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North Dakota Association of Oil and Gas Producing Counties
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Stay Connected
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Basin Bits Magazine
This semiannual magazine, published in the spring and fall, is the official publication of the ND Association of Oil and Gas Producing Counties.
To sign up to receive a copy of the magazine, please click here.
To read the latest Basin Bits edition via PDF, click this link.
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Uniform County Truck Permit System
This is a county road permit system for over-weight or over-width vehicles on county roads. Since 1986, the NDAOGPC has operated the Uniform County Truck Permit program as a service to counties and the petroleum industry.
For more information or to get permits, click here.
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 Thank you for your continued interest in the activity of the ND Association of Oil and Gas Producing Counties.
We offer insight on the energy issues of the state and their effects on the communities in western North Dakota.
We hope that you will find this week's News From the NDAOGPC as a valuable source of information.
Have a great weekend!
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Interim Committee Hears About Salt Contamination, Hazardous Material Disposal, and Right of Way Issues
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This image, provided by Rep. Marvin Nelson in his presentation to the committee, shows a good example of land impacted by saltwater contamination. This otherwise prime farm land amounts to 20 acres that is now uneconomical to farm.
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Saltwater spills and associated damages were outlined extensively by western ND land owners and renters at an interim Energy Development and Transmission Committee meeting held Tuesday in Minot, ND. The committee spent over two hours listening to concerns shared by farmers, ranchers, and landowners in areas in Bottineau, Mountrail, and McKenzie counties. When a saltwater brine spill occurs, said Keene, ND farmer and rancher Donald Nelson, it is nearly impossible to reclaim the land because the saltwater soaks into the subsoil. In the event of water saturation, such as occurs after heavy rainfall, the leached salts rise from the subsoil to the surface and cause a continuing problem. Todd Streich, a Bottineau County farmer and County Commissioner, said this is a major issue for crop and livestock producers because, even with remediation, it is hard to get things to grow in areas exposed to saltwater. Streich said that damages can amount to between $300 and $550 per acre in lost return on investment for farmers.
Most of those providing comments on saltwater spill issues were not advocating more regulation and recognized the benefits of continued oil and gas developments. However, each pointed out ways in which existing regulations could be more adequately enforced to protect the land and landowners. Flow meters on saltwater disposal pipelines to monitor pipeline transmissions for leaks were suggested as a way to reduce the amount of saltwater leaked should there be one. Pipeline leaks and the perception that the damages they cause are not always addressed appropriately were also identified in stressing landowners' willingness to grant pipeline easements.
Paul Lohn, Pipeline Controls, LP, shared more information on ways to better monitor pipelines transmitting oilfield fluids like wastewater, natural gas, and oil. He said that maintaining a "pressure profile" by metering both the inputs and outputs on pipelines allows for those monitoring to better determine when the transmitted substance is missing. He added that one downside to this technique is that there is a lag time between fluids going into the pipeline and coming out. Other pipeline monitoring techniques his company uses are a noise profile and a temperature variant detector. The noise profile can be used to indicate if something like a backhoe hits a pipeline. Temperature differences in the soil surrounding pipelines, caused by escaping liquids, can also be used to pinpoint leak locations.
ND Petroleum Council President Ron Ness also spoke to the committee on Tuesday. The ND Petroleum Council has initiated a Right of Way Task Force to come up with potential solutions to an issue that's become a barrier to reducing natural gas flaring. Natural gas pipelines have to be established in order for natural gas to get to appropriate processing plants, and landowners have generally become "fatigued" with the amount of easements they are requested to approve. Ness said his task force has identified that good communication between landmen, landowners, and pipeline companies is a major key to reestablishing the trust between them. He added that proper construction and monitoring of pipelines is critical, noting that a pipeline leak hotline initiated by the ND Industrial Commission is a step in the right direction.
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Ron Ness, ND Petroleum Council President, displays an unused filter sock to members of the Energy Development and Transmission Committee.
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Ness also spoke about the need to find a "North Dakota solution" for disposal of filter sock waste. Filter socks, which contain Naturally Occurring Radioactive Material (NORM), must currently be disposed of in Montana and other states. According to the ND Department of Health, " Material or equipment found to be contaminated to levels above 5 picocuries per gram are considered NORM and must be handled, stored, transported and disposed of in accordance with the North Dakota Radiological Health Rules." Ness said that it could be made easier to dispose of filter socks by better identifying which filter socksexceed the 5 picocurie level. Since not all filter socks exceed that level, costs to the oil industry could be reduced through a resulting reduction in waste amounts. The ND Petroleum Council has recently backed new rules established by the ND Industrial Commission on filter sock disposal. Click here to read the Associated Press report. Amy Dalrymple, Forum News Service, also has a report on the issue. For more information on NORM in general, visit the ND Dept. of Health's Radiation Control Program website.
