Today’s Ask Your Government

Dear Teri,

Please publish details of fracking, especially chemicals used. Dr. Winn Parker (Parkers Pathways) on republicbroadcasting.org states it takes 5 million gallons of water for one fracking! The upper layer of stratum is disturbed before reaching the desired depth. Water is more necessary than oil ($). Thank you.

Ardis Johnson 

Jamestown

Thanks for writing! I talked to Department of Mineral Resources Director Lynn Helms, who said 5 million gallons of water is the high end. The average is 4 million gallons for each well, he said.

Forum Communications has put together a five-part series about water, which includes taking a look at water supply in the state. The series began this weekend and runs every weekend through Feb. 25.

As for your fracking question, it is now voluntary for North Dakota companies to report details about fracking, Helms said. However, that will soon change.

The state Industrial Commission approved rule changes this past week that will make it mandatory for companies to submit fracking reports. April 1 is the earliest the rules will take effect, Helms said.

The information will be available at fracfocus.org, which already has some North Dakota information voluntarily submitted by companies. The rule will require data to appear on the website within 60 days of pumping, Helms said.

Here’s how to find that information:

After going to fracfocus.org, click on the map that has “Find a Well” on it. (Or, just click here.) From there, select North Dakota from the drop-down box. You can select a county, well and operator, if you want.

After you click search, you’ll see North Dakota light up on the map below. Click on the map until you see bright green light bulb shapes. You can click on each of those bulbs and get the option to open a PDF report with specific information.

Whether or not you’ll understand the reports, however, is another matter.

“If you’re not a chemist or a chemical engineer, the data that’s there you’ll struggle with a little bit because it’s chemical names,” Helms said.

Still, the reports are as easy to understand as they can be, he said, and there’s enough there that people can copy and paste information into a search engine to find out more about ingredients.

“It’s something that the environmental groups and the citizens have really pushed for,” he said of putting reports on fracfocus.org. “This really is about the principle of transparency in this process. This is really not because we suspect that, you know, improper substances have been used.”

The Industrial Commission – which includes the governor – has said the typical North Dakota Bakken frac contains 0.088 percent petroleum distillates.

FracFocus is managed by the Ground Water Protection Council and Interstate Oil and Gas Compact Commission. It includes information on hydraulic fracturing, chemicals used and groundwater protection.

Do you have a question for a North Dakota state government official or agency? Send us your question, and we’ll do our best to find an answer.

E-mail politics@wday.com (Subject: Ask your government).

You may also write to Teri Finneman c/o Forum Communications, Press Room, State Capitol, Bismarck, ND 58505.

Please include your name, town and a phone number to reach you for verification.

New gas processing plant planned near Ross

BISMARCK— A plant capable of processing up to 75 million cubic feet of natural gas per day will be developed near Ross, N.D.

Houston-based Plains All American Pipeline announced the project Friday. The plant will be operated by the company’s subsidiary, Plains Gas Solutions, and is expected to be completed in spring 2013.

How many jobs the plant will create was not immediately available.

Gov. Jack Dalrymple said he applauds the development of the plant.

“We are making remarkable progress in the capturing and processing of North Dakota’s natural gas,” Dalrymple said in a statement. “We will continue working with the private sector to further increase the state’s processing capacity.”

Between January and November 2011, North Dakota’s production of natural gas increased 53 percent to a record 521 million cubic feet per day, the governor’s office said in a news release. By the end of this year, the state’s capacity to process natural gas is expected to reach 1.1 billion cubic feet per day.

Oil Patch testimony to legislators

BISMARCK–As I reported in today’s papers, legislators spent Thursday listening to hours of testimony from western North Dakota officials regarding the challenges and the need for more money due to oil impacts.

What made it into the paper was only a fraction of the testimony presented due to space reasons.

For those interested, I thought I would share copies of testimony and handouts that I received electronically for you to read more about what legislators were told.

Here they are, in no particular order:

 Dunn County

Williston

 Dickinson Public Schools

Killdeer Public Schools

 McKenzie County Public Schools

Mountrail County

Watford City

Williams County (lots of photos in this one)

Williston Public Schools

 

Legislators hear needs, frustrations from Oil Patch

BISMARCK – There is an “incredible amount” of anger and frustration in Williams County over how the oil boom has affected the way of life for local residents, a county commissioner said Thursday.

