Progress 2017: Energy & Industry

Minot Daily News SATURDAY, APRIL 8, 2017 MinotDailyNews.com • Facebook • Twitter

Energy & Industry North Dakota lignite

AND NOW THEN ...

Submitted Photo

Many of North Dakota’s early coal mines were small operations that tunneled underground, using small carts on rails to remove the coal.

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Photos by Kim Fundingsland/MDN

MAIN: The massive dragline that removes earth above veins of lignite coal at the Falkirk Mine near Underwood operates 24 hours a day, seven days a week. It began operation in 1980.

ABOVE: The monstrous bucket of dragline “Chief Ironsides” at the Falkirk Mine has a capacity of 125 square yards, nearly equivalent to the space occupied by a single car garage.

By KIM FUNDINGSLAND • Staff Writer • kfundingsland@minotdailynews.com

UNDERWOOD – Coal and coal mining has been an important part of North Dakota history since the time of the first settlers arriving in the region. One of the earliest known efforts to lay claim to a lignite coal vein occurred in Dakota Territory in 1873, scarcely a year after the town of Edwinton, later named Bismarck, began to take shape on the east bank of the Missouri River.

Bartender and speculator Dennis Hannifin, determined to find his fortune on the plains, ventured across the Missouri into Sioux Indian country in search of a rumored, vast vein of coal. Near present day Almont, Hannifin found what he was looking for, staked a claim and constructed Fort Hannifin. Although he boasted in Bismarck about the impressive fort bearing his name, it apparently was little more than a fortified cave.

At the time Hannifin was seeking to strike it rich off the land, or from what was just beneath it, there was a limited market for coal.

However, Hannifin was among those who believed there would soon be a huge demand for coal on the frontier, for everything from heating homes and buildings to fueling steamboats and railroad engines. History would prove him right, but Hannifin never became the coal baron of which he dreamed.

Hannifin, labeled by many as “eccentric” Denny, was known as a gambler and storyteller, very good attributes for a barkeeper in a lawless frontier town. It also put him face to face with angry soldiers from nearby Fort Abraham Lincoln who were looking to settle a score with Hannifin’s bar buddy, Dave Mullin.

When a shooting fracus erupted in Bismarck, Hannifin was struck in the head by a soldier’s bullet. The wound was not fatal but Hannifin

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left Bismarck shortly afterward, presumably abandoning his coal dreams in favor of survival.

In time, Hannifin recovered from his head wound and returned to Bismarck. His long abandoned and undeveloped coal mine was eventually purchased by the Northern Pacific Coal Company in 1882. It was during that era See COAL — Page 2

Home designs cater to easy living

By JILL SCHRAMM • Senior Staff Writer • jschramm@minotdailynews.com

Jill Schramm/MDN

Erika Kelly, interior designer with Souris River Designs, visits with a visitor to the Home and Garden Show in Minot March 4. Builders and home companies were at the show to show what’s available for 2017.

Homeowners crave “living spaces,” and homebuilders are catering to their wishes with home designs that are lifestyle-friendly.

Minot builders, remodelers and designers agree that clients are wanting homes that are livable, organized and efficient.

People are looking for open concepts and designs that maximize space, said Matt Geinert, vice president of Future Builders. People want to entertain at home, so large, open living space help provide that environment, he said.

“Homes are bigger than they were. I think it’s because people get a lot of comfort from their sense of home,” he said.

Decks – a great place to entertain – are bigger, and more homes are featuring big televisions and surround sound with surround couches. Basement home theaters with the big, sectional couches are the new trend, Geinert said. It’s common to have a refrigera-

tor and a play zone for the kids nearby.

“It’s a space where families can be together,” he said.

Garages also have become bigger, and they are not just for vehicles anymore.

“We almost don’t build any homes anymore with two-stall garages. It’s all three or four,” Geinert said.

Garages now are for entertaining and for storage.

Karla Herigstad, designer with Organized Spaces in Minot, said the garage can be the biggest “room” in the house so it needs to be utilized. People are putting islands in their garages for entertaining, and streamlined organizational storage can keep a garage tidy so owners aren’t embarrassed to have their garage doors open, she said.

See HOME — Page 3

CONSTRUCTION BOOSTS MINOT’S HOUSING INVENTORY

By JILL SCHRAMM

family apartments than it was six years ago.

A housing study released by the City of Minot in March found the Minot’s housing stock has more number of housing units increased inventory and is weighted some- by 29 percent, from 15,854 to what more heavily toward multi- 20,394, from 2010 through June Senior Staff Writer jschramm@minotdailynews.com

2016. There were 1,316 new singlefamily homes constructed. The number of multi-family units increased by 77 percent or 3,234 units, and there were 617 new manufactured homes added.

In 2010, 69 percent of Minot’s

housing stock was single-family housing, 24 percent was multi-family and 7 percent was manufactured housing. Today, 59 percent of the housing stock is single-family housing, 33 percent multi-family and 8 percent manufactured housing, the

study found.

Today, there are 13,019 singlefamily homes and 7,375 multi-family apartments in Minot. Based on population projections showing a 21 percent increase to 62,778 resiSee BOOST — Page 3

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Saturday, April 8, 2017

Economic output from oil & gas in ND remains strong despite downturn BISMARCK – The petroleum industry’s economic contributions remained strong in 2015 despite struggling commodity prices, according to the preliminary findings of a study being conducted by the North Dakota State University’s Department of Agribusiness and Applied Economics.

The study was presented March 7 during Energy Day at the Capitol in Bismarck, an event sponsored by Bakken Backers, National Federation of Independent Business, Consumer Energy Alliance, ONEOK and the North Dakota Petroleum Council.

The oil and gas industry contributed $34.25 billion into North Dakota’s economy in 2015. The figure is the second highest contribution since 2005 when the first study was released and was even higher than in 2011 when oil averaged above $87 per barrel.

“This study helps confirm that the petroleum industry remains one of the largest basic-sector industries in North Dakota in both good years and bad,” said Dean Bangsund, co-author of the study and research scientist for the department at NDSU. “Although the retraction in the markets caused undue hardships on the industry throughout 2015 and on into 2016, the benefits to individuals, the state and local governments, retailers and all other economic sectors continued to be strong, which has since reinforced the industry as a mainstay in North Dakota’s economy.

This is especially true as oil production, versus oil field development, is increasing in relative economic importance.”

Because the industry relies on hundreds of contractors and subcontractors, the economic contributions

Submitted Photo

From the left, Jessie Veeder, singer and writer from Watford City; Trey Wilson, chairman, CEO and president of MBI Energy Services; and Scott Hennen, host of the “What’s On your Mind?” radio show are shown at Energy Day held in Bismarck, March 7 . Energy leaders including Oneok, National Federal of Independent Business, Bakken Backers, Consumer Energy Alliance and North Dakota Petroleum Council were sponsors.

KEY POINTS

– Global demand for oil grew solidly in 2015 and 2016.

– Global Exploration and Production Capital spending is up 7 percent.

– In the U.S., unconventional, light tight oil plays will account for much of future growth with the Bakken and Niobrara being the significant plays. (The Niobrara shale formation is situated in northeastern Colorado and parts of adjacent Wyoming, Nebraska, and Kansas. Primarily an oil play, it is in the Denver-Julesburg Basin, which has long been a major oil and gas province.)

– There continues to be risk for volatility based on a number of factors including decelerating global economy and anti-trade policies, a strong U.S. dollar typically weakens demand response outside of the U.S. and removal of subsidies in many developing countries hurts demand when oil prices recover.

