FEBRUARY 2016
COMPLIMENTARY
boomingbasin.com INSIDE THIS EDITION
Oil slump continues. Page 3
Building boom continues. Page 9
Minot Daily News P.O. Box 1150 Minot, N.D. 58702
Change Service Requested
Oil production in N.D. counties. Pages 10-15
Flaring issue Cramer: More regs aren’t needed By ELOISE OGDEN Regional Editor eogden@minot
More regulations are not needed, said Congressman Kevin Cramer, R-N.D., in response to the U.S. Department of Interior’s announcement Friday of proposed regulations to regulate methane emissions from flaring on federal and tribal lands across the country, including North Dakota. Cramer said these regulations have nothing to do with protecting the environment and everything to do with shutting down the oil and gas industry in this country. “The president’s commitment to an extreme environmental agenda at the expense of a sound energy policy will adversely impact many businesses and cause job losses throughout the country. We do not need more regulations to limit the impact of flaring on the environment. The oil and gas industry understands the value of capturing the methane gas and using it to meet America’s energy needs,” Cramer said. Interior Department officials said the proposed rule on venting, flaring and leaking will help curb waste of the nation’s natural gas supplies, reduce harmful methane emissions and provide a fair return on public resources for federal taxpayers, tribes and states. Developed by Interior’s Bureau of Land Management, the proposed rule would require oil and gas producers to adopt currently available technologies, processes and equipment that would limit the rate of flaring at oil wells on public and tribal lands, and would require operators to periodically inspect their operations for leaks, and to replace outdated equipment that vents large quantities of gas into the air. Operators would also be required to limit venting from storage tanks and use best practices to limit gas losses when reSee FLARING — Page 4
Natural gas is flared from an oil well near Parshall.
AP File Photo
Existing federal rules 35 years old Dakota Resource Council and Taxpayers for Common Sense on Jan. 19 sent letters to the North Dakota congressional delegation and Gov. Jack Dalrymple, urging them to publicly support strong federal rules to limit the release of natural gas into
the atmosphere from oil and gas drilling on impact. “Oil and gas companies operating on federal lands. The two groups said it was imperative federal lands may release unlimited that leaders at the Bureau of Land Man- amounts of natural gas through venting or agement hear from elected officials in the states where this rule will have the most See RULES — Page 4
THE BOOMING BASIN
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February 2016
boomingbasin.com
Volume 4, No. 2 • February 2016
PERSONNEL Publisher: Steve McLister Editor: Michael Sasser
The Booming Basin Minot Daily News, P.O. Box 1150, Minot, ND 58702 Send email to: bobenchain@minotdailynews.com CORRESPONDENCE Please send all correspondence regarding editorial content to Michael Sasser, editor, or call 701-857-1959. TO ADVERTISE To place an ad in The Booming Basin, call Jim Hart at 701-857-1963 or your Minot Daily News Sales Representative at 701-857-1900. DISTRIBUTION Please send all correspondence regarding distribution to Kolby Jensen, or call 701-857-1998. The Booming Basin is published monthly by the Minot Daily News, 301 4th Street Southeast, Minot, North Dakota 58702. Copyright © 2014. No part of this publication may be reproduced in whole or in part without permission from the publisher. All rights reserved.
TABLE OF CONTENTS Flaring issue............................................1 Oil slump continues ..................................3 Exxon says oil and gas will still dominate
energy in 2040 ........................................4 Legendary coach named keynote speaker for
2016 petroleum conference ......................5 State treasurer says N.D. can adapt to new
economy ................................................5 Pipeline permit ........................................6 U.S. seeks to limit methan gas ‘flaring’ at
drilling sites ............................................7 Pipeline project permits now approved in
three states ............................................7 Bakken briefs ..........................................8 School nearly finished ..............................9 Oil production in N.D. counties ............10-15
February 2016
THE BOOMING BASIN
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Oil slump continues Report suggests oil industry flop will carry on By JILL SCHRAMM
Staff Writer jschramm@minotdailynews.com The continued drop in oil prices – now at $20 a barrel – has North Dakota rig counts falling with likely no reversal this year, according the latest report of the North Dakota Oil & Gas Division. “Oil price weakness is now anticipated to last through this year and is the main reason for the continued slowdown,” Lynn Helms, director of the Department of Mineral Resources, stated in Friday’s monthly Director’s Cut. “Operators are now committed to run fewer rigs as oil prices continue to fall.” The drop in oil price is associated with a weakening Chinese economy and the anticipation that sanctions on Iran will be lifted, Helms said. The number of drilling permits fell from 152 in October to 95 in December as oil companies position themselves for expected low prices in 2016, he said. “Operators have a significant permit inventory should a return to the drilling price point occur in the next 12 months,” he said. The good news is November oil production, the latest for which records are available, was up by about 5,200 million barrels a day over October. The state produced an average of 1.17 million barrels of oil daily in November, while gas production hit an all-time high of more than 1.66 million cubic feet per day. The state’s record oil production was 1.2 billion barrels a day, set in December 2014. As of Friday, the drilling rig count stood at 49, down from 64 in December. The number of active rigs is the lowest since August 2009 and 78 percent lower than the peak of 218 rigs on May 29, 2012, Helms reported. By county, rig count was: Divide, down 77 percent from the March 2013 peak; Dunn, down 74 percent from the June 2012 peak; McKenzie, down 72 percent from the January 2014 peak; Mountrail, down 88 percent from the June 2011 peak; and Williams, down 88 percent from the October 2014 peak. The number of producing wells fell by 113 from October’s record high to 13,077 in November. The Director’s Cut noted 81 percent of wells are now unconventional Bakken and Three Forks wells while 19 percent are from legacy conventional pools. More than 97 percent of drilling now targets the Bakken and Three Forks formations.
