because a proposal to pay for permit system enhancements will be on the agenda. The permit system is currently provided only in North Dakota’s oil-producing counties, but Sanford said in the coming year it will be offered to other counties in the state. Click here to listen to Sanford’s comments.

The July 13 meeting will begin at 1:30 pm at the Williams County Highway Complex in Williston.

Click here to listen to the full interview with Janet Sanford (Hour One, 40:40 mark).

Energy-Related Fire Investigation Course
Coming to Minot in September

Fire investigators and firefighters will have a chance to learn about fire hazards in the energy sector at a training class in Minot this September.

Brian Andersen, Minot’s Fire Marshall and Vice President of the ND Chapter of the International Association of Fire Investigators, said it’s a unique opportunity to learn about incidents that can happen in the oil or coal industry. Click here to listen to Andersen’s comments.

The class will be taught by Dr. Scott Davis, a nationally-known fire investigator, who was involved in determining the cause of the Deepwater Horizon explosion. Andersen said he expects attendees from all around the region. Click here to listen to Andersen’s comments.

WDEA contributed $2,500 to help sponsor the training session, which will be held September 20-22 in at the Grand Hotel in Minot. 

Anyone interested in the training can email Andersen for more information.

Click here to listen to Andersen's interview with Geoff Simon on Energy Matters. (Hour One, 26:25) 

Burgum Supports Move to Rescind WOTUS Rule

Governor Doug Burgum is fully supportive of a move by the Trump Administration to rescind the “Waters of the U.S.” (WOTUS) rule.

“Clean water is critical to quality of life and our economy, and no one cares more about clean water in North Dakota than the people who live here," Burgum said in a news release. "Today’s action is a welcome step toward a rule recognizing that states are best positioned to protect, manage and regulate their own waters. The Obama administration’s WOTUS rule was a particularly egregious example of regulatory overreach."

Read Gov. Burgum's full statement here.

EPA Administrator Scott Pruitt signed the proposed rule on Tuesday. 
State Allows Drilling Companies
to Use Little Missouri River Water

North Dakota officials have lifted a moratorium on industrial water permits, allowing the oil industry to access water from the Little Missouri River for hydraulic fracturing.

The discussion of giving the oil industry access to water from the river began this spring after a state Water Commission hydrologist found North Dakota was granting water permits for fracking and other uses that violated a state law.

State lawmakers recently voted in favor of changing the law, but Gov. Doug Burgum issued a moratorium in May that suspended temporary water permits.

Click here for the Bismarck Tribune article.

North Dakota Drought Severity Increases

Drought status was expanded this week across a large section of western North Dakota. The amount of state land gripped by extreme drought grew to 25%, up 8 percent from a week ago.

A county agent from McIntosh County noted that soil moisture is absent and crop and pasture losses are expected. Additionally, some producers are now having to haul water, and hay is less than half of normal. 

Governor Doug Burgum declared a drought emergency which allows the State Water Commission to reactivate a water supply assistance program for livestock producers in 26 counties.

U.S. Senator John Hoeven said federal drought aid is available to ranchers in 15 counties classified as being in extreme drought.  Sen. Hoeven's announcement is here
ND Congressional Delegation Presses USDA
to Review National Grasslands Road Access 

Senators John Hoeven and Heidi Heitkamp and Congressman Kevin Cramer are asking U.S. Agriculture Secretary Sonny Perdue and Attorney General Jeff Sessions to review and resolve public road and access issues in and around the Little Missouri, Sheyenne and Cedar River National Grasslands.

The delegation requested that the Trump Administration work with the state of North Dakota and adversely affected counties to find a mutually acceptable settlement to resolve the access issues, which are currently in litigation.

Click here for the news release.
Personalized License Plates Promote Lignite Industry

The Lignite Energy Council is offering North Dakotans a chance to show their support for the coal industry in the form of a personalized license for their vehicle.

Jason Bohrer, the LEC’s President and CEO, said the council came up with the idea for the plate in response to requests to help promote the industry. Click here to listen to Bohrer’s comments.

The plates cost an additional $25 at the time of registration, all of which goes into the scholarship fund. Bohrer said the program will be administered by a group put together by the lignite industry. Click here to listen to Bohrer’s comments.

Click here to find out how to apply for the plates.