– Source: Helen Currie, senior economist at Conoco Phillips and presenter at Energy Day at State Capitol, March 7.

extend beyond the mining and extraction industries.

According to the study, retail trade once again saw the largest impact, taking in $8.85 billion of the $34.25 billion. Households, or personal income, saw the second-largest impact at $7.54

billion, and state and local governments rounded out the top three with $4.1 billion in royalties, taxes and other revenues from the oil and gas industry. More than six other industries in North Dakota also benefited from oil and gas development.

“The industry has proven itself to be resilient in the face of downturns in the market,” said Ron Ness, president of the North Dakota Petroleum Council. “Through continued innovation and development, the industry is able to do more with less and have

Coal Continued from Page 1

that coal began to play a much larger role in the economic development of North Dakota.

Today coal plays a huge role in North Dakota with coal mines supplying fuel to power plants that generate electricity used over a broad region of the United States. North Dakota’s major coal-fired electrical generating plants are the Milton R. Young Station near Center, Great River Energy’s Coal Creek plant at Underwood, the Basin Electric Co-op Antelope Valley plant near Beulah and the Otter Tail Power Company Coyote plant near Beulah.

The development of the coal-fired generating plants followed nearly 30 years of a downturn in the demand for coal. In the 1950s coal had been almost completely replaced for home heating as customers turned to fuel oil and natural gas. The future for coal really heated up when it was discovered lignite was a near perfect fuel for electrical generation. The massive power plants we see on the North Dakota landscape today were erected in close proximity to mines situated on vast coal reserves.

Huge draglines are just some of the rapid improvements made in the process of mining coal to be delivered to the nearby power plants. Early shovels had a capacity to move about a half yard of earth.

Today’s massive draglines have up to a 140-yard capacity. Giant trucks used to haul coal from mining locations can carry up to 300 tons.

Kim Fundingsland/MDN

A large payloader with a full bucket of lignite coal waits for the arrival of a 200-ton truck that will transport the coal to a crusher in preparation for delivery to the nearby Coal Creek Power Plant.

“When the Panama Canal was completed those shovels were dismantled and shipped back to the United States,” said Dean Moos, director of reclamation for the North Dakota Public Service Commission.

“That’s how the surface mining got started. Most of those old shovels have been sold for scrap metal now. I think there is still one sitting up by Columbus.”

One of the last new draglines was purchased for the Center mine several years ago.

At the time it was believed to be the only new dragline built in 20 or more years. The mine began receiving the dragline in pieces to assemble in 2003-04.

It took nearly four years to assemble the gargantuan ma-

chine. The price of steel increased so much during the time it took to build the dragline that the purchase price increased by a whopping $10 million.

Today though, may be a buyer’s market for big draglines. Many small coal mines have closed in the past 25 years, leaving an abundance of equipment on the market.

“There’s a lot of used draglines for sale,” remarked Moos.

The large draglines used at the Falkirk Mine today cost about $40 million in the late 1970s. The cost of similar-sized new draglines today is estimated to be in the $150 million range.

Today’s coal mining opera-

tions have come a long, long ways from the mom and pop mines that once dotted western and central North Dakota.

Large mines in the state today are the Total Freedom Mine north of Beulah, the Falkirk Mine on U.S. Highway 83 near Underwood, the BNI Center Mine at Center, Dakota Westmorland, formerly Knife River Coal, near Beulah and the Coyote Creek Mine southwest of Beulah.

“In addition to the five active larger mines, there’s two small mines. They are leonardite mines, a form of lignite,” explained Moos. “You couldn’t burn it if you tried. It’s used for drilling mud in the oil industry and a few other things.

Those mines are located near Williston and Scranton, much smaller in size.”

One of the largest coal mining operations in the state is the Falkirk Mine near Underwood.

The facility is owned and operated by the North American Coal Corporation. It covers 30,000 acres and produces more than 7 million tons a coal a year which supplies the nearby Coal Creek generating station and the Spiritwood station near Jamestown.

“We have a mine plan that goes to 2030 for our contract,” said Doug Stoltz, Falkirk Mine manager. “We have a workforce of 476 people out here.”

Stoltz said that an increase in people and even larger equipment than what Falkirk currently uses, lignite mining at the site could continue until 2060 or 2070. That’s not to say North Dakota’s coal reserves would be depleted. Far from it.

Estimates are that there is up to a 400 year supply of lignite coal yet to be mined in western North Dakota.

To reach veins of lignite the soil over the top of the vein first must be removed. Top soil and sub-soil is carefully stripped

proven that they can weather these downturns and come out even stronger.”

Among the study’s key findings: – The oil and gas industry generated $34.25 billion for North Dakota’s economy: In 2015, direct impacts of the oil and gas industry were $14.38 billion and secondary impacts were $19.87 billion for a total of $34.25 billion in business activity.

– The oil and gas industry created more than 72,350 jobs statewide: The study reveals that the oil and gas industry’s economic importance to the state includes direct employment of more than 48,300 full-time jobs and secondary employment of more than 23,980 full-time equivalent jobs. The total direct and indirect jobs supported accounted for 20 percent of all private employment in the state.

– The industry contributed $7.54 billion in personal income: The study reveals that the oil and gas industry’s share of the state’s total private salaries and wages is nearly 30 percent and accounts for a quarter of all private and public salaries and wages.

The North Dakota Petroleum Council has commissioned the study each biennium since 2005. The study was conducted by research scientist Dean Bangsund and Nancy Hodur, director for the Center for Social Research at NDSU. Bangsund and Hodur surveyed firms engaged in exploration and development, extraction and production, transportation, and processing of crude oil and natural gas. Data that was measured in this study but not included in previous surveys was an assessment of capital expenditures for infrastructure projects.

Check the home page of the North Dakota Petroleum Council’s website at ndoil.org for the final report.

away and stored. When the lignite vein is removed the work of reclamation begins. At the Falkirk Mine the reclamation has been both extensive and successful.

“That’s the best part of my job, to see the reclamation done,” said Stoltz. “I like to see farmers cutting hay, raising cattle and growing crops. That’s the best part.”

One of the highest profile reclamation projects on Falkirk property was Coal Lake. The mine reclaimed the property following several years of coal mining. The land was contoured, productive soil replaced, cover crops planted and water returned to the newly named Coal Lake. The property was given to the state of North Dakota and stocked with fish by the Game and Fish Department. Ice fishing activity at Coal Lake was quite brisk this past winter. The lake and surrounding area is a shining gem of an example of proper reclamation.

In an operation where all earth moving equipment is much larger than what is used in general construction projects, enormous Kress trucks that have a capacity of 200-300 tons for example, Falkirk’s massive dragline easily dwarfs other equipment. “Chief Ironsides” is not used for picking up coal, but rather for removing huge scoops of dirt lying above coal veins.

“The bench the dragline is on has to be at a certain level,” explained Stoltz. “Instead of using dozers we use the dragline. It moves dirt cheaper.”

Indeed it does. The dragline uses a bucket that can pick up 125 square yards of dirt per scoop. It operates 24 hours a day, seven days a week and is powered by electricity.

“Twenty-two thousand volts,” said Stoltz. “There’s six motors and 1,400 horsepower alone just to pull the drag to bring the bucket in. That’s 8,400 horsepower.”

