Minot Daily News
GEOTHERMALENERGYGAININGPOPULARITY
Energy
SATURDAY, APRIL 16, 2016
MinotDailyNews.com • Facebook.com/MinotDailyNews
BY ALLAN BLANKS
LEFT: The Minot State University Dome utilizes geothermal energy. Allan Banks/MDN
Staff Writer ablanks@minotdailynews.com The 21st century is the age of efficiency, especially when it concerns daily energy consumption. As the world becomes more environmentally conscious, and seeks less dependency on fossil fuels, geothermal energy is gradually gaining consideration among businesses, homeowners and the scientific community. “Numerous homeowners and businesses have invested in geothermal energy,” said Minot Community Relations and Communications Manager Tom Rafferty of Verendrye Electric Cooperative. “We have geothermal energy at both of our offices in Minot and Velva.” Founded in 1939, Verendrye has provided 77 years of service, while contributing 20 years toward advising members about geothermal energy. True to its tradition, Verendrye continues to address the needs of the community and encourages members to invest in geothermal energy. “We want to encourage our members to conserve energy,” Rafferty said. “It’s the smart thing to do economically and environmentally. So, we practice what we preach, and use geothermal energy to show that we, too, are practicing energy conservation.” Will Gosnold, of the Harold Hamm School of Geology and Geo- For residents of Ward County to learn about tax exemptions: logical Engineering at the Univerwww.co.ward.nd.us/264/Taxsity of North Dakota, echoes the Equalization ideas of Rafferty. “Environmentally, geothermal Database with state incentives for energy is very good because it prorenewable energy: duces virtually no pollutants,” Goswww.dsireusa.org nold said. Geothermal energy is heat extracted from the earth, that is nearly free of pollutants, completely renewable and sustains a yearly temperature close to 57 degrees Fahrenheit. To gain access to this resource, ground source heat pumps are built inside homes or places of business, in which they connect to a heat exchange system underground. For the exchange of heat to occur, a fluid (usually being water) is run from the ground source heat pumps, and through the heat exchange system which picks up heat from the ground and delivers it to a residence or place of business. During the summertime, the heat below the earth’s surface is cooler and throughout the winter months, the temperature beneath the ground is warmer than that above. As a result, geothermal energy can provide both heating and cooling options for its users. Throughout Minot and across the world, geothermal energy is being explored and utilized. “This ground source heating and cooling system is widely used throughout Europe,” Gosnold said. “This system could be much more heavily used in the states. You can use this for single houses, groups of houses, and buildings.” Not only can geothermal energy produce heating and cooling, it can also generate electricity.
BELOW: For 20 years, Verendrye Electric Cooperative has shared quality advice and provided rebates to members interested in geothermal energy. Allan Banks/MDN
BOTTOM: Image of geothermal pump, courtesy of Verendrye Electric Cooperative. Submitted Photo
Online:
“Out in the Bakken, there is a great need to pump the oil,” Gosnold said. “The source of power is electrical and gas fired power plants along the Missouri river. If you boil the water and run it through a turbine which then powers the generator, that in turns creates electricity. What they’re doing in that region where there is no car lines or real accidents, they are burning diesel fuel and propane on site. Instead, they could actually take the steam out the oil and water mix coming up and use that to generate electricity.” Energy conservation has benefited both Minot Air Force Base and parts of Minot State University, which currently utilize geothermal energy. John Webster, a professor of geoscience at MSU, has seen the campus convert to geothermal energy. Several buildings, including the MSU Dome, library, science building, and others are connected to a geothermal system. Aside from the initial conversion, MSU has yet to experience any glitches as the buildings are operating normally.
“Certainly there were some disruptions when the buildings were being converted,” Webster said. “As we did before, we have cooling and heating.” Michael Zerr, the owner and manager at Cool Fish Refrigerating, Heating and Air, cited increased geothermal usage among farmers. “On the farms, where you have families keeping the land for generations, we’re seeing more geothermal investments,” Zerr said. “Farmers are seeing long-term return on their investments. Despite the hefty investment up front, farmers know this could be useful for generations to come. Another thing to consider in the incentives available for individuals who are able to apply for them.” Whether you’re a farmer, business owner, or homeowner, there are a variety of websites that can financially assist your ability to purchase geothermal energy. For residents of Ward County, you can visit www.co.ward.nd.us/ 264/Tax-Equalization to learn about tax exemptions for investing in
Solar energy is a flexible energy technology
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olar energy is becoming an affordable, convenient source of power for businesses and residents alike in Minot. Solar power, energy that’s created from the sun that’s converted into thermal or electrical power, is the cleanest and most abundant renewable energy source available. The United States has some of the richest solar resources in the world. Modern technology can harness this energy for a variety of uses, including generating electricity, providing light, and heating water for domestic, commercial, or industrial use. There are several ways to harness solar energy: solar
See GEO — Page 11
By PHIL TORRES
Staff Reporter • ptorres@minotdailynews.com electric, solar heating and cooling, concentrating solar power (typically built at utility-scale), and passive solar. One example of this is at Northern Plains Feeders and its use of five or six solar panels for watering cattle. Danny Seright, rancher and feed operator at Northern Plains Feeders in Towner, has had very little trouble with the solar panels. “Lightning might burn out a well but that could happen with anything using electricity,” said Seright. Solar panels and water pumping have become a natural fit. Generally, water is needed most when the sun shines the brightest. Solar modules generate the most
Submitted Photo
As onlookers watch a demonstration from Verendrye Electric Cooperative, they learn how solar is an economical choice over windmills and engine-driven generators for most locations where we do not have utility power.
power in full sun conditions when larger quantities of water are needed to combat the heat. Because of this, solar is an economical choice over windmills and engine-driven generators for most locations where there isn’t utility power. Generally, the electric company doesn’t want to dig in remote areas for power cords due to cost restrictions. While solar energy is environmentally friendly, the main draw for the use of solar panels is cost and mobility. Seright doesn’t pay for power, just a flat fee for the equipment. Solar power plants can be located on site similar to Seright Ranch or as a central-station similar to traditional power plants.