Officials from the oil and gas counties appeared one after another to talk to the North Dakota Legislature’s interim energy committee about the challenges they face and how much money they need to address oil impacts.

Housing, crime, lack of employees, strained budgets, stressed emergency services, traffic, day care shortages and the need for more schools were among the topics brought up.

Williams County Commissioner Dan Kalil received applause from the audience after his testimony about the toll the boom has taken on Williston. The area is short on patience, jail space, groceries and fuel; and long on sewage, garbage, anger and frustration, he said.

“Our quality of life is gone. It is absolutely gone,” he said. “My community is gone, and I’m heartbroken. I never wanted to live anyplace but Williston, North Dakota, and now I don’t know what I’m going to do.”

Kalil said his goal as a local official was to leave his county better than he found it, but now he doesn’t know if that’s possible. All of the challenges are a symptom of what the problem is: too much too fast, Kalil said.

“This level of activity has only led to unwarranted greed and unbelievable pressure on everyone,” he said. “We cannot sustain this. Somebody has to be brave enough to stand up and say, ‘Too much, too fast.’ ”

The state has “a moral obligation” as a stakeholder to do everything it can to help, he said.

“We cannot destroy North Dakota to fill the coffers of Bismarck. We cannot do this,” Kalil said, referring to the oil and gas tax revenue the state receives. “We went from oil exploration to oil exploitation.”

The sentiment in Williams County is that the third- and fourth-generation culture is being traded for a transient work force and “the mug shots of two undesirable people from Colorado,” he said. He was referring to the men heading to the Oil Patch who are now suspected of kidnapping a Montana teacher who is presumed dead.

Legislators also heard about the strain on volunteer ambulance departments overwhelmed with calls.

Volunteers are stressed and hard to find due to the increased time commitments, lack of funding, and need for more training and equipment, said Cody Friesz, administrator of the North Dakota EMS Association.

The calls ambulance personnel respond to are also more gruesome than they used to be, which stresses volunteers, said Donna Scott, a Dunn County commissioner.

School officials from throughout western North Dakota discussed their climbing enrollments, the need for more school buildings and the need for more impact funding from the state.

The distributions to schools in the oil counties are not answering the rapid-growth issues, said Gary Wilz, superintendent of Killdeer Public Schools.

Housing is in such demand, said Shawn Kessel, Dickinson’s city administrator, that his uncle, who owns a four-bedroom home in Dickinson, sleeps in one bedroom and rents out the other three at $800 a month each.

City sanitation truck drivers have been recruited while on their garbage routes because oil companies prize employees who are licensed to drive commercial trucks, Kessel said.

Although the census counted Dickinson’s population at about 18,000, Kessel believes the city is serving about 22,000 people. North Dakota State University has estimated the city’s population will grow to 35,000 people within four years, Kessel said.

“We’re going to have to basically pick up the city of Mandan and drop it into the city of Dickinson, and do it in four to five years,” he said. “That means adding all the roads, all the fire, all the police, and everything else.”

Brad Bekkedahl, a Williston city commissioner, said although his city’s population is growing rapidly, almost 1,000 longtime residents have left in the last two years, fed up with the city’s newly acquired crowding and traffic problems.

“Those are the people that built our churches, went to our PTAs. They built our community. It’s tough to lose those people,” Bekkedahl said. “We’re getting more back in, but we’re losing our core.”

Energy Committee Chairman Sen. Rich Wardner, R-Dickinson, said Thursday’s testimony indicated that legislators need to look at revising the gross production tax formula and send more money to political subdivisions. Legislators also need to look at more money for roads, he said.

There’s no question help is needed to address the impacts, Wardner said. While there are those who want to spend the state’s oil revenue on assorted causes, the state needs to take care of the oil counties, he said.

“We may have a lot of money, but we have a lot of needs,” he said. “They’re the ones that are taking the hit for the whole state.”

The Associated Press contributed to this report.