File Photo
Three pumping units bring up oil on a Mountrail County pad during the peak of North Dakotaʼs oil production. Production has dipped only slightly but new drilling continues to slow. Activity on the Fort Berthold ® 199,962 barrels of oil per Reservation consists of: day. ® 11 drilling rigs, of which ® 1,417 active wells two are on fee lands and nine on The Director’s Cut reported U.S. natural gas storage is above trust lands.
the five-year average, indicating stable to lower prices in the future. North Dakota shallow gas exploration could be economical in the future but is not at the cur-
rent price, Helms wrote. The November Bakken gas flaring rate was 15 percent. The historical high for flaring was 36 percent in September 2011.
Flaring
THE BOOMING BASIN
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moving liquids from wells. The new measures would also clarify when operators owe royalties on flared gas, and ensure that BLM’s regulations provide congressionally authorized flexibility to set royalty rates at or above 12.5 percent of the value of production. Currently the Environmental Protection Agency and the state of North Dakota regulate air quality in the state. In a May 2014 letter, the North Dakota Industrial Commission urged BLM to adopt flaring regulations which copy the successful ones already in place in the state. Cramer said one of the justifications used by the administration for the implementation of these new regulations is the purported environmental and health problems associated with greenhouse gases. “Even with the dramatic increase in oil and gas development in the state there is no justification for the BLM to adopt these rules because the state’s current regulations protect the environment,” Cramer said. “In fact, the American Lung Association has scored all North Dakota counties with an A
grade in its 2015 “State of the Air” report card. The BLM’s new rules duplicate the successful regulatory efforts already in place in North Dakota and create a paperwork and compliance nightmare for many small businesses.” Western Energy Alliance officials, based in Denver, said the proposed rule announced Friday to reduce venting and flaring from oil and natural gas operations is redundant with state efforts and lacks justification. Instead of new federal regulations, BLM could do more to support President Obama’s climate change goals by encouraging natural gas development and recognizing industry’s success reducing emissions. “We support the goal of capturing greater quantities of methane and reducing waste gas, but a commandand-control regulatory approach is not the most effective way to meet that goal, particularly one that exceeds BLM’s jurisdiction,” said Kathleen Sgamma, vice president of government and public affairs at Western Energy Alliance, in a news release. “Industry has achieved dramatic emission reductions without federal regulations. Through technological innovation driven by market
forces, industry has greatly increased gas capture and reduced leakage rates. Since 1990, oil and natural gas producers have decreased methane emissions by 21 percent even as natural gas production has climbed 47 percent – all without federal regulation. Our industry is no longer the largest manmade source of U.S. methane emissions. The new BLM regulation is simply another case of a federal government fix to something that’s already work well,” she said. In developing the proposal, the BLM engaged in substantial stakeholder outreach, including a series of public forums in 2014 and 2015 to consult with tribal and state governments and to solicit stakeholder views. The BLM held public meetings in North Dakota, Colorado, New Mexico and Washington, D.C., and also separate tribal outreach sessions. The agency also accepted informal comments generated as a result of the public and tribal outreach sessions. The public will have 60 days to submit comments on the proposal once it is published in the Federal Register. The BLM also plans to hold a series of public meetings on the proposed rule in February and March.