While some utility-scale solar plants can store the energy they produce for use after the sun sets, one major issue is dealing with cloudy days. Seright is a member-owner of Verendrye Electric Cooperative, the non-profit cooperative that provides him with the solar equipment. He gets to vote for local citizens to serve on the co-op board of directors and the non-profit returns money to its members in the form of capital credits. With more than 200 solar panels in use, according to Community Relations Manager Tom Rafferty at Verendrye Electric Cooperative, North Dakotans are moving into the future of energy use.
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Saturday, April 16, 2016
RISE AND DECLINE
Ron Ness, center, president of the North Dakota Petroleum Council, tells a group of teachers about the Bakken, the lucrative oil-producing formation in western North Dakota. Oil prices have declined over past months but thereʼs plenty of work still going on in the N.D. oil field.
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Submitted Photo
ND oil patch keeps pushing on By ELOISE OGDEN
Regional Editor • eogden@minotdailynews.com
hat’s going on with the oil industry? “Obviously, the math just does not work at $30 oil for that rock,” said Ron Ness, president of the North Dakota Petroleum Council based in Bismarck, referring to a piece of shale, a black-colored rock, that he was holding in his hand. “As a result, a year ago and Black Friday in November of 2014 OPEC decided ‘you know what? We’re just going to do nothing,’” Ness told members of Young Professionals of Minot at the group’s March Power Hour in the Holiday Inn-Riverside in Minot. Since his presentation in March, the oil prices have continued to fluctuate. “But we’re a long ways from where we need to be obviously,” Ness said. “When OPEC made that decision they knew exactly what they were doing,” Ness told the group of young professionals. OPEC stands for the Organization of the Petroleum Exporting Countries. “For decades, all my generation heard about was our reliance on foreign oil – it’s 56 percent today, it’s 62 percent. We completely depended on OPEC. If you were one of the OPEC nations, you could pick up the phone and pretty much call the White House anytime you wanted over the last three or four decades and if there was trouble in the OPEC world, you could have three U.S. destroyer ships in the Persian Gulf at your request. Why? Because that was our life bread,” he said. He said energy is the core of the economy of the world. “We weren’t about to let Iran or other nations take over the energy resources and control them, and they’d basically control our destiny then. So as a nation that was priority No. 1,” he said. All of a sudden, he said,
What is the ND Petroleum Council? The N.D. Petroleum Council, based in Bismarck, is a trade association that represents more than 500 companies involved in all aspects of the oil and gas industry including oil and gas production, refining, pipeline, transportation, mineral leasing, consulting, legal work, and oilfield service activities in North Dakota, South Dakota and the Rocky Mountain Region. the Bakken, the name of the lucrative formation in western North Dakota, was unlocked, followed by a number of other formations in the U.S. “All of a sudden we’re producing tremendous amounts of homemade American energy and all of a sudden the things that happened over in the Gulf don’t really matter,” Ness said. He said countries overseas with lucrative energy resources started recognizing their place in the world was being diminished. “And if they don’t have oil, what do they have? Sand and wind and dust. They also like to live off $100 oil over there, but it’s all they have,” he said. “I think they knew exactly what they’re doing,” Ness said. He said they want to break the U.S. oil shale producer. “As an industry, I think we thought if we reduce our costs and produce the same amount of oil that we can survive through this thing. The reality was the market didn’t respond favorably to that. Somewhere in the world we kept waiting for the other guy’s production to drop...,” he said. He said they operate as a country and in this country, the oil and gas industry
operates as independent companies. “We have investors who have wants and needs. They (overseas) can act on behalf of an entire country so they’re financial strength is greater plus they can produce their oil over there, in Saudi Arabia at least, for fraction what we can produce this oil for,” he said. He said Bakken producers have had to make all kinds of different cost reductions and when oil gets to below $30 a barrel, they lose money on what they’re producing. He said production has dipped and it’s happening across all the U.S. oil plays. But, he said, “The reality is the Bakken is a worldclass resource just like our farm land is a world-class place to grow what the world needs,” Ness said. Ness opened his presentation to the Young Professional of Minot, telling about his experience when he got out of college. When Ron Ness graduated from North Dakota State University in 1984, he said there weren’t any jobs in North Dakota. “There were virtually no jobs to even apply for,” said Ness, president of the North Dakota Petroleum Council in Bismarck. He then was offered a job by Heidi Heitkamp at the North Dakota Tax Department. Ness said George Sinner was governor at the time and put a hiring freeze on state employment on about the day he was going to begin employment. Ness went to work selling shoes at J.C. Penney’s for six months until the hiring freeze was lifted. “That was a sign of times in North Dakota we don’t want to go back to and what happened during that very dark period for our state was we lost all of our young people,” Ness said. “We tried everything we could to find a way we could bring young people
“We’ve had a nine-year run and an incredible time in North Dakota. We needed that run in order to attract all that capital here to make this thing work and get this critical infrastructure in place. But these cycles come and go.”
— Ron Ness President, ND Petroleum Council on the downturn in oil-field activity
back to North Dakota.” Ness said he has been around Bismarck, politics and the state Capitol for three decades. He said the State Chamber of Commerce advanced a concept in about the mid’90s to change the name of the state. “That was a discussion for a lengthy period of time to change the name and maybe more people would want to move here,” he recalled. He said the state tried to incentivize every type of business they could. He said Gov. Ed Schafer came in and changed the mindset of the state that we have to work together instead of
against each other. “He got a community thing going and Ed Schafer means business was his mantra,” he said. He said Gov. John Hoeven took over and they’d also travel to communities. He recalled an opening of a call center in Minot that had five or 10 jobs. “On the oil and gas side today, I think we’ve lost in North Dakota 20,000 to 22,000 (industry) jobs over the past 14 months,” Ness said. He said most of those jobs paid around $120,000 a year on an average and with great benefits. See PUSHING — Page 4
Transloading facilities keep oil moving, just in smaller quantity
Saturday, April 16, 2016
By JILL SCHRAMM
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Staff Writer jschramm@minotdailynews.com
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Transloading facilities offer versatility to customers looking to deliver their product to markets where pipelines cannot currently access.