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KLJ Oil and Gas Impact Study Update
 Also providing information to the committee was Niles Hushka, CEO of KLJ, who gave an update on his company's progress on its study of the oil and gas industry and impacts on the state for the next five years. The study's recently completed Phase 2 focused on taking information compiled in Phase 1 and identifying specific data points and considerations that will be utilized for further analysis. The information presented by Hushka was a set of basic assumptions that will be shared and validated with key stakeholders like industry members and state and local government contacts.
One of the key assumptions made by KLJ is an industry move to batch drilling and batch completion. Under the batch system, multiple wells are drilled on a well pad consecutively. Fracking and completing those wells is expected to take place in the same manner. The batch system is expected to concentrate truck traffic to and from specific well pads over an approximate 30-day period of time, which may cause temporary strain on local roads.
Hushka and KLJ also make the assumption that oil and gas development will enter into a cyclical pattern over the year, due largely to the batch drilling and completion process and North Dakota's cold winters. Other shale oil plays like the Permian and Eagle Ford are expected to attract oil developers away from ND's Bakken and Three Forks formations during the winter months, mostly because cold weather makes oil development more expensive.
In terms of infrastructure in the west, truck traffic is expected by KLJ to stabilize and slowly decrease as well completions take place. Hushka reiterated the fact that right of way acquisitions are key to getting pipelines in the ground and reducing the need for truck traffic. He said that the pace in acquiring rights of way is the issue, specifically for oil, natural gas, waste water, fresh water, and utility lines. Not getting rights of way for those lines, he said, has the potential to slow down oil and gas development on every level.
To read KLJ's complete list of baseline assumptions as well as a list of qualified variables tracked for data points, please click here. More information on the report released by KLJ is also available in a story by Forum News Service's Amy Dalrymple.
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Committee Discussion and Directives
Wrapping up the meeting was discussion on what the committee would like to see in future meetings.
Rep. Todd Porter requested a bill draft that would create a fund dedicated to financing the four-laning of U.S. Highway 85 in western ND. He suggested up to $75 million be portioned from the first 1% of oil and gas Gross Production Tax (GPT) for this purpose, much as the Outdoor Heritage Fund builds revenue for conservation projects.
Porter also requested a bill draft to raise the amount of GPT allocated to the Abandoned Oil and Gas Well Plugging and Site Reclamation Fund (Abandoned Well fund). Expenditures from the fund may currently be made to plug abandoned wells; reclaim abandoned drilling and production sites, saltwater disposal pits, drilling fluid pits and access roads; pay mineral owners royalties for confiscated oil; and reclaim oil and gas pipelines and associated facilities. Currently the fund receives $5 million per fiscal year from GPT allocations, with a fund maximum of $75 million. Porter would like to see the yearly allocation raised to $10 million and the maximum amount allowed in the fund raised to $150 million.
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Webinars Share Updated Population Growth Estimates for Western ND
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Three western North Dakota webinars released new growth projections that topped last year's.
Hosted by Deb Nelson, DLN Consulting, through the Western North Dakota Project initiative, researcher Dick Gardner explained the charts and changes this week. The webinars show the oil "boom" is actually an industry where the population expected will be greater than originally projected. It will also last longer, tapering off 2022-2030, but creating long term jobs.
While the U.S. EIA estimates the Bakken field could produce 1.02 million barrels per day (bpd) by 2020 in North Dakota, McKenzie consultants estimate 1.7 million bpd and Continental Resources has predicted 2 million bpd by 2020. ND is likely to hit 1 million barrels a day this spring.
Western ND is "still in rapid ascent," Gardner said.The new projections show the intensity will last longer and more total employees are needed beyond the 2012 estimates.The large multi-well pads may only drill 3-4 wells, wait three years for the expected production decline, and then they will come back to drill another 3-4 wells until a total of 19 wells are completed on the pad in the sweet spots of McKenzie County. In fringe areas, a total of seven wells might be the final pad count. 74,000 total oil wells are expected with some wells producing for 45 years.
City and county growth rates greater than 4% can be uncomfortable, Gardner said. Below are the anticipated average annual rates of increases for population and housing through 2020:
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Dickinson Region
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Williston Region
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Minot Region
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Permanent Housing
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7.0%
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11.5%
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2.6%
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Permanent Population
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6.4%
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11.2%
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2.4%
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It will take 30,000 miles of pipe to serve the Bakken and a predicted 14 years to get it all in place because of the state's shorter construction season. Average daily rig count will range from 175-190 over the coming 25 years, Gardner said. Oil bids up the price of labor in western North Dakota, Gardner said, so it will crowd out some businesses, especially in Williston where the direct oil employment reaches 63%.