February 2016
Exxon says oil and gas will still dominate energy in 2040 DALLAS (AP) — The way oil giant Exxon Mobil sees it, the global energy landscape won't be radically different in 2040 than it is today. Oil and gas will remain king, accounting for an even slightly larger share of the energy supply. Coal will fall behind natural gas to become the third-largest source of energy. Exxon forecasts that emerging renewables such as solar and wind power will triple but remain small — just 4 percent of the world's energy. And carbon emissions will continue rising until around 2030, when cuts in industrialized nations gain traction lead an overall reduction. Those are some of the highlights in the long-range outlook that Exxon Mobil Corp. released Monday. It is not likely to win an enthusiastic response from environmentalists, including some of the company's dissident shareholders, who point to record global temperatures in 2015 and want a quicker pivot away from oil, gas and coal and faster progress to bring down carbon emissions Exxon officials say their report is a dispassionate forecast, not a political document. "Exxon Mobil uses the outlook to develop business strategies that underpin our billion-dollar investment decisions," William Colton, the oil giant's chief strategist, said in an interview. "We have every incentive to get it right." A great deal has happened since Exxon's last long-term outlook in December 2014. Oil prices have plunged lower for longer than anyone expected. International sanctions that kept Iran largely out of the world oil market were lifted. And international negotiators meeting in Paris reached an unprecedented agreement to reduce the growth in emissions linked to climate change. Yet Exxon's new forecast is strikingly similar to the old
Rules
AP Photo
This photo shows the sign for the ExxonMobil Torerance Refinery in Torrance, Calif. Energy stocks fell far more than the rest of the market in 2015 as the price of crude oil plunged. one. Its main predictions: — Global energy demand will rise 25 percent from 2014 to 2040, led by developing nations in Asia, Latin America and the Middle East. The International Energy Agency recently forecast a one-third increase by 2040. — Oil use will grow 25 percent in that period, although it will account for a slightly smaller share of overall energy, and use of natural gas will jump 56 percent. — Together, oil and gas will account for 57 percent of the world's energy, up from 56 percent in 2014. — Coal's share will slide from will slip to 20 percent from 26 percent. —Nuclear and biomass will each account for 8 percent of energy in 2040, hydro 3 percent, and other renewables 4 percent. Exxon thinks alternative fuels will become a staple in power generation but grow more slowly in transportation because of technology and cost issues. — Carbon emissions will rise about 11 percent between 2014 and 2040. Emissions will fall 21 percent in industrialized nations but rise 32 percent in developing ones, notably India and countries in Latin America. Exxon sees a slightly smaller increase in carbon emissions than it forecast in
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flaring. Nationwide, venting and flaring from federal lands has almost tripled in recent years, from 23.7 billion cubic feet in 2006 to 66.0 billion cubic feet in 2014,” said the two groups in the Jan. 19 letter, noting that the existing federal rules are 35 years old. The BLM recently released a proposed rule aimed at minimizing the amount of venting and flaring that takes place on oil and gas production facilities on federal and Indian lands, and establishing standards for determining avoidable versus unavoidable losses. “We are writing to request that you contact Interior Secretary Sally Jewell and BLM Director Neil Kornze directly and urge them to immediately release a proposed rule that
December 2014 after adjusting for the earlier study's different time period; 2010 to 2040. Technology and climatechange policies are among the reasons. Critics said the Exxon forecast understates pressure to reduce emissions of gases blamed for climate change. According to U.S. science agencies, 2015 was by far the hottest year in 136 years of record-keeping. At Paris, nearly 200 nations vowed to limit global warming below 2 degrees Celsius (3.6 degrees Fahrenheit) compared with pre-industrial levels. Energy researcher Jonathan Koomey of Stanford University said there will be pressure for more aggressive action and that Exxon was making assumptions most favorable to continued use of oil and gas. "I don't think they are saying things that are crazy — the Exxon people are very sharp," Koomey said, "but they are painting a picture of a world in which there is not significant climate action, and that's not the world we're going to live in the next 25 years." James Leaton, head of research for the UK-based Carbon Tracker Initiative, said Exxon overstated energy demand, underestimated an increasing role for renewables and ignored looming changes in energy.
stops the waste of public resources and ensures private landowners and federal taxpayers are getting a fair return,” said the letter that went to Senators Heidi Heitkamp and John Hoeven and Representative Kevin Cramer. The groups pointed to federal data that oil and gas operators on federal lands in North Dakota had lost 173 billion cubic feet of natural gas from 2006 to 2014, and consumed 42.7 billion cubic feet of natural gas, of which some portion was unintentionally released into the atmosphere. No royalties were paid on any of this gas. The letter said BLM should create a methane rule that fulfills its fiduciary responsibility to federal taxpayers and prevents waste of federal resources by requiring oil and gas operators to adopt the use of existing technologies to prevent waste of methane.