ith a slowdown in oil activity and greater interest in shipping crude by pipeline, the amount of Bakken product leaving North Dakota by rail isn’t what it once was. However, there’s still movement out there. Most rail-loading terminals in the Bakken still are active. The Bakken’s newest crudeto-rail facility came online in December at Palermo. Operated by Phillips 66, the terminal’s initial capacity is about 30,000 barrels per day. The company reported it is relying solely on trucks to deliver crude oil to the terminal until the Sacagawea Pipeline begins operation later this year. At that time, capacity would increase to 100,000 barrels per day. The pipeline would bring oil from areas in Dunn and McKenzie counties to terminals and pipelines in Stanley. Stanley is the location of EOG Resources’ transload facility, billed as the first unit train facility in the United States designed for crude oil. That terminal remains operational. A statement from the company noted: “EOG believes that its marketing and related logistics processes, including crude-byrail facilities, provide a competitive advantage, giving EOG the flexibility to direct its crude oil shipments via rail car to the most favorable markets. EOG expects to utilize its crude-by-rail network when it is advantageous.” Enbridge takes the same position regarding its transloading facility at Berthold. “Transloading facilities offer versatility to customers looking to deliver their product to markets where pipelines cannot curaccess,” Enbridge rently spokeswoman Katie Haarsager said in a prepared statement. “As long has customers are looking for this flexibility there will continue to be some need for transloading facilities. However, as oil prices have dropped, oil price differentials have steadily Transloading facilities in the northwest region of North Dakota. narrowed, and customer demand has shifted away from delivering crude by rail. As a result, the rail terminal has seen a slow and steady decline in crude deliveries.” At a time when oil activity is slowing, cific Railway land, in the area of the In contrast, she said, EnThunder Butte oil refinery under consome companies are looking ahead. bridge’s two oil pipelines origiU.S. Silica is proposing to construct a struction near Makoti. Most of the area nating in Berthold have seen rail transload facility to transport silica lies in Mountrail County with a smaller record throughputs in early 2016, sand from railcars to trucks. The sand is portion in Ward County. The company is due to the shifting demand from in the process of obtaining necessary used in oil well fracturing. delivery by rail to delivery by The proposed site is on Canadian Pa- permits. pipeline.
– Katie Haarsager
Enbridge spokewoman
MDN Graphic
Frack sand company looks to future U.S. Silica, headquartered in Frederick, Md., has been around more than 100 years and has multiple locations in the United States and internationally. Its website lists existing transload locations in New Town, East Fairview and Estevan, Saskatchewan.
Ups and downs
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By ELOISE OGDEN
Regional Editor eogden@minotdailynews.com
Even during the months of low oil prices, North Dakota is pumping out more than a million barrels of oil a day. Lynn Helms, director of the North Dakota Department of Mineral Resources, reported in March that the state had produced 1,122,100 barrels of oil a day or Lynn more than 34.7 milHelms lion barrels just for the month of January, the most recent information available
Pushing
Continued from Page 2
State officials say the majority of those who left the state never became residents of the state. “So we looked for decades for what was going to be this renaissance – how are we going to look for people to move back into my hometown, and build schools instead of close schools and add babies instead of lose our young people? I don’t think any of us would have ever thought that it was going to be this,” he said, referring to what is called the Bakken and has drawn many young people to North Dakota and the return of others who are former state residents. “It took ingenuity, it took risk, it took entrepreneurship, it took a tremendous amount of capital from all over the world to come here to figure out how to get oil out of it. That same technology we’re applying in agriculture in the state because we’ve got just better and better in what we do,” Ness said. He said what has also been discovered is if you create a thriving business economy in your state, many, many spinoff jobs. Ness said he spoke to the Chamber of Commerce in Watford City which has about 100 young professionals in its YP group, unlike 15 years ago when there were very few young professionals. He said when he came into the oil and gas business 16 years ago, he was one of five young people. He was 32 at the time. “We can create goodpaying jobs that utilize all types of skills. You’ve got an economy that is thriving – look at Fargo’s economy, it’s thriving on technology, it’s thriving on a lot of things. This will bring people back to North Dakota – jobs will bring people back to North Dakota,” he said. “I think as a state we’ve gotten a little soft. We’re kind of beginning to take things for granted,” he said, adding, “We’re really angry about federal government overreach.” “As a state, I think we’re going to have to step back a little bit and we’re going to have to up our economic activity, our economic development efforts, and go out and start talking to businesses again about recruiting good, high-quality businesses into North Dakota,” he said. “We need the young people that have come here or come back here and finding jobs here to get involved. You’re in the game in this group,” he said, referring to the YP group. “And you need to get in the next game, and the next game is figuring out where you fit on the school board
at the time. The preliminary alltime high for oil production in the state was 1,227,483 barrels a day in December 2014. It’s slightly less than a year ago at this time, but the numbers still remain relatively high. In 2015, the state produced 1,190,490 barrels of oil a day, or more than 36.9 barrels in January 2015. Compared to five years ago, the state’s oil production has greatly increased. In January 2015, the state was producing only 342,088 barrels of oil or 10.6 million barrels in January. Five years ago, Helms said 95 percent of the drilling was target-
or on the board at the hospital or on the volunteer board for a nonprofit or something like that because you are the ones who have to make the decisions,” he said. In his travels across the country and talking to top officials over the past two or three months, Ness said everyone continues to say the Bakken is No. 1 or No. 2, and it’s still producing 1.1 million or 1.2 million barrels of oil a day. “It takes a tremendous amount of people to produce that oil, to produce that gas, process that gas, transport that gas – all of those different things – so that’s why we still have tremendous amount of employment and tremendous upside, but the exploration side, the drilling new wells, the access other people’s money to put into these wells has got tough and it’s going to continue to be tough until there’s confidence restored in what we’re doing,” Ness said. “My prediction is that we don’t know what prices are going to do and how long they’re going to do this. It’s going to be a really rough year, it’s just the way it’s going to be,” he said. He said companies have continued to cut their costs and trim their expenses and do what they have to do to survive because many of them are in survival mode. “Those that have financial strength will look at this as an opportunity to possibly buy others,” Ness said. (The Wall Street Journal reported March 30 that according to the U.S. Energy Information Administration a high percentage of U.S. oil production comes from wells drilled in 2014 and the majority of it is from unconventional formations such as shale. The output has declined but it should have been worse because production from a shale well typically falls during its first couple years. Many wells have not been completed and are ready to come on line when prices rise a little more. The anticipation is the U.S. shale plays will revive once prices are more attractive.) Ness said it’s going to take awhile for the pendulum to swing back in the right direction. “Because you’re losing incredible workers so you’ve got to recruit back here,” he said. “You’ve got to restore your balance sheet, you’ve got to ensure that the price is going to be here and then you’ve got to go back to Wall Street and then you’ve got to go back to the investors and convince them to invest back here. I’m not just talking about the oil side, I’m talking about the development side and all of the different components.