The massive dragline became operational in 1980. At

that time it was estimated to last until 2012. However, says Stoltz, a good maintenance program and various upgrades have increased the expected life span of “Chief Ironsides” until the year 2030.

The impressive dragline emphasizes the improvements made in lignite extraction in the past several decades. At one area of exposed lignite, approximately 50 feet below ground level, tunnels can be seen along the tall sidewalls adjacent to where 200 ton Kress trucks are being loaded with coal. The narrow tunnels were part of a much older coal mine.

“They are from an old mine probably in the 1940s or 50s.

There was a hole at the top of the ground and they went down an elevator to an underground shaft,” said Stoltz.

“They used mules and small horses to pull carts along a track and bring the coal back.”

Carts used to extract coal from the tunnels carried about three tons of coal. Today, the massive Kress trucks at Falkirk carry 200 tons of coal and are powered by a 1,700 horsepower engine.

Today’s equipment opens up the land to expose the coal, eliminating the risky business of using explosives and tunneling beneath the earth. It is also a much more efficient way of bringing all mineable coal to the surface.

At Falkirk, the Kress trucks that haul the coal from the pits, much of it in very large pieces, dump the lignite directly into a crusher pit that is the first stage of preparing lignite for the electrical generation process. A second crusher reduces the lignite to thumb-sized nuggets. A third machine pulverizes the lignite into dust which is then moved by conveyer belt to the Coal Creek generating station which produces affordable electricity.

“When you see the big draglines, over 400 people employed and all this work, you realize that the cost of electricity is not that bad,” concluded Stoltz.

COAL HARD FACTS: Many early coal mines in North Dakota were family operations.

Some early North Dakota draglines used had previously been used to dig the Panama Canal.

Five major coal mines operate in North Dakota today.

Western North Dakota’s coal reserves are said to contain a nearly 400-year supply of easily mineable coal.

North Dakota’s lignite coal is used almost exclusively for power generation.

The huge dragline “Chief Ironside” at the Falkirk Mine operates on electricity.

Saturday, April 8, 2017

Home Continued from Page 1

“Whether our space is small or large, that’s irrelevant. You want to make sure that space is well used,” Herigstad said, noting there’s more fun options for that organization than there used to be.

Geinert said people are more conscious of energy efficiency in today’s market as well.

“Houses are built with energy in mind,” he said.

Roof overhangs for shade and windows facing south are among the design features used to complement better insulation with codes now calling for R-21 as opposed to R-19.

Inside the home, gray and

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white are the new colors as people move away from wood tones. Geinert calls it moving from warm colors to cool colors, creating a more modern, contemporary feel.

Herigstad agrees gray and white are the standard and are classics that will stand the test of time.

Erika Kelly, interior designer at Souris River Designs, Minot, said she’s seeing a lot of contemporary design, including painted cabinets in gray, black or white. Cabinets and countertops are the biggest remodeling projects taking place, but Kelly recommends people also consider lighting updates, which can transform a space with modest effort.

Kelly said clients are more knowledgeable about

what they want.

“I feel people are a lot more aware of different products,” she said. “Sometimes people are wanting to do out-of-the-box things. We have the ability to customize our products.”

“People want to be more informed,” said Jim Burckhard with Minot Builders Supply. “Years ago, they would rely on people at the lumberyard. Now when they show up, they have done their homework. They have an idea what they want and they are not willing to take no for an answer. It means everybody has to be a little bit better at their job.”

Minot Builders Supply works with contractors to provide the new styles clients are requesting. For instance, when it comes to

Source: Minot Housing Supply and Demand Analysis Update

Boost Continued from Page 1

dents and non-resident workers in Minot by 2024, housing will be short without more construction. At that time, it is estimated there will be 14,376 owner households and 10,918 renter households needing places to live.

Based on an analysis of building permits and occupancy permits issued from 2011 to 2016, researchers found 184 multi-family housing units under construction in August 2016, representing a “pipeline inventory” of multi-family housing. In addition, there were 258 “foundation only” permits issued, of which 48 were open/active.

The study report stated in summary: “As long as the Bakken oil fields remain in operation, the cycles of the oil industry, in conjunction with the currently over-built market in Minot, can impact rents and housing availability.

Over time, as factors such as population growth and the NDR (National Disaster Resilience) buy-out/buy-in program create new demand, the vacancy rates in market-rate multi-family housing will certainly decline and rents will normalize.”

The study continued: “Fortunately, Minot has not experienced high, longterm housing vacancies.

Properties which remain vacant over a long period of

time and are more likely to contribute to blight, high foreclosure rates, and abandonment. Areas that experience higher levels of long-term residential vacancies generally have a low housing demand and a very weak housing market.

Minot should continue to monitor housing conditions to ensure that areas where higher vacancies or abandonment occur are quickly identified and addressed using tools that are already available. In addition, recommendations for monitoring residential building permits, job growth, and other analytics should be considered and policies developed that could help avoid overbuilding in future oil cycles.”

windows, buyers want ease of operation and ready-to-go styles.

“Nobody wants to paint anymore. Everybody wants low or no maintenance,” Burckhard said.

Technology also is changing the industry, he said. Energy performance of windows and doors has improved, and it’s not just Rfactor that people need to consider any more. Now the talk is about “designs pressure,” which considers various structural factors, including how the window handles water and air.

People also have more choices than ever, forcing suppliers to do their research to keep up, Burckhard said.

“People definitely want to have options,” he said.

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MINOT BUILDING PERMITS ISSUED 2005-2016 2,557 single family dwellings and townhomes 369 multi-family dwellings 1,059 residential garages and carports 25 hotels and motels 34 amusement and recreational 11 churches 191 industrial and manufacturing 4 service stations and garages 3 parking garages 1 hospital/institution 111 offices, banks and professional 25 public works and utilities 26 schools and educational 188 stores, customer service, warehouses 185 other structures 2,416 residential remodel/addition 994 commercial remodel/addition

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Saturday, April 8, 2017

North Dakota’s oil production remains high

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Lynn Helms, director of the North Dakota Department of Mineral Resources, said, “Operators are shifting from running the minimum number of rigs to incremental increases throughout 2017 as long as oil prices remain between $50 a barrel and $60 a barrel West Texas Intermediate.”

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By ELOISE OGDEN • Regional Editor • eogden@minotdailynews.com

TOP STATES IN CRUDE OIL PRODUCTION

North Dakota’s oil production grew from 235,925 barrels of oil a (April 2016 data) day in January 2010 to an all-time high of 1.23 million barrels of oil – Texas a day in December 2014.

– North Dakota Although the state’s oil industry as well as the entire petroleum industry has gone through a decline in production as a result of – California falling oil prices in the past months, the state continues to produce – Alaska high numbers of oil and natural gas.

– Oklahoma “The Bakken,” the name on North Dakota’s lucrative oil-producing formation, was the 10th oil field in the world’s history to ever reach 1 million barrels of oil a day. It achieved that mark in April 2014.

North Dakota’s Bakken also is one of only three oil fields reaching a million barrels of oil a day located in the United IMPROVED TECHNOLOGY CREDITED States. The other two U.S. oil fields with that status are in FOR ND’S HIGH OIL PRODUCTION Texas.

The other oil fields with that claim, according to Bakken Oil Business Journal, are: North Dakota is the second top crude oil-producing – Ghawar in Saudi Arabia state in the United States.