THE BOOMING BASIN
February 2016
Legendary coach named keynote speaker for 2016 petroleum conference BISMARCK – Registration opened this week for the 2016 Williston Basin Petroleum Conference. The conference will be held May 24-26 in the Bismarck Civic Center in Bismarck. In addition to technical talks and presentations, the conference will have more than 500 indoor and outdoor booths, making it the largest Bakken expo in Holtz the nation. When the conference was held in Bismarck in 2012 and 2014, booths sold out within minutes of registering. More than 4,250 people from 49 U.S. states, seven Canadian provinces and nine countries registered for the event in 2014. Hamm Legendary Notre Dame coach Lou Holtz will address attendees. Deemed the “master of the turnaround,” Holtz built his career by inspiring his players and enhancing their performance to take them from the bottom to being winners. Today, Holtz motivates others by sharing his leadership experience and lessons learned to help others become the leaders needed to guide their employees and companies to success, even in difficult times. Registration for the conference can be
done at wbpcnd.org. The 24th annual conference will bring together leaders in the petroleum industry to review the latest in innovative technologies for unconventional recovery, learn from technical and regulatory experts, and receive updates on state and federal regulations. More than two dozen industry leaders are confirmed to speak at the event, including several Bakken CEOs, presidents and vice presidents who will discuss Bakken markets and activity, U.S. oil exports, efficiencies in production and operations, and the outlook for global oil supply and demand. Featured speakers include: – Harold Hamm, president and CEO of Continental Resources. – Don Hrap, president of Lower 48, ConocoPhillips. – Jim Volker, chairman, president and CEO of Whiting Petroleum Corp. – Rick Muncrief, president and CEO of WPX Energy. – Gerbert Schoonman, vice president of Onshore Bakken, Hess Corp. The conference alternates between North Dakota and Saskatchewan every other year and is sponsored by the North Dakota Petroleum Council, North Dakota Department of Mineral Resources and Government of Saskatchewan Ministry of the Economy. For more information and to register, visit wbpcnd.org.
State treasurer says N.D. can adapt to new economy Times are changing for North Dakota, but State Treasurer Kelly Schmidt said the state is capable of transitioning to the n e w , s l o w e r economy. “ W e Schmidt have been drinking from a real firehose for some time,” she told the Minot Area Chamber of Commerce’s Government Affairs Committee Friday. “We really can now have an opportunity to step back and re-assess. With North Dakotans, we don’t sit back and whine about how we are going to fix it. We roll up our sleeves and put actions to our words.” However, Schmidt said she is concerned the Legislature may want to touch the state’s Legacy Fund next year. In 2010, voters created the trust fund, designating that 30 percent of the oil and gas production and extraction taxes go into the fund.
Earnings on deposits that now total $3.4 billion can’t be spent until after June 30, 2017. “It still hasn’t been decided if those dollars or how those dollars are going to be used. That will be a huge discussion in the next legislative session,” Schmidt said. She added the state has a number of other funds where oil and gas revenues are distributed and that can be used to meet a variety of state needs. “I truly believe that the Legacy Fund should be the absolute last place that we go to take dollars out,” she said. Her preference would be for the 2017 Legislature to re-direct earnings back into the Legacy Fund to continue the fund’s growth, she said. Schmidt is seeking a fourth term as treasurer, having decided a couple of months ago not to pursue the Republican endorsement for governor. Schmidt said she has increased the professionalism of the office since first elected in 2004, hiring trained accountants
and adding an attorney to the staff to assist with legislative compliance, while holding growth of the office’s operating budget to 1 percent. She said she continues to look for efficiencies even though procedures already are working well. In addition to managing more than 400 accounts, the treasurer has a seat on various state boards. Schmidt also has been involved in promoting a financial literacy initiative. The Legislature directed financial literacy training in the schools, which is supported through a public-private partnership. Schmidt said another of her goals has been to increase the state’s financial transparency. The website of the treasurer’s office provides detail about the state’s revenue distributions, including money sent to counties and townships. The website features a “daily operating balance” box that shows how much is in the state’s primary cash account each day. Thursday’s total was $3.25 billion.
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THE BOOMING BASIN
February 2016
Pipeline permit North Dakota regulators approve Dakota Access Pipeline BISMARCK (AP) — North Dakota regulators on Wednesday approved the biggest-capacity crude pipeline proposed to date that would move nearly 600,000 barrels daily from the oil patch to Illinois. Some things to know about the $3.8 billion, 1,150-mile project that crosses four states:
What happened?