ND continues high production of oil, gas
ing the Bakken and Three Forks formations. That percentage has gone up slightly to 98 percent in the Bakken and Three Forks formations in 2015 and this year. Here’s some other statistics for January 2016, January 2015 and five years ago, in January 2011, according to the N.D. Department of Mineral Resources:
Producing Wells January 2016: 13,129. January 2015: 12,181. January 2011: 5,315. (Preliminary all-time high was October 2015 with 13,190 producing wells.)
He said it’s not any different in the agriculture world. “I think it’s exactly the same scenario being played out because we’re essentially tied at the hip. We’re tied to commodity prices, and we do the same thing – we harvest oil every day and on the ag side, we harvest commodities,” he said. “That pendulum is going to swing. It’s swung so far this way, it takes that much longer for it to swing over here,” he said, indicating the far other side. “As a state, we have to get ahead of the curve, we’ve got to think forward a little bit more,. we don’t want to play from behind again. Recently the Williston City Commission voted to close down crew camps in the city by July 1. “I’m very frustrated with what the City of Williston did,” Ness said. “People that work on drilling rigs and on completion crews are no different than construction workers and people in the military. Many of those people have a home somewhere else, they’ve got a family somewhere else. People come here because the work is here and they follow that job and that drilling rig just like I would follow a construction crew if I would work on a construction crew. I’m not going to sign a lease for an apartment, I don’t want to live in a hotel because the costs will kill me. So the companies built these incredible professional-run crew camp facilities and the proposal was a reasonable compromise.” He said the market will determine “when things come and when things go if government stands back and lets it all happen.” “But that’s going to hurt those people. Now when we try to recruit them back, we’re kind of back to where we were in 2009. If all of a sudden we need 10,000 workers on the exploration side of the business, where are we going to put them? Ness said. “We don’t want to go back to where we’ve been. We didn’t like it there, we fought hard to get through that period of time and those people want an affordable place to sleep while they’re here and those camps provide a critical role but the City of Williston made that decision and I’ll guarantee you those are things that more people are going to stop and say, ‘You know, we need to get more involved in this process.’ I stand behind policymakers for decision they make because they’ve stepped into that arena and they make decisions they think best but sometimes like Donald Trump, it might be time for a new vision... I think that goes across North Dakota.” Ness said the oil play will go through this cycle,
Permitting
Natural Gas
January 2016: 78 drilling and Production 0 seismic. January 2016: 1.6 MCF (milJanuary 2015: 246 drilling and lion cubic feet)/day. 0 seismic. January 2015: 1.4 MCF/day. January 2011: 142 drilling (0 January 2011: 339,023 shallow gas) and 0 seismic. MCF/day. (All-time high was 370 in Oc(Preliminary all-time high was tober 2012. November 2015 at 1,676,279 MCF/day.)
ND Sweet Crude Prices
Rig Count
January 2016: 52. January 2016: $21.13/barrel. January 2015: 160. January 2015: $31.41/barrel. January 2011: 163. January 2011: $80.02/barrel. (Lowest since March 2007 (All-time high was $136.29 on when it was 33. All-time high July 3, 2008.) was 218 on May 29, 2012)
but it will be back. “We’ve had a nine-year run and an incredible time in North Dakota. We needed that run in order to attract all that capital here to make this thing work and get this critical infrastructure in place. But these cycles come and go,” Ness said. He equated it to years ago when the homesteaders settled the land. “This is what we’ve always done. This is what our ancestors did when they came here in covered wagons. They hunkered down until they could get that first field tilled and planted, and they survived the hard times,” he said. “So it’s nothing new and we shouldn’t think it’s anything new. It takes a paradigm change in how we think about how much our government is spending,” Ness said. “We don’t have a revenue problem in Bismarck, we’ve got a spending problem in Bismarck and it happens anywhere where you have excess supply of money or anything else. You tend to spend it and then also are
a little short, and we’ve got to cut back. We’ll get through this. It’s going to be deeper, longer than certainly any of us thought,” Ness said. Ness, who recently spoke to the Basin Electric Cooperative board of directors, said the cooperative has a huge investment in western North Dakota in its work being done to grow the communities and grow the well count – all things that electricity is needed. “They asked the same questions that you would ask. They’re very concerned about what does the future look like, how do we know the price is going to recover to a point the investment and the capital will come back to the Bakken because obviously last time in the 1980s, it was 17 years before a price increase again,” Ness said. He said the biggest difference between today and the 1980s is in the 1980s the oil boom was a price play. He said companies would find oil if they were inside of the structural trap but if they were outside of it, oil wasn’t found. Companies went broke and the
investment was gone. “That’s not the case in the Bakken. This is a resource play. We know where this oil is. It’s identified. We find oil and we drill. It’s not always economically in every spot and everybody’s technology is a little bit different but it’s essentially a mining operation or a harvesting operation, and with technology we’re continuing to get better and better and better,” Ness said. With the efficiencies and what has been learned in the development of the Bakken over the past several years, Ness said he doesn’t think 186 drilling rigs – the number of rigs drilling in December 2014 – are needed again for the Bakken. As of March 31, the North Dakota Oil and Gas Division reported 29 rigs were actively drilling in the Bakken in North Dakota. Ness tells those he gives presentations – to be bullish on their investments, think big, think long term, get out ahead of the game and do what they have to do to get through these valleys.