For attendance, 46 people registered for the Dickinson hub webinar, 55 for Williston, and 20 for Minot. The one-hour webinars are recorded and are available at no cost to viewers on-line on the Vision West ND website at www.visionwestnd.com/webinars.php or www.ndwebinars.com. These webinars are part of the Western ND Energy Project, which is sponsored by the Strom Center and funded by the Bush Foundation and Vision West ND.
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ND State Treasurer Shares Information on State Legacy Fund
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 North Dakota's hydraulic fracturing-funded Legacy Fund is nearing $2 billion, the state treasurer said.
Kelly Schmidt was addressing a Columbus, Ohio, meeting of the State Financial Officers Foundation with a total of eight state treasurers in attendance.
Thirty percent of fracking extraction and processing tax revenue goes to North Dakota's Legacy Fund, while the other 70 percent is spread across the state government.
Ohio Treasurer Josh Mandel said he wanted to know how other states are handling their fracking windfalls as Ohio considers a proposal by Gov. John Kasich (R) to raise the severance tax to 2.75 percent, far less than North Dakota's 6.5 percent extraction tax and 5 percent tariff on processing.
Ohio House Republicans have countered Kasich's proposal with a 2.25 percent rate; the issue is currently under debate as part of the state's budget process.
Fracking is the process of pumping huge volumes of high-pressure water, sand and chemicals into shale rock formations to release the oil and natural gas trapped there. Embracing the process has created an energy boom in North Dakota, leading to sweeping growth across the state's economy.
For more information
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Rail Issues Discussed at DUG Conference in Denver
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Tom William, BNSF railroad Industrial Sales,recently spoke in Denver at the DUG conference about the future of rail and the Bakken oil play in the Williston Basin.
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Tom Williams, BNSF, showed a drawing of the steel crude oil hauling tank car under production as he was speaking in Denver to industry last week.
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Williams said over a million barrels a day moves out by rail in North Dakota. The railroad takes Bakken to possible ports on the west and east coast. Most of the crude moves to the east coast at this time. Ports or delivery points of the Bakken: five on the Pacific, five on the West Coast, six on the East coast, ten on the mid-coast and nineteen on the Gulf coast. Even with the penalty on the pipelines and the additional cost of rail, producers are moving crude to coast markets at more profit than utilizing pipes traveling to Cushing, Oklahoma.
BNSF will be spending $500 million of the $5 Billion investment budget on the northern tier this year. The northern tier includes Washington state, Montana and North Dakota. "We are committed for the long term, "Williams told the group. Even without a federal mandate or federal direction, BNSF has a new tank car design that they have put into production to haul crude oil. Williams said the ends of the tank will have 9/16th steel on the tank ends with other safety features. BNSF considers safety to be paramount so they also train local first responders in the event of an accident.
Besides taking oil away from North Dakota, BNSF saw pipes and frac sand coming in by rail. "Frac sand by rail is the mode of choice," Williams said. There may be a lag but rail capacity is scalable, Williams said, as the railroad looks at siding extensions. Referring to demand of sand and proppant, he said "Unit train growth could be significant of inbound in the future," Williams said.
On February 14, 2014, BNSF marked a milestone of the 5,000th unit Bakken train. EOG went "live" or moved the first Bakken unit train on December 31, 2009 at 11:45 PM.
Bakken oil producers are looking for "optionality", meaning they want to choose between rail and pipe delivery to determine best profit. Rail expects to be delivering oil beyond 2020.The midstream producers said they need 18 months to 2 years to get the delivery in place, but so far the Bakken's pace has been a challenge to their industry.
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N.D. Sen. Hoeven gets tough on rail safety
- Daniel J. Graeber, UPI
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 The Department of Transportation needs new standards for rail cars carrying crude oil, and more action to prevent derailments, North Dakota's Sen. Hoeven said. Hoeven said there's a growing need for the Department of Transportation and National Transportation Safety Board to impose new standards for railcars, increase inspections and work to prevent derailments in general. "A comprehensive approach means everyone has a role -- the railroads, the regulators and the shippers, and we have to address preventing, mitigating and responding to accidents," he said in a statement Wednesday. |
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ND Pipeline Authority April Publication Now Available
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 The ND Pipeline Authority's March 2014 issue of the Pipeline Publication has also been released. You can view the issue here.
Please visit www.northdakotapipelines.com for monthly updates, maps, presentations, reports, data, and more.
To receive this quarterly publication directly by email, you can sign up here
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Bakken future is bright
- Jerry Burnes, Williston Herald
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Efficiency is up, drilling costs are down, and it all points to good news for the Bakken.
A recent Wood Mackenzie report said per well cost for Bakken wells will continue to decrease to an average of $7 to 8 million. In 2011, it cost nearly $10 million per well.
Supporting WoodMac's projections is the 2013 report by Continental Resources, the Bakken's largest leaseholder with more than 1.2 million acres, which said its costs per well had dipped into the $8 million range.