The North Dakota Public Service Commission had been reviewing Dallas-based Energy Transfer Partners’ permit for 13 months. The three-member, allRepublican panel long signaled support, saying the pipeline would reduce truck and oil train traffic, cut natural gas flaring and create more markets for the state’s oil and gas. The commis-
sion voted 2-0 to approve the Missouri River twice in North permit; Commissioner Randy Dakota, near Williston and Christmann abstained because Mandan. his mother-in-law has been negotiating an easement for the Pipelines path project. Energy Transfer Partners says it has easement agreements What now? on 85 percent of the properties Energy Transfer Partners along the pipeline’s path, which hopes to complete the pipeline crosses 50 counties, and will by year’s end. The North use eminent domain if agreeDakota’s portion is the longest ments with landowners can’t be leg (about 360 miles) and the reached voluntarily. Easements most expensive ($1.4 billion). can bring significant money for Regulators in South Dakota landowners: A couple in southand Illinois have already ap- central North Dakota said they proved permits. Iowa still re- signed a 99-year easement mains, though the company worth almost $50,000 to allow a says it expects that approval to half-mile of pipeline on their come next month. The U.S. farm. Army Corps of Engineers also must approve the pipeline because it would cross beneath the See PERMIT — Page 7
Austin Dewitt, front, and Steve Cortina react to a vote by the North Dakota Public Service Commission to greenlight siting approval for the Dakota Access Pipeline on Wednesday morning in Bismarck. Both are members of the Local 563 Laborers Union who were joined by other members for the PSC vote. AP Photo
THE BOOMING BASIN
February 2016
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Pipeline project permits now approved in three states DALLAS – The Dakota Access Pipeline Project continues to finalize its construction plans and secure the necessary land easements in preparation to begin construction of the 1,168mile crude oil pipeline to cross four states. The $3.78 billion project will transport about 450,000 barrels per day, with a capacity as high as 570,000 barrels per day, of domestically produced light sweet crude oil from the Bakken and Three Forks production areas in North Dakota to Patoka, Illinois, where shippers will be able to access multiple markets including Midwest, East Coast and Gulf Coast regions. The North Dakota portion of the pipeline is its longest leg and covers about 360 miles. The permit approved last week by the North Dakota Public Service Commission brings the total to three of the four states crossed by the pipeline authorizing it to move forward. The South Dakota Public Utilities Commission and the Illinois Commerce Commission have also approved Dakota Access’ permit applications. The Iowa Utilities Board continues to review Dakota Access’ application having announced a working session scheduled for early February. Construction of the pipeline is projected to begin in 2016 upon approval of all required ap-
Permit
plications and permits. Dakota Access has signed voluntary easement agreements with landowners representing more than 85 percent of the properties along the four-state route. Currently, 89 percent of the properties in North Dakota, 92 percent in South Dakota, 78 percent in Iowa and 87 percent in Illinois have been signed. Project representatives will continue easement negotiations with landowners during the coming months. During construction, Dakota Access will pay substantial state sales taxes to North Dakota, South Dakota, Iowa, and Illinois. The project also will pay significant property taxes to the four states once the pipeline is in service. Dakota Access will employ up to 4,000 construction workers per state to build the 1,168 miles of 30-inch pipeline. One hundred percent of the workers will be union contractors with up to 50 percent sourced from local union halls. Dakota Access is projected to be in service by late 2016. Dakota Access has opened offices in Bismarck, Sioux Falls, South Dakota, Urbandale, Iowa, and Springfield, Illinois, to manage the ongoing operations and maintenance of the pipeline.
buried at least 4 feet below ground — up to 64 feet at Missouri River crossings. The company says it would have safeguards inContinued from Page 6 cluding leak detection equipment, and that workers who remotely monitor the Safety measures pipeline from Texas could close block The steel pipeline will vary in diameter valves on the pipeline within three minfrom 12 inches to 30 inches and would be utes if a breach is detected.
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Interior Secretary Sally Jewell speaks in Libreville, Gabon, West Africa, Jan. 22. The Obama administration on Jan. 22 proposed new rules to clamp down on oil companies that burn off natural gas on public land, arguing that it will reduce waste and harmful methane emissions as part of President Barack Obamaʼs bid to curb climate change. Jewell said in a statement that natural gas should be used to power the economy, not wasted by being burned into the atmosphere. AP Photo
U.S. seeks to limit methane gas 'flaring' at drilling sites WASHINGTON (AP) — The Obama administration on Friday proposed new rules to clamp down on oil companies that burn off natural gas on public land, arguing the effort will reduce waste and harmful methane emissions as part of President Barack Obama's bid to curb climate change. Energy companies frequently "flare" or burn off vast supplies of natural gas at drilling sites because it does not earn as much money as oil. A report by the Government Accountability Office said 40 percent of the methane gas being burned or vented could be captured economically and sold. Interior Secretary Sally Jewell said in a statement that natural gas should be used to power the economy — not wasted being burned into the atmosphere. Jewell said the new rule will modernize decades-old standards to reflect existing technologies, allowing companies to use captured natural gas to generate power for millions of homes and businesses. Between 2009 and 2014, enough natural gas was lost through venting, flaring and leaks to power more than 5 million homes for a year, she said. The new rule also should generate millions of dollars that can be returned to taxpayers, tribes and states while reducing pollution, Jewell said. The rule, developed by Interior's Bureau of Land Management, would require oil and gas producers to limit the rate of flaring at oil wells on public and tribal lands, periodically inspect their opera-