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LEFT: Construction started on an oil storage tank at Enbridgeʼs Beaver Lodge Station near Tioga last year as part of the Sandpiper project.
BELOW: This photo from Enbridge shows initial work for tank construction at Berthold last year as part of the Sandpiper project.
Submitted Photos
Environmental review slows Sandpiper project By JILL SCHRAMM
Staff Writer jschramm@minotdailynews.com A pipeline company proposing a multi-state project to transport Bakken crude oil has conducted some preliminary construction in North Dakota while the project continues to work its way through regulatory processes. The North Dakota Pipeline Co.’s Sandpiper Pipeline Project received permits for its route and corridor from the North Dakota Public Service Commission in June 2014. Enbridge Energy Partners and Williston Basin Pipe Line, an indirect subsidiary of Marathon Petroleum Corp., formed North Dakota Pipeline Co., whose assets are operated by Enbridge. “We will continue to work with local authorities on any permits that will be needed once we get closer to the pipeline construction,” Enbridge spokeswoman Katie Haarsager, Minot, stated in information provided about the project. “However, since that time we were able to start working on some tank construction at our Beaver Lodge, Stanley and Berthold Terminals as well as preparing pipe yards and getting equipment ready for work along the route. Over the coming summer we will plan on completing tank construction for Sandpiper and continuing routine maintenance on our existing pipelines. We will also be working on a few integrity digs along our existing pipeline. Integrity digs are part of our preventative maintenance program to ensure we are operating safely and efficiently.” The Sandpiper Pipeline Project involves construction of a 616-mile crude oil pipeline from Enbridge’s Beaver Lodge Station, near Tioga, to Enbridge’s Superior Terminal, near Superior, Wis., along with associated pumping facilities. A 24-inch in diameter pipeline would run from Tioga to Enbridge’s Clearbrook Terminal, near Clearbrook, Minn. A 30inch in diameter pipeline would run from Clearbrook to Superior. Environmentalists have fought the project. The Minnesota Public Utilities Commission granted a certificate of need to Sandpiper in June 2015, but a Minnesota appeals court determined the project needed an Environmental Impact Statement. The Minnesota Supreme Court
We will continue to work with local authorities on any permits that will be needed once we get closer to the pipeline construction. —Katie Haarsager Enbridge spokeswoman
rejected a request from Enbridge and the MPUC for a review last December, requiring an EIS be completed. The MPUC ordered the EIS, holding off on further proceedings until the environmental document is done. In February, Enbridge asked the MPUC to allow the regulatory review to proceed concurrently with the EIS process. In Wisconsin, the Public Service Commission has been awaiting the issuance of a Draft EIS prior to conducting a public hearing. Enbridge Energy Partners reported in February that it expects to push back the start-up dates for Sandpiper from 2017 to early 2019 because of the need for the environmental review in Minnesota. Costs also are expected to rise somewhat from the initially projected $2.6 billion. The Sandpiper is subject to a variety of regulatory actions in addition to the state utilities commissions. The Office of Pipeline Safety within the U.S. Department of Transportation’s Pipeline and Hazardous Materials Safety Administration regulates the design, construction and operation of the pipeline. The U.S. Army Corps of Engineers permits water body and wetland crossings. The U.S. Fish and Wildlife Service oversees protected species. State historic preservation offices oversee protection of cultural and historical resources, while other environmental agencies grant stream crossing and state land crossing licenses.
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Energy
Saturday, April 16, 2016
Saturday, April 16, 2016
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KEEPING THE LIGHTS ON Minot Daily News PROGRESS
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Saturday, April 16, 2016
Verendrye, Basin Electric bring power to you By ELOISE OGDEN
Regional Editor • eogden@minotdailynews.com
Bruce Carlson has been working for electric co-ops for more than 40 years and says he has never seen a bigger challenge to the power supply than what they’re looking at right now. Carlson, general manager of Verendrye Electric Cooperative with offices in Velva and Minot, is referring to the U.S. Environmental Protection Agency’s Clean Power Plan and the federal government’s war on coal. He said Verendrye got started in the little town east of Velva called Verendrye. “That’s where it all got started in 1939,” he told members of the Minot Area Chamber of Commerce’s Energy Committee at a recent meeting, explaining the background of Verendrye and Basin Electric Power Cooperative. “It grew from the humble beginning of a few accounts along the Souris River to the third largest cooperative in the state,” Carlson said of Verendrye. He said Verendrye serves parts of seven counties. “We’re member owned, member controlled,” he said. “Every year we have three directors up for election. These are my bosses. The director districts are broken into three. “It’s a good system. We’re proud of it and it works very, very well and thanks to you who are members and supporting the co-op,” Carlson said. “What is unique is that we own our own power supply system. That’s all the way from the meter on your home or on your business back through the distribution which is what we run and then through the transmission. If you don’t have the transmission, you don’t have the backbone – the systems going to fail. The generation is Basin Electric,” Carlson said. He said Basin Electric is the generating cooperative side of the equation. “Most important is the member owners. If you buy power from Verendrye Electric, that’s truly how the cooperative is operated. It all starts with the guy on the end of the line and he’s got responsibility for this all the way back through the generator, coal mine or wind farm south of Minot as an example,” he said. “Sixteen-thousand fivehundred meters, 4,300 miles of line,” Carlson said of Verendrye’s business. He said he’s extremely proud of and was part of getting the first co-op owned wind farm in the United States right south of Minot. “You might say what is the significance of that because DGC – Dakota Gasification Company – is a for-profit subsidiary of Basin
Electric?” Carlson asked. And he replied, “We were able to take advantage of production tax credits and achieve that wind farm south of town. It’s a big deal for us. I’m proud of that,” he said.