– Burgan in Kuwait An increase of 251 percent in North Dakota oil produc– Cantarell in Mexico tion from 2010 to 2014 is attributed to horizontal drilling and – Daqing in China hydraulic fracturing endeavors in the Bakken shale forma– Samotlor in Russia tion.

– Kirkuk in Iraq “A revised assessment released in 2013 estimated that – Prudhoe Bay in Alaska there are more than 7 billion barrels of technically recover– Eagle Ford and Permian, both Texas able oil from the Bakken and Three Forks formations in the Once refined, 1 million barrels of oil is enough to fuel Williston Basin; much of that oil is in North Dakota,” said the more than 48,200 cars with gasoline and over that many veU.S. Energy Information Administration. hicles with diesel, the online publication reported.

North Dakota crude oil production surpassed 1 million In his March report, Lynn Helms, director of the North barrels per day in April 2014. The record is the result of inDakota Department of Mineral Resources, said oil price weakcreasing crude oil production from the Williston Basin’s ness is anticipated to last into the second quarter of 2017.

Bakken and Three Forks formations in North Dakota and eastern Montana.

Rigs actively drilling Although Bakken oil production initially began in the 1950s at Antelope Field in North Dakota, large-scale proIn January 2010, 81 rigs were actively drilling in the North duction growth did not begin until after the discovery of the Dakota oil patch. That number declined in past months due Parshall Field in 2007. Since then, advances in drilling to the drop in oil prices. The number of rigs has been fluctumethods and technology, a better understanding of the geating but only 38 rigs were actively working in North Dakota ology of the Bakken, higher crude oil prices, and the formain January of this year. tion’s large size and number of wells all have contributed to “Operators are shifting from running the minimum numhigher production and to the potential for continued future ber of rigs to incremental increases throughout 2017 as long growth. as oil prices remain between $50 a barrel and $60 a barrel As more wells are drilled in the Bakken, the base reWest Texas Intermediate,” Helms said. source becomes better defined. Because the Bakken has On March 10, the North Dakota Division of Oil and Gas, rea relatively low thickness (not exceeding 250 feet) and low ported 45 rigs were actively drilling in the state. The Oil and permeability, better information on the location of available Gas Division is a division of the N.D. Department of Mineral resources can quickly translate into an increase in crude oil Resources that regulates the drilling and production of oil and production volumes. gas in North Dakota Defining the resource in any formation is critical in foreHelms said the low oil price associated with lifting of sanccasting the growth and sustainability of its oil and natural tions on Iran, a weak world economy and capital movement gas production. Factors such as the geologic extent, depth, to the Permian Basin continued to depress drilling rig county. thickness, and porosity of a formation can inform the estiThe Permian Basin lies underneath western Texas and mated ultimate recovery rate of wells that are drilled in a southeastern New Mexico. Late last year, the U.S. Geological formation. EIA uses geologic data to better understand inSurvey announced it estimates the Wolf Camp shale in the dividual well performances and the expected EUR in the Midland Basin portion of Texas’ Permian Basin has 20 billion Marcellus shale, and plans to expand these efforts over barrels of undiscovered, technically recoverable oil in the time to include other formations throughout the United Wolf Camp alone. USGS said this is the largest estimate of States, including the Bakken. continuous oil that it has ever assessed, according to Forbes.

Source: U.S. Energy Information Administration

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See OIL — Page 8

Rig efficiency, Oil industry changes spacing, DUCs in relatively short time

When the Bakken, the newest oil boom in North Dakota named for the lucrative oil formation called the Bakken, began depends on who you ask, said Alison Ritter, public information officer for the North Dakota Department of Mineral Resources in Bismarck.

Ritter laid out a timeline of the Bakken: “In 2006, hydraulic fracturing and horizontal drilling were paired together to make accessing the Bakken more realistic. But it wasn’t until 2009 that companies really started perfecting that practice by using multiple stage fracks,” Ritter said.

She said in early 2010 the North Dakota Industrial Commission signed an order creating North-South 1,280-acre spacing.

“And from there things took off,” Ritter said.

The North Dakota Legislature created the Industrial Commission of North Dakota (the “Commission”) in 1919 to conduct and manage, on behalf of the state, certain utilities, industries, enterprises and business projects established by state law, according to its website.

Current members of the commission are Gov. Doug Burgum, Attorney General Wayne Sanstead and Agriculture Commis-

By ELOISE OGDEN • Regional Editor • eogden@minotdailynews.com the oil discussion – drilled, uncompleted wells, or DUCs, Ritter said.

“While the concept of having uncompleted wells was nothing new to industry, the levels at which the DUC inventory rose to, was. The DUC count reached a high in September 2015 at 1,091. There are approximately 800 wells waiting on completion today. As price improves into the $55 WTI (West Texas Intermediate) range, the number of wells that get completed will grown,” Ritter said.

Other changes in the oil industry have also occurred.

“Completion methods have changed too,” Ritter said. “Companies are now using more water – 10 million gallons a well and 8 million pounds of proppant per well during completions. In 2012 the numbers were 2-4 million gallons and 3-5 pounds.”

“Lastly, and probably the most significant is that flaring has come down from the high of 36 percent in September 2011 to 12 perDrilled, uncompleted cent today,” Ritter said. She said it even wells dipped to below 10 percent in 2016, but Because of the increased rig efficiency and colder weather has made gas gathering diffithe decline in prices a new paradigm entered cult.

sioner Doug Goehring.

The governor is the chairman, and a quorum for the transaction of business consists of the governor and one additional member. The attorney general serves as general counsel.

Burgum has been elected to office for a term expiring Dec. 14, 2020. Stenehjem has been elected to office for a term expiring Dec. 31, 2018. Goehring has been elected to office for a term expiring Dec. 31, 2018.

The oil industry in North Dakota has changed in relatively just a few years. Ritter highlighted some of the other changes.

“The first big change to point to would be rig efficiency,” Ritter said. “In 2010, rigs were taking more than one month to drill one well. Today, rigs can drill anywhere from one to two wells a month. Companies are also more focused on the four core counties of Dunn, Mountrail, McKenzie and Williams. These areas generate wells that produce more oil and gas.”

Submitted Photo

Alison Ritter, public information officer for the North Dakota Department of Mineral Resources, said rig efficiency is one of the major changes in the oil industry.

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Most ND oil, oil-related products go to Canada FARGO – Nearly all of North Dakota’s oil and oil-related products go to Canada, according to the head of the U.S. Commercial Office in Fargo.

“99.5 percent of North Dakota’s oil-related products went to Canada and 88 percent of this was crude, with the rest being other oil-related products,” said Heather Ranck, international trade specialist, office director and global rural team leader with the U.S. Commercial Office in Fargo.

Ranck said North Dakota’s next biggest market for crude oil is Mexico with .45 percent.

After oil, the next highest products being exported are as follows, according to Ranck: 1) front end shovel loaders (aka. skid loaders).

2) Denatured ethyl alcohol (ethanol), with $101 million in exports in 2016, a 46 percent increase over 2015. 100 percent of this went to Canada.

3) Wheat, with $100 million in exports in 2016, a 41 percent decrease over 2015 (with 40+ percent decreases in exports to Mexico, Panama, Nigeria and Colombia; and a 488 percent increase in exports to Venezuela in 2016).

4) Tractors (exports of tractors remained almost the same as 2015).