The cost drop, said WoodMac, an energy research and consulting firm based in Edinburgh, United Kingdom, could reduce the Bakken's break-even price on a barrel of oil to $58 from the traditional $70.
Ron Ness, president of the North Dakota Petroleum Council, said the break-even price still depends on how much oil is being pumped from the well, but overall there's reason to be positive about the rates.
"Lower break-even prices, that's good for everyone because that means there's stability," Ness said.
Click here to read more.
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NDAOGPC Accepting Applications for 2014 Scholarship Awards
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ATTENTION ND STUDENTS!!
T he NDAOGPC is again sponsoring a scholarship program for students in North Dakota focusing on energy-related degrees. Students who have completed 12 credit hours or more are welcome to apply for one of six scholarships that will be awarded in August 2014. Applicants should be pursuing degrees in engineering, chemistry, geology, petroleum sciences or other studies directly related to the oil and gas industry. Invitations to apply for the Association's 2014 scholarships were recently sent to all North Dakota colleges, universities, and vocational schools. We strongly encourage all readers to share this opportunity with anyone they believe may qualify. The application can be downloaded HERE.
Last year, the Association awarded a total of $10,000 to six deserving students. Don't miss this great opportunity to gain financial assistance for an industry related education! The deadline for application submission is June 15, 2014.
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Upcoming Events
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April 16, 2014
Financing, Developing & Constructing Public Infrastructure in the Bakken
You have a desired project in mind . . . perhaps a much needed new school, a hospital, a wastewater treatment facility, civic center or affordable housing. How do you get from this "idea" to a finished building? Where do you get financing? Are there innovative financing strategies to consider? What is involved in the construction process? How will you manage the procurement process and the construction process? How will you deal with claims?
All of these questions and more will be addressed by experts in these areas in a full day program focusing on transforming your "idea" into a finished facility.
This conference, designed for city and county staff, engineers, elected officials, economic development professionals, construction industry professionals, and other executives involved with project development and financing in North Dakota, will take place on Wednesday, April 16 at the Ramkota Hotel in Bismarck. The event will begin at 8:00am CDT and end by 3:00pm. Click here to view an agenda of the event.
Registration to the conference is complimentary, but required before Wednesday, April 9, 2014. Click here to register.
April 22-23, 2014
The MHA Nation's Annual Bakken Oil & Gas Expo will be held April 22 through 23 at the 4 Bears Event Center in New Town, ND. The Expo will feature a list of speakers including MHA Nation Chairman Tex Hall, U.S. Congressman Kevin Cramer, U.S. Senator Heidi Heitkamp, and ND State DOT Director Grant Levi. Major topics in the agenda, available here, include TERO, environmental protection, transportation, right of way, tribal flaring, and MHA Nation 'Peoples Fund' issues. More information on the Expo is available at www.mhabakkenexpo.com/.
April 24, 2014
The Vision West ND Consortium will hold its next meeting on April 24, 2014. The meeting will begin at 9:00 AM CDT and will be held at the Mountrail County Fair Building just south of Stanley. Two important things will happen at this meeting:
- The Regional Plan will be released. This is the Consortium's chance to see the final draft.
- Training on the Regional Plan will take place. It is imperative that all associated with Vision West ND be trained, as they will be mentioned in their local media and will be given the opportunity to speak about or be quoted on the plan. Training on how to answer questions from the media will also take place.
Vision West ND Consortium members are encouraged to let Deb Nelson know whether they will be at the meeting. She can be reached via email at deb@dlnconsulting.com or by phone at (701) 483-2801.
May 20-22, 2014
The 2014 Williston Basin Petroleum Conference will be held May 20-22, 2014 in Bismarck, ND. Booth space is sold out, but limited sponsorships are still available. The full agenda can be found here.
Registration costs will increase on April 16, so we encourage you to take advantage of the early-bird discount and register now. You can do so here.
Limited hotel rooms remain in Bismarck, so please book your hotels as soon as possible. Hotel reservations can be made immediately here.
For more information regarding the conference, please visit www.wbpcnd.org or contact event coordinators at 701.223.6380 and ndpc@ndoil.org.
September 18, 2014
Be sure to mark your calendars for the 2014 Annual Meeting of the ND Association of Oil and Gas Producing Counties to be held Thursday, September 18, 2014 at the Grand Williston Hotel in Williston, ND. Information on hotel room blocks, the registration process, and sponsorship opportunities will be shared as we get closer to the event.
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Please take your time to review all materials and links provided for your convenience. We at the ND Association of Oil and Gas Producing Counties will continue to provide you up-to-date information on upcoming events and news happening in North Dakota's oil and gas producing counties! Sincerely, Vicky Steiner
Executive Director
Brady Pelton
Deputy Executive Director
ND Association of Oil & Gas Producing Counties |
400 East Broadway Avenue Suite 304 Bismarck, ND 58501
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