The oil boom’s impact on schools

BISMARCK–As a Class B girl, I knew I wanted to stop at a small North Dakota school during my oil tour earlier this month to see the boom’s impact on K-12 education.

I settled on Stanley, a town that I’d heard much about but had never made it to–besides driving by—in my 30 years.

I was impressed with the friendliness of the staff there, and the mix of excitement yet caution in the community was interesting. They know they need to expand the K-12 buildings due to climbing student enrollment, but they also realize the economy could change and put a quick end to the influx of students.

You can read my full story here.

The impact of the boom on schools will come up again later this week during a legislative meeting. The Energy Development and Transmission Committee meets Thursday in Bismarck.

Here is the list of western North Dakota schools scheduled to appear before legislators to talk about the impact of oil production on K-12 education:

Steve Holen – Superintendent, McKenzie County Public School District

Gary Wilz – Superintendent, Killdeer Public School District

Viola LaFontaine – Superintendent, Williston Public School District

Douglas Sullivan – Superintendent, Dickinson Public School District

Kent Hjelmstad – Superintendent, Stanley Public School District

Today’s Ask Your Government

Dear Teri,

Do you know if any of the oil companies that are proposing spending $3 billion collecting flare gas (are) considering converting it to anhydrous ammonia that is (in) great demand by farmers in the state? It seems like a natural fit if it could be produced in the same area as it is used.

Leslie Roach

Wheatland

 

Thanks for writing! I talked to Ron Ness, president of the North Dakota Petroleum Council. He said a number of companies in the anhydrous ammonia business have been here and have begun exploring those opportunities.

“More and more people are looking at the large volume of our (liquid rich) natural gas,” he said. “I think you’ll see more and more business development opportunities.”

Do you have a question for a North Dakota state government official or agency? Send us your question, and we’ll do our best to find an answer.

E-mail politics@wday.com (Subject: Ask your government).

You may also write to Teri Finneman c/o Forum Communications, Press Room, State Capitol, Bismarck, ND 58505.

Please include your name, town and a phone number to reach you for verification.

Today’s Ask Your Government

Dear Teri,

How many oil and gas wells does the state own outright, and where is the publication of such posted on a monthly basis for oil and quarterly for gas?

What does the average royalty per well amount to on a percent basis of state owned wells? Is it 20 percent, 25 percent or 30 percent? Where is this accounted to us taxpaying citizens? Is it available on a website?

James Flournoy

Dickinson

 

Thanks for writing! I contacted North Dakota Department of Trust Lands Commissioner Lance Gaebe. This is his response:

“The state does not own or participate in any oil or gas wells “outright.” Instead, state-owned minerals are leased to oil companies, which own or operate the wells to extract oil and gas. The operator of a well pays a royalty based on the production and sale of the oil and gas.

“It is important to note that royalties are not a tax, but are compensation received by a mineral owner for the extraction of hydrocarbons from a property.

“If a well is drilled and starts to produce oil and gas, the mineral owner will receive a monthly payment, or royalty, based on the amount of oil/gas produced, the amount of acreage owned within the spacing unit for the well and the royalty rate found in the lease.

“The Department of Trust Lands’ managed trust funds have a royalty interest in approximately 1,700 wells out of a total of 6,200 wells drilled in the state. The standard royalty rate for Department of Trust Lands’ leases is either 1/8 or 1/6 of the value of the production, depending upon when the mineral acres were leased.

“The state’s interest in each well varies substantially, depending on the number of net mineral acres the trusts own within a well’s spacing unit.

“As royalty payments are received by the Department of Trust Lands, they are entered into a computer system that identifies the payments by well or property and by trust fund. Currently, there is no place on the Internet where this information is posted or published in “real-time” for a specific location or well.

“However, the aggregated royalty information for each quarter and the biennium is available on the website of the Department of Trust Lands at www.land.nd.gov. Specific royalty collection by well or location could be available upon request.

“Although there are some mineral acres managed by other state agencies – including the Game and Fish Department, the Parks and Recreation Department, the Department of Human Services and the Veterans’ Home – the majority of mineral acres owned by the ‘state’ are managed by the Department of Trust Lands under the direction of the Board of University and School Lands.