Other programs Verendrye has a solar program, Carlson said. “We’ve got 250 solar water pumping systems that we lease, we guarantee that will work. We have solar panels we haul around in our little yellow trucks the same way that we haul transformers. We lead the nation in solar water pumping so nobody in this room can say we’re opposed to renewables or that we have a biased view of coal. We are of the opinion we need all of the above. He said they had been buying power from MontanaDakota Utilities but one of the reasons they quit buying from that company was the price increased. “The reality is we needed more capacity and we could control the price better if we built our own generation. That’s when we formed Basin Electric,” Carlson said. He said Verendrye was one of the charter members to form Basin. “It happened to get started here locally so therefore the headquarters happens to be in Bismarck,” Carlson said. “This cooperative covers the biggest landmass of any other generation cooperative in the country. (It’s a) very well respected, very, very good cooperative, well managed, well run, 138-member systems like Verendrye own Basin Electric. If you own us, you also own Basin,” Carlson said. He explained how Verendrye fits into the picture. He said Verendrye’s service area, an area including Minot Air Force Base, needs 120 megawatts in order to keep the lights on during its peak periods. “If it’s the hottest day of the year or the coldest day of the year, you got to have that capacity steady. The minute you flip that light switch there better be a generator already turning... and able to supply that,” Carlson said. He said 120 megawatts is 120,000 kilowatts or 120 million watts or 1.2 million light bulbs. That, he said, gives people a feel of Verendrye system alone. “Now multiply that times 138 other systems and you know what kind of scope we’re looking at, at Basin level from a generation standpoint,” he said. He said some power comes from the Western Area Power Administration which is the Garrison Dam
Submitted Photos
Verendrye Electric Cooperative linemen are shown working in the Makoti area. The cooperative, the third largest in North Dakota, serves several counties. along with several other generating turbines on the Missouri River. “Regional suppliers together give us the blend of energy that we need to keep the lights on,” Carlson said, adding, “The bigger you are in this economy, the better off you are from a cost per kilowatt hour.” “We’re very, very excited about Basin Electric and the fact that they’re huge means we’ve got a northern-southern diversity. In the wintertime we’re peaking up here because of the cold weather, then vice versa we can use that generation down south in Nebraska when you have your hottest day of the year when they’re peaking with all of their irrigation and all of their air conditioning. So it’s a great system that we’re very proud of,” Carlson said. He said Basin Electric has a generating capacity of 5,744 megawatts, and it is made up of nuclear, coal, oil and diesel, natural gas and renewables. See POWER — Page 9
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‘The War on Coal’
Eloise Ogden/MDN
Basin Electric Power Cooperativeʼs Leland Olds Station near Stanton is a lignite-based electric generating station and is the cooperativeʼs first power plant. The Obama administration through the U.S. Environmental Protection Agency has declared a war on coal by wanting existing power plants to drastically cut carbon dioxide emissions.
A
huge problem looms over power plants in the nation – the U.S. Environmental Protection Agency’s Clean Power Plan, President Obama’s flagship policy to drastically reduce carbon dioxide emissions at existing power plants’ smokestacks. However, the industry has had a reprieve – at least for a time – since the U.S. Supreme Court in February halted the ruling for now. Bruce Carlgeneral son, of manager Verendrye Electric Cooperative, Bruce with offices in Carlson Velva and Minot, told members of the Minot Area Chamber of Commerce’s Energy Committee that Sen. Heidi Heitkamp, D-ND, brought to North Dakota the head of the EPA, Gina McCarthy, who toured the Dakota Gasification Plant in Beulah, a forprofit subsidiary of Basin Electric Power Cooperative in Bismarck. McCarthy visited the state in February 2014. “She (McCarthy) said there’s not a war on coal and don’t worry about it, we’re going to work this out. We’re going to give you time,” he told the group. “Guess what? It just absolutely has not happened, so we’ve got a huge problem.” “Where all this is coming from is the Clean Air Act of 1990. In other words, the U.S. Supreme Court decided that carbon dioxide is a pollutant and through the Clean Air Act of 1990 greenhouse gases and specifically carbon dioxide were declared a pollutant,” Carlson said. “Now what the EPA is doing is following up on that direction from the Supreme Court and EPA created the Clean Power Plan,” he said. He said the frustration is the numbers for reducing carbon dioxide emissions have changed and
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He said there are a lot of renewables in the system, but in his presentation he dwelled on coal. “There’s not as many generating facilities that are fired by coal but they are by far the largest and by far the biggest percentage of our generation,” he said, noting that everything in that business is tied to megawatts. “Fifty-five percent of our power supply from Basin Electric is from coal. We cannot keep the lights on without that 55 percent. That’s compounded with the fact that we’re growing because of the Bakken and just right around Minot we still have growth. In addition to the problem with the U.S. Environmental Protection Agency’s Clean Power Plan to drastically cut carbon dioxide emissions, a goal that the industry says is completely unrealistic. “On top of that
Clean Power Plan looms over power plants By ELOISE OGDEN
Regional Editor • eogden@minotdailynews.com not just a little bit. “They’ve changed huge,” he said. “When the Federal Register came out initially with the Clean Power Plan we were looking at 11 percent reduction for North Dakota. We thought ‘we can do that.’ We’ve got enough farmers that will let us keep putting up wind farms. We can somehow make 11 percent work,” Carlson said. But when the Clean Power Plan rule was adopted, he said North Dakota’s percentage to cut CO2 emissions jumped from 11 percent to 45 percent. “In other words, you boys in North Dakota got to reduce your CO2 emissions by 45 percent by the year 2030, and we’ll give you until 2022 to have that compliance met by 75 percent. So 75 percent of the 45 percent has to be done in six years. This is 2016 – go figure,” he said. Carlson said it takes a long time to build a wind farm, noting it wasn’t months but about three years be-
we still have to meet growth,” Carlson said. He said 17.5 percent of the power supply from Basin Electric is renewable. “That’s an extremely good number. We’re extremely proud of that and the number’s going up. Bottom line – you need something more than wind in order to keep the lights on,” he said. He said the capacity factor south of town is excellent at 45 to 48 percent capacity factor. “For some reason, you people want your lights on all the time,” he added. He said at least 52 percent, or maybe 55 percent of the time there needs to be a backup to that wind. “Because when the wind doesn’t blow, you still have to have that spinning reserve out there to crank up,” he said. Carlson said coal runs all the time but wind goes up and down. “What do you do to match the wind? You chase it with natural gas. Thank
fore they even were close to pouring the concrete for the wind farm south of Minot. “Nothing happens fast in our business,” he said. Carlson said Wyoming jumped from 19 to 44 percent, Iowa from 16 to 42 percent and Montana from 21 to 47 percent mandated reductions in carbon dioxide emissions as part of the Clean Power Plan. “We’ve got two options to comply. You can either go with the mass-based compliance option or a rate-based compliance option,” he said. But he said there’s a problem. “When you talk about mass that means how many tons. In other words, Verendrye and all the rest of the North Dakota boys you decide how many tons of CO2 you’re going to reduce and then you’re going to leave it fixed at that amount. It’s OK for states that have no growth. A mass-based calculation just isn’t going to work when you’re in a state that’s growing. So then you got to go to rate-based calculation which
goodness for natural gas because that’s the only way we can keep the lights on is to use a natural gas backup to the wind,” Carlson said. He said there are natural gas pipelines throughout the state. He said a major one is Alliance pipeline and there are natural gas compressors that keep pushing the natural gas. What Basin (Electric) has done is captured the exhaust coming off natural gas turbines and then, in turn, use that to generate electricity. The closest one he said he knows of is at St. Anthony. “There’s a number of them that work out very, very well, and it’s a partnership with our friends on the natural gas side,” Carlson said. “But here’s the kicker,” Carlson told the group. “Our load growth is down substantially and I mean like half of what we were projecting earlier when the Bakken was rockin’. Things have slowed down. We’re down to 800 megawatts of growth.”