tions for leaks and replace outdated equipment that vents large quantities of gas into the air. The rule will be open for public comment for at least two months, with a final rule expected by the end of the year. Most of the gas being burned at drilling sites is methane, a powerful greenhouse gas that is 21 times more potent at trapping heat than carbon dioxide, although it does not stay in the air as long. Methane emissions make up about 9 percent of U.S. greenhouse gas emissions, according to government estimates. The oil industry has argued that new regulations are not needed for methane, because the industry already has a financial incentive to capture and sell natural gas. Methane emissions have been reduced by 21 percent since 1990 even as production has boomed, according to the Western Energy Alliance, an industry group. "Another duplicative rule at a time when methane emissions are falling, and on top of an onslaught of other new (federal) regulations, could drive more energy production off federal lands," said Erik Milito, director of upstream and industry operations for the American Petroleum Institute, the top lobbying group for the oil and gas industry. If that happens, the result would be "less federal revenue, fewer jobs, higher costs for consumers and less energy security," Milito said. Environmental groups praised the tougher methane curbs, saying regulations are needed to encourage industry changes
Page 8 Bowman poised for leasing As the Bakken oil boom cools because of plummeting prices, oil companies are starting to sweep up land in Bowman County, an increasing trend that could reshape the area as a hot spot for oil and gas recovery. Why? Because it’s cheaper. The state’s quarterly oil and gas lease auction coming up Feb. 2 is a strong indication that the oil industry is being revived in southwest North Dakota. While some historic wells are still producing, it is anticipated by the state that the area will continue to see increased oil and gas activity. Leases on more than 1,500 acres of land in Bowman County will be up for grabs in next month’s auction. That’s about 500 acres more than what was available at November’s auction. “In Bowman, there are a lot of things going on,” said Drew Combs, director of the Minerals
THE BOOMING BASIN Management Division with the North Dakota Department of Trust Lands. “Everybody’s been hearing for the last years Bakken, Three Forks. North Dakota has more oil plays than just those.” – Bowman County Pioneer
‘Not a crappy man camp’ The Golden Valley City Council has granted a conditional use permit to locate seven, sixbedroom mobile homes at Golden Valley Trailer Court. Gail Van Buren made the request for crew housing in which each bedroom will have its own bathroom. “My buildings are meant to look like homes. They are not a crappy man camp,” said Van Buren, who first developed housing in the area in 1989 for the coal gasification plant. “We’re not people who just came in to take
February 2016
BAKKEN BRIEFS Compiled by Steve Andrist, former publisher of newspapers in Crosby and Tioga.
advantage of the area,” he said. The facility that was pitched to the Golden Valley City Council came in only lightly opposed. “Most of the comments were favorable,” said Golden Valley Mayor Deen Brecht, also estimating eight-to-10 community members in attendance. The development will house up to 42 workers. The facility is not fenced in, has no cafeteria or housekeeping, and no on-site manager. The city council did not ask for a bed tax. – Beulah Beacon
‘Twinning,’ but not four-laning Saskatchewan continues to quietly revise its plan and build Provincial Highway 39 into a four-lane highway to the U.S. border at Portal. But the North Dakota Department of Transportation says it has no plans to study widening the road – U.S. 52 – on the North Dakota side. Nearly two years ago, Saskatchewan Premier Brad Wall announced that plans would go ahead to four lane the highway out of concern for public safety, and after receiving federal government backing. Since then, about 20 miles of the 140-mile stretch of road has been four laned, or “twinned,” as it is known in Saskatchewan. A truck bypass has been built around the city of Estevan and a 10-mile stretch between Estevan and Bienfait has also been completed. Will Chabun believes the remaining 114
miles will be done in the same fashion. He says it will take several years, but the plan is to eventually turn Highway 39 into a freeway. – Kenmare News
Downturn hits water sales Falling revenues are having a ripple effect across the oil patch. Tioga, Ray, and Crosby are likely to take another hit to their budget beginning in March. And residents may see another increase in their water and sewer rates. Tioga Mayor Drake McClelland said the Western Area Water Supply Authority likely will no longer allow cities it serves to sell water for industrial use. “The bottom line? WAWSA is having trouble meeting their notes,” McClelland said, and he expects the WAWSA board will approve the proposal at its next meeting. The move would cost Tioga about $80,000 a month in lost water sales, McClelland said. As a result, the city is freezing promotions, eliminating raises and restricting overtime. The Ray Commission hasn’t met since the news was passed down, so the commission hasn’t discussed what steps to take in response. Crosby Mayor Bert Anderson said reduced industrial water sales will cost the town roughly $20,000, but it has enough saved that water rates will not be raised. – The Tioga Tribune
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THE BOOMING BASIN
February 2016
School nearly finished By ANDREA JOHNSON
Staff Writer ajohnson@minotdailynews.com WATFORD CITY – Students and teachers at Watford City will soon be able to enjoy a brand new school building. “We have our open house on February 15 and the first day of students in the school,” said superintendent Steve Holen. Construction on the $53 million school building started on Oct. 17, 2014. Construction took 16 months. While it was under construction, the rapidly growing school district has had to make due with a facility that is bursting at the seams and has spilled over onto the rest of the property. “We have 10 portables at the elementary school,” said Holen. The district has grown from 540 students five years ago to about 1,330 students this year. Even the slowdown in oil production hasn’t had much of an impact on student numbers. “We lost a little bit and gained some back after Christmas,” said Holen. “We’re still above where we were last year at this time. We’re pretty stable.”