“The state and state trusts own more than 2.5 million mineral acres. The Common Schools Trust Fund and several other permanent trusts own 1.8 million of those acres as a result of the federal enabling act that allowed for the creation of the state of North Dakota.”

Do you have a question for a North Dakota state government official or agency? Send us your question, and we’ll do our best to find an answer.

E-mail politics@wday.com (Subject: Ask your government).

You may also write to Teri Finneman c/o Forum Communications, Press Room, State Capitol, Bismarck, ND 58505.

Please include your name, town and a phone number to reach you for verification.

Oil Patch job market impacts Williston college staffing

BISMARCK – The competitive job market in the Oil Patch has contributed to high staff turnover at Williston State College, with more than one-third of its faculty and staff hired in the past two years.

To help address the challenges of having less experienced employees, the college has partnered with Bismarck State College to create a mentoring program.

Several Williston State College administrative employees met this week with their counterparts in Bismarck to ask questions and learn best practices.

“The goal has basically been for us to collaborate,” said Marnie Piehl, a spokeswoman for Bismarck State College. “One of the ways that we can help is to share information and best practices with this team that is smart and good, but not as seasoned as we are.”

The partnership between the colleges began last month when Bismarck State College administrators visited Williston. The visit helped Bismarck leaders learn more about the growing needs of the oil and gas industry and about the college’s challenges

Williston State College has 108 full-time employees and four part-time employees, which includes faculty and staff, said Michelle Remus, the college’s human resources manager.

Forty of these employees were hired after Jan. 13, 2010.

For those who haven’t been to Williston, it’s hard to understand everything that’s going on there, said Kayla Retzer, marketing director for Williston State College.

With so many job openings and low unemployment, employees can walk out the door of their job and find another, she said.

“It’s not like it’s a war over employees. I definitely would not say that,” Retzer said. “But everyone is looking for someone that can help their company or better their company. … You want to hang on to the people that you have and are really good. That gets to be kind of hard in how competitive the market is there.”

Competing with private-sector salaries and the high cost of goods and housing are also challenges, said Retzer, who has worked at the college for 2½ years and lives on campus so she can afford housing.

The partnership between Williston and Bismarck isn’t the first time the state’s two-year schools have worked together, Retzer said. In the past, Williston has connected with Lake Region State College in Devils Lake and North Dakota State College of Science in Wahpeton to share perspectives, she said.

She appreciates Bismarck State College’s willingness to work with Williston to make the campus better.

“Together, we can collectively do things more efficiently,” she said. “We can learn from each other’s experiences. I think it really helps to further the education and the product that we’re putting out for all students in the North Dakota University System.”

State officials plan meetings to hear Oil Patch concerns

BISMARCK – State officials will begin a 14-city tour of the Oil Patch next week to provide updates on the state’s efforts to address oil impacts and to gather information on what more should be done to help.

The tour is tentatively slated to begin with meetings in Williston, Stanley and Tioga next Wednesday, followed by Crosby, Bowbells, Mohall, Bottineau and Minot later in the week.

The meetings are an opportunity to hear about the challenges at the local level, said Commerce Commissioner Al Anderson.

“We can’t assume that we know all of the issues and what’s going on with our growth challenges out west,” he said. “The easiest way for us to meet the needs of the local leadership is to get out there and get in on some of the conversations with them.”

Gov. Jack Dalrymple announced the tour last month while highlighting the $1.2 billion that North Dakota has committed to addressing the effect of oil and gas development in the western part of the state.

Anderson, who is less than a year into his new position running the state’s lead economic development agency, said the city visits will give him an opportunity to develop relationships with local leaders.

“The other part is just to understand what they’re going through, what things are working, what things aren’t working and get some ideas on what we can do about it,” he said.

Officials from the Land Department, Department of Transportation, Housing Finance Agency, State Water Commission and Highway Patrol are among those also planning to attend.

The meetings will be open to the public and are tentatively scheduled at early morning, noon and late afternoon times, with a final schedule coming out early next week.

Officials are trying to get to as many cities as possible in a short amount of time, with multiple city stops planned each day, Anderson said. Officials want to gather as much information as quickly as they can and move forward to address the challenges, he said.