Court Doesn't Stop Oil Flow
Through Dakota Access Pipeline

The Dakota Access Pipeline will continue operating for at least the next two months as both sides in the ongoing legal dispute submit briefs, responses and replies to Judge James Boasberg in the U.S. District Court for the District of Columbia.

Boasberg ruled on June 14 that the Corps of Engineers must consider the environmental justice and treaty rights impacts of a potential DAPL oil spill.

The story from North American Shale is here
American Midstream Partners Move
to Expand Bakken Pipeline System

American Midstream has launched a binding open season through July 17 for volume commitments from existing receipt points on its Bakken Shale system in McKenzie County to a newly constructed delivery point interconnecting with the Dakota Access Pipeline near Watford City.

AMID plans to expand the capacity of its Bakken system to accept more than 40,000 b/d of crude oil from field receipt points and local lease tank batteries through its truck facility south of Watford City for delivery into DAPL. The new connection is expected to enter service in August.

Click here for full details from American Midstream.
Tesoro Announces Plans for Dickinson Refinery 

The Tesoro oil refinery outside of Dickinson plans to co-process renewable feedstock along with regionally sourced Bakken crude oil to produce a five percent renewable diesel blend.

Construction is planned to begin in October with start-up expected in December.  Tesoro has applied for a $500,000 grant through the state Industrial Commission’s renewable energy program. The total cost of the project is $3.5 million.

Tesoro acquired the Dakota Prairie Refinery last year. The facility can refine up to 20,000 barrels of crude per day.

Click here to read the story from Biodiesel Magazine.

Oil Prices are Low, but Shale Oil Activity Growing

Crude oil prices may be falling, but that hasn’t been enough to stop the resurgence in the US shale oil industry.  According to oil services firm Baker Hughes, the number of rigs deployed in the US rose for a 23rd consecutive week last week, marking the longest stretch of continued growth in three decades. 

Read the Business Insider analysis here.

One reason for the continued growth is exports. The Energy Information Administration says U.S. crude oil and petroleum product gross exports have more than doubled over the past six years, increasing from 2.4 million barrels per day (b/d) in 2010 to 5.2 million b/d in 2016.

Restrictions on exporting domestically produced crude oil were lifted in December 2015. Other factors such as favorable price differentials, lower shipping costs, and rising domestic production have increased U.S. crude oil exports. U.S. production fell through the first nine months of 2016, but increased at the end of the year and has continued to increase through the first five months of 2017.

Read the EIA report with charts here

Williston Upgrades Emergency Communications System

Williston’s emergency departments will be getting an upgraded communications system and new radios to go with it, after an emergency purchase of just over $744,000 was unanimously approved during Tuesday night’s Williston City Commission meeting.

Read Renee Jean's Williston Herald Story here.
Recycling Maintains Oil Field Roads

Around 80 people from North Dakota and  surrounding states attended a demonstration in Dickinson this week to learn more about reclaiming and recycling asphalt roads.

The main takeaway from the session was that a lot of new roads have been built to support the oil industry, and now is the time to start preventive maintenance like crack sealing and chip sealing to extend the life of the road surface. Then, when the pavement has worn out or meets its life expectancy, recycling of the existing surface material with additives is going to be much cheaper than a full reconstruction.

Click here to read Curt Glasoe's report.

Click here for the Dickinson Press story.
 Quick Connect

Factoid of the Week

In 2015, North Dakota had 5.3% of the nation’s recoverable coal reserves at producing mines. Nearly 29 million tons were mined in 2015, accounting for 3.2% of U.S. production. In 2016, about 71% of North Dakota's net electricity generation came from coal, 21.5% came from wind energy, and about 5% came from conventional hydroelectric power.

Source: EIA

Upcoming Events

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

July 18
Bakken Rocks CookFest

July 19
Fishing Derby
Four Bears Casino and Marina, New Town

July 20
Bakken Rocks CookFest

July 24
ND Oil PAC Dugout Night 

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

June 30,  2017

                                                      WTI Crude: $46.07
                                                   Brent Crude: $47.92
                                                     Natural Gas: $3.04

              North Dakota Active Rigs: 58 (unchg)        6/30/16 -- 30 rigs
Geoff Simon
Editor/Executive Director

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