means how much CO2 are you going to emit per megawatt hour of electrical generation?” Carlson said. Carlson said the North Dakota Health Department has been “awesome” in trying to help figure out all of this. “Because of our growth, this is the area that we’re focusing in and trying to come up with a stateimplementation plan,” he said. “If we don’t come up with a state implementation plan, then we’re going to have a FIT,” Carlson said. FIT is the Federal Implementation Plan. “We are trying desperately to put together a state implementation plan right now as we speak,” he added. Carlson said even the EPA admits that no coal or gas unit can achieve the final performance standards for existing sources. “If you think you are going to grow, then you have to meet the requirements for the new generation standards – to fix what you’ve got they’re even more restrictive. In
But he said there’s a need for another Antelope Valley coal-fired station just to meet load growth through 2020 because there’s still a tremendous amount of energy needed in the Bakken. “Every single one of those gallons of oil coming out of the ground take a lot of suction, a lot of power. That’s all electrically powered – all of your gas plants. We’re talking 20 megawatts of electric load to operate a gas plant and some are even gearing up to 40 megawatts. There’s huge electrical requirements to run a gas plant,” he said. Despite the drop in oil prices, electric officials say there is still a great need for electricity. Carlson said an electric cooperative official in the Watford City area says nothing is slowing down in that area. He (Carlson) said there are also so many spinoff activities in the oil and gas industry. “The focus now is in the Watford City area with tremendous growth even at
other words, it’s obvious to us there’s a war on coal,” Carlson said. “We can’t meet the standards for new fired generation, it’s even more impossible for us to meet the standards on existing generation.” “What the solution? You shut it down,” he said, but pointed out, “Remember 55 percent of your power from Basin Electric is coming from coal.” One of Supreme Court Justice Antonin Scalia’s last actions before he died this year was approving the motion to stay on the Clean Power Plan ruling. “What does stay mean? Stay is saying this thing is out of control. We need help from a legal standpoint to put the brakes on this thing,” Carlson said. He said Basin Electric filed a motion for a stay with the D.C. Circuit of Appeals. That court, with a unanimous vote, decided the EPA rule would remain. The ruling was appealed by Basin Electric Cooperative along with other power suppliers and states versus the EPA, to the U.S. Supreme Court, asking that body to reconsider the denial of the stay. “The good news is the U.S. Supreme Court said – first time in the history ever – your stay is granted,” Carlson said. He said before the district court even heard the case whether the Clean Power Plan is illegal, the Supreme Court approved the stay. “The stay is in place (and) we are having the case heard by the U.S. District Court. Whatever happens there it’s going to be appealed to the U.S. Supreme Court. In the meantime, we’ve got some breathing room here,” Carlson said. He said they hope they have a couple years of breathing room. “Unless the stay is overturned by the Supreme Court, the Clean Power Plan is on hold,” he said. “No matter what we do, we can’t comply so we need time,” Carlson said. “We’re very, very thankful for the stay.”
these low prices,” Carlson said. “You go west of Watford City you’re going to see lots and lots of natural gas electric-fired generation. In addition to that, you got to have transmission. If you don’t have the backbone, the generation is absolutely worthless.” He said there’s hundreds of millions of dollars of investments just to keep the
lights on, including $400 million in investments in the Leland-Olds coal-fired power plant at Stanton. “This is not an easy industry. It’s very, very complicated and people that think you can just put a wind farm anywhere and you’re going to solve the problems in Chicago, they don’t understand it,” Carlson said.
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Energy
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Geo
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geothermal energy. At the top of the web page, click on the service link and scroll down to tax exemptions, there you will find answers about Ward County tax exemption programs. Another internet resource is www.dsireusa.org/. This website provides a data base with state incentives for renewable energy. After you arrive to the web page, you will see a map of the United States, click on North Dakota and you will find the latest grants, loans, and tax credits provided for investing in renewable energy. At Verendrye, members can receive rebates for purchasing geothermal energy. “We provide rebates to our members because it could save us energy,” Rafferty said. “If we have a lower peak energy usage across our whole system, we get a rebate from our power supplier, because that’s less power that we need from them.” For anyone curious about geothermal installation, Verendrye has advisers to answer questions and offer assistance. “We’re here to save our members money and do what’s best for them,” Rafferty said. “If installing geothermal air or heat pumps will save our members money, we’re glad to help and ready to offer advice.” The advisers at Verendrye are highly qualified energy experts, who can provide insight regarding the kind of system you need, the appropriate size and the price that fits your budget. However, advice is the extent in which Verendrye can help, as they do not perform the actual installations. Cool Fish Refrigerating, Heating and Air is one of many plumbing companies in Minot capable of installing geothermal pumps. With the cost of living on the rise, energy conservation not only protects the environment, it also saves a few dollars. “According to the U.S. Department of Energy, you can reduce your heating and cooling by as much as 40 percent,” Rafferty said. “There is an initial investment that has to be made, but in the long run you’re going to save energy.” On average, the upfront cost can range between $20,000 and $26,000. Zerr, has noticed slight hesitation from homeowners to invest in geothermal energy. “The initial high investment cost of geothermal energy is a factor,” Zerr said. “The short-term expense may be a
LEFT: North Dakota State University Climatologist Dr. F Adnand Akyuz, explains climate change to young students.