5) Yellow dent corn with $88 million in exports, a 7 percent increase over 2015 and going mainly to Canada “Export figures are very dependent on macroeconomic conditions, and the strong U.S. dollar has made U.S. goods more expensive in foreign markets, which makes it more challenging for U.S. goods to compete against products from other countries,” said Ranck. “Low commodity prices also significantly affect purchases of both our crops and our agricultural equipment. Such conditions are always temporary and will rebound eventually.

Smart companies prepare during down times for the next boom cycle.”

“The most important thing is to realize that the oil exports are distorting our ‘true’ exports, but they must be understandably be counted because the oil is leaving the territory of the United States. The other consistency is that we are part of a very global economy and what happens on a national level and in other parts of the world have a very significant impact on our local producers and manufacturers,” Ranck said.

By ELOISE OGDEN • Regional Editor • eogden@minotdailynews.com

This graphic shows North Dakota exports with and without oil from 2000-2016.

ND exports up 2 percent in 2016 In a news release issued in February, the U.S. Commercial Service office reported: North Dakota exported $3.95 billion in 2016, a 2 percent increase over 2015, attributed mostly to more oil going through Canada.

Without oil, North Dakota’s exports decreased by 13.73 percent in 2016 over 2015, while U.S. exports decreased 3.38 percent.

North Dakota rose two spots in its ranking among U.S. states, from 42nd to 44th largest exporter among the 50 states.

In 2016, crude oil made up 42.19 percent of total exports from North Dakota.

Several of North Dakota’s other top exported products saw declines in 2016, including self-propelled dozers, tractors and wheat. Bright spots include export increases of 25 percent for dried peas and lentils, 46 percent in ethanol, 20 percent in biodiesel and a rebounding of exports of ag machinery to Russia. There was an 8 percent decline in the number of unique items exported from North Dakota, from 1,436 items in 2015 to 1,328 in 2016.

Canada continues to be North Dakota’s number one export destination, taking in $3 billion, or 77 percent of North Dakota’s total exports (an 11.73 percent increase over 2015).

Mexico is the second largest market for North Dakota products, importing $251 million (6 percent of N.D.’s total exports). Exports into Mexico decreased by 14.75 percent, caused primarily by a decrease in wheat exports.

North Dakota’s top six export markets after Canada all saw declining import values

“99.5 percent of North Dakota’s oil-related products went to Canada and 88 percent of this was crude, withthe rest being other oil-related pro.”

— Heather Ranck, international trade specialist, office director and glabal rural team leader at U.S. Commerical Office

from the previous year.

The U.S. Commercial Service is the lead trade promotion agency of the U.S. government. U.S. Commercial Service trade professionals in more than 100 U.S. cities and more

than 75 countries help U.S. companies get started in exporting or increase sales to new global markets.

Staff of international trade specialists will help companies: – Identify and evaluate international partners – Navigate international documentation challenges – Create market entry strategies – Other export related guidance A full-time trade specialist (Ranck) was posted in North Dakota in March 2005 and the office became an official U.S. Commercial Office in 2007, Ranck said. Ranck has been with the office throughout the time, based in Fargo, and covering all of North Dakota and nine counties of northwest Minnesota.

The office actively assists more than 120 different North Dakota or northwestern Minnesota companies resolve around 300 different trade matters a year.

The U.S. Commercial Service has been directly involved with hundreds of export transactions since 2005, representing millions of dollars in new sales for North Dakota and northwestern Minnesota. The types of companies using the services vary from agricultural machinery manufacturers, to aviation companies, to higher educational institutions.

“We provide one-on-one help to companies that want to sell products and services overseas, using our network of offices based in U.S. Embassies and Consulates around the world,” Ranck said.

For information on the U.S. Commercial Service, call the U.S. Commercial Service office at 239-5080 or email export.gov/northdakota/ or export.gov.

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Minot Daily News PROGRESS

Energy & Industry

Saturday, April 8, 2017

Saturday, April 8, 2017

Minot Daily News PROGRESS

Energy & Industry

Page 7

Minot Daily News PROGRESS

Page 8

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Saturday, April 8, 2017

En erg y & I n d u st ry

Oil Continued from Page 4

No rigs were actively drilling on federal surface in the Dakota Prairie Grasslands in western North Dakota, according to Helms in his March report.

Fort Berthold Reservation

Fort Berthold Reservation is one of the top oil-producing areas in the state.

Helms said activity on the Fort Berthold Reservation is as follows: – 10 drilling rigs (two on fee lands and eight on trust lands).

– 187,519 barrels of oil per day (117,099 from trust lands and 70,421 from fee lands).

– 1,582 active wells (1,097 on trust lands and 485 on fee lands).

– 114 wells waiting on completion.

– 507 approved drilling permits (367 on trust lands and 140 on fee lands).

Trust land is land held in trust by the federal government for the beneficial use of an individual Indian landowner or tribe. Fee land is land not held in trust by federal government and the landowner has broader property interest.

Helms said Fort Berthold Reservation has the potential for 1,658 future wells (1,171 on trust lands and 487 on fee lands).

The state had 13,333 (preliminary number) wells producing in January of this year, compared to only 4,628 producing wells in January 2010. The all-time high was 13,520 producing wells in November 2016.

Helms said the estimated inactive well count was 1,678, up 105 from the end of December to the end of January of this year.

He said an estimated 802 wells were waiting on completion, down five from the end of December 2016 to end of January.

More than 98 percent of the drilling

now targets the Bakken and Three Forks formations, Helms said.

He said North Dakota leasing activity is limited to renewals and top leases in the Bakken-Three Forks area.

As of January, the most recent figure available, North Dakota produced 1.5 billion cubic feet per day of natural gas. In January 2010, the state was producing 280,589 billion cubic feet per day of natural gas. The all-time high was 1.7 billion cubic feet per day of natural gas produced in November 2016.

Helms said the percentage of gas flared decreased to 12 percent “even with lingering winter weather-related freezing problems.”

“This also resulted in the Tioga gas plant operating at 65 percent of capacity,” Helms said. “The expansion of gas gathering from south of Lake Sakakawea is now starting up, but the crude oil and natural gas liquids transfer lines still have not been approved.”

Flaring

Helms said the January Bakken capture percentage was 89 percent with the daily volume of gas flared from December 2016 to January 2017 down 16 MMCFD. He said the historical high flared percent was 36 percent in September 2011.

Gas capture statistics are as follows: – Statewide, 88 percent.

– Statewide Bakken, 89 percent.

– Non-Fort Berthold Reservation Bakken, 90 percent.

– Fort Berthold Reservation Bakken, 83 percent. (trust lands, 82 percent, fee lands, 87 percent).

Helms said crude oil take-away capacity remains dependent on rail deliveries to coastal refineries to remain adequate.

The state’s five most oil-producing counties remain as Divide, Dunn, McKenzie, Mountrail and Williams.

Helms said seismic activity is up slightly with five surveys active.

“North Dakota leasing activity is limited to renewals and top leases in the Bakken-Three Forks area,” Helms said.

Electric co-ops serve North Dakota

By KIM FUNDINGSLAND • Staff Writer • kfundingsland@minotdailynews.com

North Dakota’s system of 16 distribution cooperatives brings electricity to 250,000 state residents. It is an astounding success story.

Electric cooperatives were formed for the purpose of providing rural customers with electricity in a reliable and affordable fashion. More and more residents bought into the idea as electricity began to replace other energy sources in rural areas. Electricity rapidly became available to areas previously thought much to costly to provide such a service. The cooperatives were born.