Submitted Photo
The new high school facility in Watford City is pictured last week
Watford City now has more students than Wahpeton and is nearly the size of Devils Lake. Voters approved a bond issue to pay for the new school, but costs ended up being above what was bonded for. Holen said the district had to put together other funding sources to make up the difference, including other building fund bonds. “We needed it probably a year and a half ago,” said Holen. The school will be 163,000 square feet and will have a capacity of just over 800 stu-
dents. “It will house grades seven through twelve initially but it was designed for grades nine through twelve,” said Holen. Once the students are in the new high school, the district will begin moving older elementary students into the old high school building and out of the portable classrooms they are currently in. Holen said the high school is a building with a lot of natural light and plenty of windows. It was constructed to best accommodate a 21st century curriculum.
The school includes a science, technology, mathematics and engineering lab. The library incorporates technology. “When you build a new high school, you want to make sure it’s ready for all the latest advances,” said Holen. Safety and security measures are also taken into account. The building includes keyless entry and security cameras are extensive. The layout of the building was also designed with safety in mind. Holen said everyone is excited to occupy the new school.
Page 9 Building boom continues in region
Building projects are also continuing around the region, even with the economic slowdown. A bond issue vote is scheduled for Feb. 9 in New School District No. 8 in rural Williston. Superintendent Rob Turner said the $38.5 million bond issue would pay for construction of a new K-8 school just north of Williston. The district currently has about 380 students in grades K-8, attending three different schools spread out over an 1,160-square-mile district. Turner calls the current school facilities “very antiquated” and a hodgepodge of temporary modular facilities that donʼt serve the needs of students. None of the schools have a gymnasium. Turner said most of the students in the district live along U.S. Highway 2, close to the location where the new school would be built. The district would try to keep Round Prairie Elementary open, since it is located 18 miles out of Williston and would be too far away to bus the 40 students there into the new school. Any parents who wanted their children to attend the new school would be allowed to do so, said Turner. The other graded elementaries in the rural K-8 district are Garden Valley and Stony Creek Elementaries. Turner said public meetings are being held to educate parents about the plans in the lead-up to the bond issue vote. If it passed, taxes would increase $103.50 per year for the owner of a $100,000 home in the district. A school addition and renovation project in the Underwood School District is expected to get under way, according to a release from Kerry Arndt, marketing manager at Consolidated Construction Co. Construction projects are also ongoing in Minot. A school addition at Perkett Elementary and a new elementary in southeast Minot are both scheduled to be completed by August. A new school in Nedrose will hopefully be completed by later this spring, according to superintendent Charles Miller.
THE BOOMING BASIN
Page 10
February 2016
Oil production in N.D. counties MONTHLY OIL PRODUCTION FOR LOCAL COUNTIES
2,000,000
750
1,800,000
675
1,600,000
600
1,400,000
525
1,200,000
450
1,000,000
375
800,000
300
600,000
225
400,000
150
200,000
0 1977
75
1982
1987
1992
1997 BILLINGS
2002
2007
2012
0
2017
wells
MONTHLY OIL PRODUCTION FOR LOCAL COUNTIES 500,000
750
450,000
675
400,000
600
350,000
525
300,000
450
250,000
375
200,000