Submitted Photo
ABOVE: Image of geothermal distribution system courtesy of Verendrye Electric Cooperative. Submitted Graphic
reason why we’re not seeing a lot of new geothermal installations in residential areas.” Another cause for concern might be the duration in which homeowners reside in the same place. “If you’re not planning on being in the home that long, people have a hard time justifying that capital expense,” Webster said. “For this reason, I think that’s why it’s been a little difficult for this to catch on. This is a lot more money upfront.” Webster did highlight an upside to making the expensive investment. “Even if you’re not going to be in the home that long, investing in geothermal energy does increase the value of the home,” Webster said. “If someone else comes along to purchase it, and the system is already installed, people will be willing to pay a little more for the home.” Offsetting the relatively high investment of geothermal energy is the fairly affordable price of natural gas. “The price of natural gas has been very reasonable,” Zerr said. “We expect natural gas prices to stay reasonable for quite some time.” It may sound odd, but to save money, sometimes you have to spend money. For example, every day someone picks between the compact fluorescent light bulb and the incandescent light bulb. Compact fluorescent light bulbs require less energy, last significantly longer, and within six months can provides noticeable savings com-
pared to the incandescent light bulb. However, it’s common for some consumers to choose an incandescent light bulb because the upfront cost is. When considering what’s best for the future, it’s paramount to look ahead. Throughout his career, Gosnold has actively examined heat flow, alternative energy sources and climate change. The oil crisis during the 1970s propelled Gosnold to research alternative forms of energy. “When I first started doing my research, the world experienced its first oil crisis with OPEC in the mid- to late 1970s,” Gosnold said. “I began looking at the situation, and learned a lot about the world’s energy and where its energy may exist. I examined the quantities, possible projections, and future production of alternative sources. My research made me realize that we should be trying to develop alternative sources of energy.” Gosnold acknowledges that geothermal energy may be a suitable option for alternative energy, however he shares the challenges that come along with obtaining it. “Geothermal energy could be one of the energy sources for the future,” Gosnold said. “The challenge is getting access to enough heat. There is a lot of significant drilling, which costs a lot of money.” Although geothermal energy can be both challenging and costly to extract, climate change is slowly making this energy source more appealing. Recently, Gosnold re-
viewed findings that suggested a need to consider alternate sources of energy. “A couple of recent studies have come back indicating that things are a lot more serious than we thought two or three years ago,” Gosnold said. “The oceans are warming, the ice is melting faster, and we’re producing more CO2 at a rate 100 times faster than we did 63 years ago. So, we really need to consider an alternative form of energy that does not involve burning a lot of fossil fuels.” During the latter part of the 1980s, Gosnold shifted some of his attention toward climate change. “Since the late 1980s, I’ve been doing a research on climate change,” Gosnold said. “North Dakota has moved up two degrees Celsius within the last 60 years. That’s about the average throughout the state. As far as noticing something personally, I’m a cross country skier and I can tell you that we haven’t had enough snow to ski on in the Grand Forks area for three years. Last season, it was a little better than the past but it got totally wiped out by a rare phenomena. We almost never get liquid precipitation during the wintertime, and last year we had rain. This froze the snow which was useless for cross country skiing.” F. Adnan Akyuz is the North Dakota State University climatologist, and relays Gosnold’s observation of North Dakota’s temperature change. After proposing a question to his class about recent changes in the climate, Akyuz assessed the responses of his
students and came to the following conclusion. “Almost everyone recognizes that the climate has been changing,” Akyuz said. “They also noticed the change in the wintertime. North Dakota is a state where climate change is the most prevalent. If you look at the temperature increase in the last 125 years, there is a trend taking place and it’s an upward trend in which on average the temperature is increasing 0.25 Fahrenheit per decade. If I multiply the trend by 10, on average that would be a 2.5 degree increase per century. This allows me to say that on average, our temperatures in North Dakota are 2.5 degrees Fahrenheit warmer than they were about 100 years ago.” Since there are 10 years in a decade, Akyuz multiplied climate warming and cooling trends by 10, to gain the average century value. According to www.currentresults.com/Weather-Extremes/US/driest-states.php, North Dakota has the least amount of precipitation in the winter time in the United States. Warmer temperatures in the winter time, are creating precipitation in places that rarely see a drop of rain. “I spoke to another climatologist about Grand Forks receiving rain in January,” Gosnold said. “I looked through the records and I have never seen any record of it raining in Grand Forks during the month of January. The climatologist confirmed what I observed.”
It’s no secret that 2016 has provided North Dakota with unusually warm winter conditions. “It’s not the summertime temperature increase but the winter time increase,” Akyuz said. “For the wintertime increase, North Dakota holds the United States record. On average, our wintertime increase is 0.5 degrees Fahrenheit per decade. If we multiply by 10, that will be a 5.0 degree Fahrenheit increase per century, which means on average our wintertime temperatures are 0.5 degrees Fahrenheit warmer than they were 100 years ago.” Times are changing in North Dakota, from the warmer winters to the choices of energy sources. It could be argued that dependency and expenditure of fossil fuels are heating the earth. One could suggest that geothermal energy is the better source of energy that can possibly save long term spending and rescue our planet. Opposition could state that it’s better to rely on fossil fuels and natural gas because they are more affordable than geothermal energy. And, reliance fossil fuel and natural gas will remain steady long before geothermal energy becomes the world’s primary source of power. “For one thing, virtually everything we have is transported by cars, trucks, or rails,” Gosnold said. “Each of those require fossil fuels. So, we’re going to need that for a long time.”
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Energy
Saturday, April 16, 2016