“We think we’re all in it for the members at the end of the line and try to do things for the communities,” said Maxine Rognlien, a member of the statewide board of cooperatives. “The customers have a say in what goes on.”

Indeed, customer-owned electrical cooperatives operate much differently from other businesses. Customers own the business and have a say in the operation.

While customer ownership has never changed, there has been vast improvements in how electricity is brought to a customer and how it is monitored.

“Oh, big time!” said Tom Rafferty, member services manager for Verendrye Electric Cooperative. “When we started in 1939 power poles were put in by hand.

They actually dug with shovels. Now we have digger trucks with big power augers that can dig a hole in minutes and place the pole in the hole. That’s an example of mechanical technology.”

Perhaps the greatest advancements seen by electric cooperatives have been much less subtle. The meter man, the guy

or gal who used to physically read meters to report on electrical usage, has disappeared. Today meters are read from a computer at any time during the day.

“There’s smart meters that turn electricity on or off remotely. Customers can go on-line and see how much electricity they are using anytime of the day,” said Rognlien.

“We went from manually reading meters to getting the information on your cell phone or in our office,” added Rafferty.

“We can switch power from one circuit to another with the click of a mouse. We can detect problems on our system from our office.”

The mission of some of North Dakota’s 16 electrical co-ops remains much as it was when they were first organized to serve rural customers. Verendrye’s role has changed much over the past several years, primarily due to growth of businesses within the Verendrye service area.

“We’re very diversified,” said Rafferty.

“We are very fortunate with rural, industrial and commercial accounts. The Minot Air Force Base is our number one account. We also serve Dakota Square Mall, Walmart, several Minot hotels and the YMCA to name some of them.”

Verendrye does not produce any electricity but rather is a distribution co-op.

They are one of 137 co-ops that own Basin Electric which is responsible for supplying the electricity to members of North Dakota electric cooperatives. Electric cooperatives have invested nearly $1 billion in distribution facilities in North Dakota and more than $2 billion in environmental equipment and controls.

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Minot Daily News PROGRESS

Page 9

En erg y & I n d u st ry

Not just for the military anymore

By JILL SCHRAMM • Senior Staff Writer • jschramm@minotdailynews.com

Minot is getting an opportunity to get in on the ground floor of a burgeoning industry with an announcement by SkySkopes last December that it is expanding its unmanned aircraft operation to the city.

The company has received a great reception from companies in the Bakken that could benefit from SkySkopes’ services, said company founder and president Matt Dunlevy, Grand Forks. “We are expecting that our operations in Minot are going to have a profound impact on us being able to get into the oil and gas industry and for the Bakken region,� he said. “We will be in range to get out there and do inspections.

The core of SkySkopes’ mission is inspection of energy assets such as pipelines and transmission lines, but it also is involved in agricultural, construction and engineering applications. Providing qualified and quality pilots is central to the job mission.

SkySkopes also has identified pilots, data operators and aircraft maintenance specialists within Minot whom it wants on its team. The company expects to have people contracted this month. “Everyone we found that we are going to be putting in our Minot office as pilots are from Minot. We are certifying them. They have proven themselves through their experience to be qualified and safe pilots,� Dunlevy said.

Minot Area Development Corp. has identified the unmanned aerial systems industry as one it plans to target for recruitment through its MAGIC Sky Initiative. “The Unmanned Aerial Systems (UAS) industry is an emerging industry that has experienced tremendous growth and demand over the last few years. North Dakota is quickly becoming known as the drone state. With a rural setting and wide open skies, Minot is a prime location for UAS operations.

Between military and commercial uses, the opportunities are unlimited for UAS businesses in the Minot area,� MADC stated in announcing the initiative.

Proximity to the Bakken, the proximity of the coal industry and wind farms, the dominance of agriculture in the region, the presence of distribution facilities, the existence of Minot Air Force Base, and the educational opportunities at Minot Public Schools and potential opportunities at Minot State University are listed as characteristics that make Minot well suited to the UAS industry.

Bakken applications of UAS include pipeline inspections, oil storage tank and boiler inspections, site surveys and stockpile management and reservoir volumetrics. Military applications include surveillance, disaster response and search and rescue. Agriculture applications involve data collection on crops and drainage.

MADC considers landing SkySkopes, considered to be one of the top UAS firms in the oil and gas industry, to be a good start for its MAGIC Sky Initiative.

SkySkopes gives Minot entry into emerging drone industry

SkySkopes Chief Instructor Pilot Cory Vinger flies a drone during a January power line inspection near Wilton.

Submitted Photo

“Between military and commercial uses, there are so many opportunities for SkySkopes in Minot, and even more opportunities for the businesses that utilize their services,� said MADC President Stephanie Hoffart. “SkySkopes has helped businesses save up to 70 percent in business costs. This will be huge for Minot businesses and MADC couldn’t be more thrilled to be a part of this exciting milestone.�

MADC has backed assistance of $375,000 from Minot’s MAGIC Fund to help SkySkopes purchase equipment. In exchange SkySkopes would need to meet job creation targets.

The MAGIC Sky Initiative also looks to partner Minot with the state Department of Commerce.

North Dakota already has invested more than $37 million in the UAS industry, MADC reports.

Northern Plains in Grand Forks was designated one of six national test sites for UAS by the Federal Aviation Administration to conduct research into drones’ airspace integration. The FAA allows drones to be flown up to 1,200 feet above the entire state and permits flights at night, a combination that makes North Dakota unique.

In December, Northern Plains became the first test sight to receive permission from the FAA to conduct beyond-line-of-sight flights from the Grand Forks area. Researchers in North Dakota are working on aviation-grade network services that will allow unmanned aerial systems to operate with a chase plane to monitor the drones.

The test site also achieved success in securing a block of spectrum from the Federal Communications Commission for transmitting commands and data during drone flights.

That’s the type of UAS environment, Minot hopes to tap into, beginning with SkySkopes.

Dunlevy started SkySkopes in an office at the University of North Dakota in October 2014 out of a desire to fill the need for unmanned aircraft flight operators in the Grand Forks area and in North Dakota. “It was striking to me that there was so much UAS activity here but there wasn’t a UAS flight company,� he said.

It took eight months, until June 2015, for the company to get the necessary FAA permits to actually consider itself to be in business. Unable to generate revenue, the fledgling company had lived off grants during that time. “It’s really interesting – the regulatory environment that we navigate. It also was definitely a learning process,� Dunlevy said.

However, the relationship with the FAA was a positive one, and the process went smoothly even though it took several months to reach a conclusion, he said. There was significant paperwork, but he noted it also was necessary because it is important that there be clarity surrounding the different aspects of the emerging industry.

Dunlevy said drones aren’t entirely a new con-

M

See DRONE — Page 10

BNSF, CP meet demands for freight service

By ELOISE OGDEN • Regional Editor • eogden@minotdailynews.com

Major freight trains serving the Minot area faced a challenging economic environment last year but are looking forward to continuing to meet demands for freight service and future growth.

BNSF and Canadian Pacific Railway serve the area. “BNSF Railway’s total volume across our network was down about 5 percent last year,� said Amy McBeth, Minneapolis, BNSF public relations director for this region. “This decrease was attributable primarily to lower volumes of coal, industrial products (including crude oil), and international intermodal freight.

While coal and our industrial products volumes will continue to ebb and flow, we don’t expect them to reach the peak levels we saw in the past.�

McBeth said BNSF expects this year to be better than 2016. “But how much and how quickly the freight environment will improve is unclear. Importantly for North Dakota, we moved record volumes of agricultural products in 2016 and we expect strong, steady ag movements throughout the year,� she said.