300
150,000
225
100,000
150
50,000
0 1977
75
1987
1997 BOTTINEAU
2007
0
2017
wells
MONTHLY OIL PRODUCTION FOR LOCAL COUNTIES 1,800,000
750
1,620,000
675
1,440,000
600
1,260,000
525
1,080,000
450
900,000
375
720,000
300
540,000
225
360,000
150
180,000
0 1977
75
1987
1997 BOWMAN
2007 wells
0
2017
THE BOOMING BASIN
February 2016
Page 11
Oil production in N.D. counties MONTHLY OIL PRODUCTION FOR LOCAL COUNTIES
750,000
1000
675,000
900
600,000
800
525,000
700
450,000
600
375,000
500
300,000
400
225,000
300
150,000
200
75,000
0 1977
100
1987
1997 BURKE
2007
0
2017
wells
MONTHLY OIL PRODUCTION FOR LOCAL COUNTIES 3,000,000
3000
2,700,000
2700
2,400,000
2400
2,100,000
2100
1,800,000
1800
1,500,000
1500
1,200,000
1200
900,000
900
600,000
600
300,000
0 1977
300
1987
1997 DIVIDE
2007
0
2017
wells
MONTHLY OIL PRODUCTION FOR LOCAL COUNTIES 10,000,000
6000
9,000,000
5400
8,000,000
4800
7,000,000
4200
6,000,000
3600
5,000,000
3000
4,000,000
2400
3,000,000
1800
2,000,000
1200
1,000,000
0 1977
600
1987
1997 DUNN
2007 wells
0
2017
THE BOOMING BASIN
Page 12
February 2016
Oil production in N.D. counties MONTHLY OIL PRODUCTION FOR LOCAL COUNTIES
900,000
300
810,000
270
720,000
240
630,000
210
540,000
180
450,000
150
360,000
120
270,000
90
180,000
60
90,000
0 1977
30
1987
1997
GOLDEN VALLEY
2007
wells
0
2017
MONTHLY OIL PRODUCTION FOR LOCAL COUNTIES 5,000
200
4,500
180
4,000
160
3,500
140
3,000
120
2,500
100
2,000
80
1,500
60
1,000
40
500
20
0 1977
1987
1997 McHENRY
2007
0
2017
wells
MONTHLY OIL PRODUCTION FOR LOCAL COUNTIES 25,000,000
10000
22,500,000
9000
20,000,000
8000
17,500,000
7000
15,000,000
6000
12,500,000
5000
10,000,000
4000
7,500,000
3000
5,000,000
2000
2,500,000
0 1977
1000
1987
1997 McKENZIE
2007 wells
0
2017
THE BOOMING BASIN
February 2016
Page 13
Oil production in N.D. counties MONTHLY OIL PRODUCTION FOR LOCAL COUNTIES
250,000
250
225,000
225
200,000
200
175,000
175
150,000
150
125,000
125
100,000
100
75,000
75
50,000
50
25,000
0 1977
25
1987
1997
2007
McLEAN
0
2017
wells
MONTHLY OIL PRODUCTION FOR LOCAL COUNTIES 5,000
30
4,000
24
3,000
18
2,000
12
1,000
6
0 1977
1987
1997 Mercer
2007
0
2017
wells
MONTHLY OIL PRODUCTION FOR LOCAL COUNTIES 12,000,000
5000
10,800,000
4500
9,600,000
4000
8,400,000
3500
7,200,000
3000
6,000,000
2500
4,800,000
2000
3,600,000
1500
2,400,000
1000
1,200,000
0 1977
500
1987
1997 MOUNTRAIL
2007 wells
0
2017
THE BOOMING BASIN
Page 14
February 2016
Oil production in N.D. counties MONTHLY OIL PRODUCTION FOR LOCAL COUNTIES
200,000
500
180,000
450
160,000
400
140,000
350
120,000
300
100,000
250
80,000
200
60,000
150
40,000
100
20,000
0 1977
50
1987
1997 RENVILLE
2007
0
2017
wells
MONTHLY OIL PRODUCTION FOR LOCAL COUNTIES 100,000
50
80,000
40
90,000
45
70,000
35
50,000
25
60,000
30
40,000
20 15
30,000
10
20,000
5
10,000
0 1977
0
1987
1997 SLOPE
2007
-5
2017
wells
MONTHLY OIL PRODUCTION FOR LOCAL COUNTIES 1,000,000
1500
900,000
1350
800,000
1200
700,000
1050
600,000
900
500,000
750
400,000
600
300,000
450
200,000
300
100,000
0 1977
150
1987
1997 STARK
2007 wells
0
2017
THE BOOMING BASIN
February 2016
Page 15
Oil production in N.D. counties MONTHLY OIL PRODUCTION FOR LOCAL COUNTIES
15,000
70
13,500
63
12,000
56
10,500
49
9,000
42
7,500
35
6,000
28
4,500
21
3,000
14
1,500
7
0 1977
1987
1997 WARD
0
2007
2017
wells
MONTHLY OIL PRODUCTION FOR LOCAL COUNTIES 9,000,000
5000
8,100,000
4500
7,200,000
4000
6,300,000
3500
5,400,000
3000
4,500,000
2500
3,600,000
2000
2,700,000
1500
1,800,000
1000
900,000
500
0 1977
1987
1997
0
2007
WILLIAMS
2017
wells
$195 $180 $165 $150 $135 $120 $105 $90 $75 $60 $45 $30 $15 $0
$/BO
2020
2015
2010
2005
ND Sweet $/BO
BOPD
2000
1995
1990
1985
1980
1975
1,300,000 1,200,000 1,100,000 1,000,000 900,000 800,000 700,000 600,000 500,000 400,000 300,000 200,000 100,000 0
1970
BOPD
North Dakota Daily Oil Produced and Price
Page 16
THE BOOMING BASIN
February 2016