Canadian Pacific Railway officials said 2016 was a year “burdened with stiff economic headwinds and a challenging volume environment, the strength of the model was tested and proven.� They said that railway company turned a challenging economic environment into a successful operating year – one that has us poised for 2017 and beyond,� according to the railway’s 2016 annual report.

Andy Cummings, a spokesman for Canadian Pacific Railway, said train volume through Minot is approximately 12 per day, which includes some oil shipments.

CP’s 2016 annual reports shows the company’s overall crude business represented about 7 percent of merchandise revenues, which is 2 percent of total freight revenues in 2016. “Crude moves from production facilities throughout Alberta, Saskatchewan, and North Dakota. CP has connections to these production facilities as well as access to pipeline terminals. CP’s main crude destinations include terminals and refineries in the U.S. East Coast, Gulf Coast and West Coast on CP’s network and through established interline partnerships,� the report said.

See TRAIN — Page 10

Submitted Photos

ABOVE: BNSF officials expect this year to be better than 2016 but how much and how quickly the freight environment will improve is unclear, said Amy McBeth, a BNSF spokeswoman. Photo provided by BNSF. LEFT: Canadian Pacific Railway officials said 2016 was “burdened with stiff economic headwinds and a challenging volume environment, the strength of the model was tested and proven.� The railway is looking ahead to a better year in 2017, including project work planned in North Dakota.

Photo provided by CP Rail.

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Page 10

Train Continued from Page 9

CP moves numerous other products for customers as well.

The railroads are a major provider of services to customers.

“BNSF provides a transportation service to our customers; we move what they want, when and where they want it to go as markets demand,” McBeth said. “When looking at our overall volumes on our network (not just volumes in N.D.), crude oil volume has never made up more than about 5 percent of our total volumes, and it would be less than that now with the decreased volumes I noted.”

She said the weekly and monthly reports of the Association of American Railroads tracks carload volumes for all U.S. railroads can be seen at www.aar.org.

Both railroads have either called furloughed employees back to work or are adding employees.

“We did have employees furloughed in Minot, but began calling some back in the fall. Last month (February) the remaining furloughed employees were called back,” McBeth said.

Cummings said CP intends to fill 15 conductor positions in Harvey and 12 in Enderlin in the first half of this year.

The railroads are continuing to invest money in North Dakota for capital improvements and/or maintenance projects.

“Since 2013, BNSF has invested more than $1 billion in North Dakota expanding our capacity and maintaining our rail network so we can operate safely and reliably,” McBeth said. “Given the success we’ve had in prior years adding capacity to support our customers’ freight demands, our capital

Minot Daily News PROGRESS

En erg y & I n d u st ry plans in North Dakota last year and for this year focus primarily on maintenance projects. In 2017, we plan to invest another $80 million in our railroad network in North Dakota. This involves projects like replacing ties and relaying rail in areas throughout the state.”

CP also has projects planned for North Dakota.

“We do have some project work in North Dakota this year,” Cummings said. “Over the past few years, we have been extending a signaling and train control system known as Centralized Traffic Control across our North Dakota main line, and the final phase of this will be complete this year. Signals yet to be cut in extend from roughly Fessenden to Rogers; the rest of our route across the state is already in operation. This system improves efficiency by giving remotely located train dispatchers control of signals and switches. It is also capable of detecting some defects in rails, making operations safer.

“The other local projects this year are both at Portal, where we cross the border into Saskatchewan. We will be extending the passing track at Portal, and concurrently, adding a pad and machine so we can remove individual containers from intermodal trains. This should reduce delays to container shipments as a result of the customs process,” Cummings said.

McBeth said as more pipelines come online, the market will determine whether crude oil moves by pipeline or rail.

“Rail’s service flexibility will continue to offer value to North Dakota’s petroleum producers and we expect Bakken crude to be among the many commodities we haul in North Dakota. We will continue to invest in our network in the state to serve all customers and meet their current demands for freight service and their future growth,” she said.

Saturday, April 8, 2017

Drone Continued from Page 9

cept. Drones, in some form, can be traced back to World War II. However, the country is in a new age of development, spawned by the military. After Grand Forks Air Force Base was targeted by a base closure commission in 2005, the military began to take a serious look at UAS and identified the Grand Forks base as a center of operations.

The arrival of the first Global Hawk aircraft in May 2011 signaled the industry had arrived, but the Grand Forks community already had been preparing. UND had begun offering a bachelor’s degree program in unmanned aerial systems in the fall of 2009.

Dunlevy said SkySkopes is focused on taking the advances first developed by the U.S. military into the U.S. commercial sector.

“On the defense side, we are decades ahead of the rest of the world. On the commercial side, we are maybe a couple of years behind,” Dunlevy said of American drone activity.

SkySkopes is committed to building that commercial activity.

“We also take pride in the fact that our piloting role on the commercial side is going to play a part in getting the U.S.

Jill Schramm/MDN

Matt Dunlevy with SkySkopes presented the company’s plans for a Minot presence at a news conference in December.

back to maybe a leadership position,” he said.

The future of the commercial UAS industry is bright, he added.

“We are going to see dozens if not hundreds of billions of dollars of economic stimulation in the United States because of the commercial use of UAS,” Dunlevy said. “From a commercial aspect, within 15 years, you are going to see a tremendous benefit based on the advent of commercial UAS.” A 2013 report by the Association for Unmanned Vehicle Systems International estimated $82 billion in economic impact in the United States from 2015-2025, with 103,776 direct and indirect jobs created in the UAS industry. It projected a spike in industry growth in North Dakota to 2017, followed by continued gradual growth to nearly 60 direct UAS jobs by 2025. The report lists $83 million in cumulative economic impact in North Dakota from 20152025 and 105 direct and indirect jobs created.

The forecast is dependent upon the FAA developing new regulations integrating UAS into the nation’s airspace, available capital and other potential unforeseen factors.

The association listed numerous areas in which UAS might have a presence across the country, including wildfire mapping, agricultural monitoring, disaster management, thermal infrared power line surveys, law enforcement, telecommunication, weather monitoring, aerial

imaging/mapping, environmental monitoring, oil and gas exploration, freight transport and television news coverage, sporting events and movie making.

Dunlevy said he expects to see many changes in the years ahead, affecting aspects from training and technology to the regulatory end of the industry.

Dunlevy said the day is coming when drones will increase their endurance, reliability and air worthiness, enabling them to fly for much longer times and distances. The computer systems that collect data will become more advanced and capable of acquiring more and new types of information.

Currently, manufacturers of drones are where the action, innovation and revenue is in the industry, Dunlevy said. In the future, the big winners will be the developers of the computer and data-generating systems, he said.

Regulatory rules will need to be developed that address safety, privacy and ownership of collected data, Dunlevy said.

The rules are likely to change in ways that will turn the industry loose, such as allowing drones to be flown without the need for the operator to keep them in line of sight.

“When those come out, that’s when we will see the real efficiency of unmanned aircraft. That’s when unmanned aircraft will be operated in a way that truly does complement and add to the value of manned aviation,” Dunlevy said.

Saturday, April 8, 2017

Minot Daily News PROGRESS

Page 11

En erg y & I n d u st ry

Clean, efficient HYDROELECTRIC POWER

By KIM FUNDINGSLAND • Staff Writer • kfundingsland@minotdailynews.com

Photos by Kim Fundingsland/MDN

ABOVE LEFT: Dale Evenson, Garrison Dam Power Plant manager, left; and Todd Lindquist, Garrison Dam Project manager, oversee operation of the production of hydroelectric power through five turbines within the facility.

ABOVE RIGHT: This photograph shows the Garrison Dam spillway as it was nearing completion of construction. The spillway was completed in 1956. Note the workers at the left center of the photograph.

MAIN RIGHT: Shown here is the Garrison Dam Power Plant and the large surge tanks located adjacent to it.

R

RIVERDALE – The size of the machinery is unmatched in North Dakota. The electrical power generated is vital to many areas of the United States.

The reliability is as good as it gets. The Garrison Dam Power Plant is a very impressive facility.

Five massive turbines powered by water flowing through tunnels connected to nearby Lake Sakakawea spin an equal amount of huge generators that produce electricity. Hyrdoelectric power generated in North Dakota supplies clean, reliable electricity to customers across a wide area of the U.S. “The country has become so dependent on having their electricity all the time, twenty-four seven,” said Todd Lindquist, U.S. Army Corps of Engineers Garrison Dam project manager. “The reliability has become a much bigger focus in recent years than it has been in the past just because a short outage can have significant impacts.”

Dale Evenson is the manager of the Garrison Dam Power Plant. He understands the importance of power produced at the North Dakota hydroelectric facility.

“Power from the Garrison Power Plant is tied to the grid which is marketed by the Western Power Administration,” said Evenson. “The grid is fairly large. Western Area Power and the Southwest Power Pool is what we are a part of now. It’s pretty much down the central portion of the U.S.” The five hydroelectric turbines that drive the power plant generators are capable of creating about 575,000 megawatts of electricity. It is a significant amount of power. About 200 megawatts is what is generally needed for a city of 150,000 people.

C

“The amount of power we can produce is largely determined by the elevation of Lake Sakakawea and the volume of water we have to release,” said Lindquist. “When we do have available water we utilize it as much as possible to generate hydropower.”

Hydropower is one of eight authorized purposes of the Garrison Project, not the only purpose. Sometimes a balancing act is required for the Corps of Engineers to meet all of the authorized purposes, but hydroelectric power remains a key factor as the demand for “green” energy continues to grow.

“Hydropower is a green source of energy,” says Lindquist. “It’s very reliable. We have a lot more flexibility than other types of facilities because we can start and stop quickly.”

It takes just a few minutes to open the gates to the tunnels that funnel water to the power generating turbines.

That means electricity can

GARRISON DAM PROJECT FACTS

Construction began in 1946.

Dam closure April 1953.

Operating pool reached August 1955.

First hydropower generated January 1956.

Third largest reservoir in United States.

Garrison Dam is 2.14 miles long.

Times continue to change in commercial construction

By JILL SCHRAMM

File Photo

Workers make progress in the construction of the Ward County jail expansion Feb. 8.

Commercial construction activity can be cyclical, and the Minot region is seeing that cycle change as it comes off boom times to settle into a slower pace.

But that makes it a good time for businesses thinking about projects to take a serious look, said Jason Sanders, president of Rolac Contracting, Minot.

“It’s a fantastic time for businesses to be looking at remodeling or additions or new construction. There’s lots of companies looking for work right now so you are going to get a good bid. You are going to get attention,” he said.

Sanders said the slowdown in activity will mean fewer out-of-state companies remaining in the area, but the industry will remain competitive.

“I think you are going to see prices come down and competition get a little tighter,” he said. “But business is still going to keep moving. Businesses are still going to keep developing. You are still going to see construction.”

Jerome Gruenberg, project manager at Mattson Construction, is a veteran of the industry and can recall extreme swings from the recent boom times to years when no appreciable

begin flowing almost as soon as the need arises. A new switchyard that came on line in recent years has further boosted the reliability of electricity produced at Garrison Dam, giving the facility modern, state of the art control systems.

“What impresses me the most at this facility is the reliability and consistency of the power that we produce and the minimal numbers of failure and breakdowns,” said Lindquist.

According to Evenson about 21 people work at the power plant, making it a very efficient operation for the volume of power produced. Profit from the sale of electricity generated at the plant, which approaches $40 million per year, goes directly into the nation’s treasury.

Workers began grading the embankment that later became Garrison Dam in 1947. The power plant and electrical switchyard were completed in 1956, the year the first hydropower was produced at Garrison Dam. One of the most impressive structures associated with the power plant is the intake structure situated on the Lake Sakakawea side of Garrison Dam, just above the power plant. It is there that water enters five 24-foot diameter tunnels traveling underneath the dam to the five turbines in the power plant.

The huge tunnels are 1,466 feet in length.

The intake has the unique distinction of being the tallest building in North Dakota. The state capitol building in Bismarck, known as the “Skyscraper on the Prairie,” is 21 stories tall and just inches short of 242 feet. The Garrison Dam intake structure, although much of it lies under water, is 249 feet high.

building was going on. Slower periods mean taking on smaller projects and reaching out to more of the rural areas, he said.

The industry is always advancing and changing, though, Gruenberg and Sanders said.

An industry change that may be having the most impact on contractors is the speed at which projects must move today, Gruenberg said.

“Years ago we would get a job and there would be a year to 18 months to do it. Today, they want you to bid and put up the building and turn over the keys in weeks or months.

They want immediate use of the building because they have a big investment and they want some return. They don’t want to wait to start collecting the rent or selling the products,” Gruenberg said. “We have to find more efficient ways of doing things.”

The result is architects and designers incorporating features that can be built more quickly and easily, he said. Contractors are putting on more workers to get more done faster. Better tools and heavy equipment also add to the efficiency of the work.

Sanders agrees the speed required on proj-

Senior Staff Writer • jschramm@minotdailynews.com

ects has changed the industry, and the technology advances have helped make that speed possible. Like any industry, technology is providing new tools and equipment that impact the worksite, he said.

Advances also offer new types of exterior finishes, Gruenberg said. The majority of buildings once were plaster, stucco or metal and now one sees imitation panels and new types of exterior insulation and finish systems using a composite materials.

Gruenberg added that Minot’s building requirements seek to ensure aesthetics and character, which rules out the steel or plain buildings of the past. However, today’s metal siding no longer is plain, with colors and a mix of horizontal and vertical lines in building designs, he said.

Specialization also has added to efficiency for builders.

Gruenberg recalled the days when general contractors brought in their own workers to do nearly all aspects of the work other than electrical and plumbing, which were subcontracted.

Now, much of the work, from erecting metal studs to installing sheet rock, is specialty work

done by subcontractors.

“We used to have carpenters and laborers and brick layers and operators and other union workers – all these trades under our umbrella.

Today, they are all separate,” Gruenberg said.

Large projects may involve 15 to 20 subcontactors and may be under the charge of construction managers rather than general contractors. Large projects, particularly public projects, typically involve construction managers, Sanders said.

Another change more noticeable by the public is the amount of year-round construction.

“We are seeing a lot of year-round construction now, primarily because of sheltering. It’s so much easier today with the things that we have and the things that are available to us to shelter and heat a building,” Gruenberg said. “It’s not unusual to do an outside job. We are pouring concrete in the cold.”

Sanders noted the cost of sheltering makes year-round construction less affordable, though. During the boom, that was less of an issue in Minot, but as the economy changes, there may be less of the year-round, outdoor work, he said.

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