“We’d like to get out in front of it and do as much as we can for the planning portion of it,” he said. “Instead of just being reactive, we’d like to try to develop some plans to be a bit more proactive.”

Energy Impact Office Director Lance Gaebe said members of the public are encouraged to attend the meetings even if it’s just for 20 minutes to ask a question or voice a specific concern.

“This is really an effort to talk to business owners on Main Street and people who are living in and amongst the activity beyond the local elected officials,” he said.

He expected the meetings to be “interactive listening sessions” as opposed to formal presentations from the state.

Dalrymple has already begun his separate tour of the oil cities, stopping in Williston, Tioga and Stanley on Tuesday to meet with local officials.

State officials are also planning visits to Bowman, Dickinson, Killdeer, New England, New Town and Watford City this month and additional cities could get added, Anderson said.

Today’s Ask Your Government

(Part 2 of the oil and gas tax formula)

Dear Teri,

I have some questions regarding the oil wells in North Dakota. What is the oil tax money collected from each well each month used for by the state? Is the natural gas wasted by flaring still running 20 percent to 30 percent, or is it being captured and piped to facilities?

Pat Larson

Jamestown

Readers, as you’ll recall, I explained part of this answer last week and will explain the rest this week due to how complicated the state’s oil tax formula is.

Oil companies pay the state a 6.5 percent extraction tax, as well as a 5 percent gross production tax. The state Tax Department expects to collect $2.1 billion in revenue from these taxes during the 2011-13 biennium. The money funnels through multiple funds that benefit the state and the oil counties in different ways.

Last week, I discussed the extraction tax. This week, I’ll explain the gross production tax. Like the extraction tax, 30 percent of gross production tax revenue goes into the voter-approved Legacy Fund. Money from this fund can’t be spent until 2017.

Here are other uses for the tax money:

E Oil-impacted cities. Through the state’s formula, the city of Dickinson receives $500,000 per year for being an oil-impacted city. This is based on having a certain percentage of employment in the energy industry. The city of Williston receives $1 million per year, and Minot now receives $500,000 per year.

E Oil and Gas Impact Fund. This fund now has a $100 million cap per biennium. Money goes to political subdivisions negatively affected by oil and gas activity. Most of the funding is used for infrastructure repair and improvement projects. Emergency services also qualify for funding.

E Cities, counties, schools and townships. The state has set up a percentage-based formula that determines how much money goes to the political subdivisions and how much goes to the state. Five counties reached the top tier of funding in fiscal year 2011: Dunn, Bowman, Mountrail, McKenzie and Williams. All received at least $6.75 million to get to that point. Tax revenue distributed to a county is split, with 45 percent for the county general fund, 35 percent for school districts and 20 percent to incorporated cities within the county. About $85.9 million was distributed to the oil-producing counties from July 1, 2010, to June 30, 2011, according to the state treasurer’s office.

The state’s share of gross production tax revenue flows through many of the same funds that receive extraction tax revenue: the general fund, property tax relief sustainability fund, strategic investment and improvements fund, and the disaster relief fund.

As far as flaring, your percentage is correct. A November document from the Industrial Commission said nearly 70 percent of natural gas production is captured. Here is more from that document:

“The Oil and Gas Research Council has devoted nearly $2 million dollars in grant money toward three research projects specifically aimed at utilizing natural gas in areas that might not otherwise be able to capture this energy. After additional outside grants and industry investment, the total costs of the projects themselves will total nearly $11.5 million dollars.”

“Industry also plans to invest over $3 billion in natural gas gathering and processing infrastructure in 2011, 2012 and 2013. As this investment is made and gas gathering infrastructure is built, policy can be expected to focus even more toward preventing waste in the natural gas arena.

“By year end 2012, natural gas processing capacity is expected to increase 389 percent from 2006. North Dakota’s natural gas processing plants will have the capacity to process 1 billion cubic feet of natural gas per day.”

Do you have a question for a North Dakota state government official or agency? Send us your question, and we’ll do our best to find an answer.

E-mail politics@wday.com (Subject: Ask your government).

You may also write to Teri Finneman c/o Forum Communications, Press Room, State Capitol, Bismarck, ND 58505.

Please include your name, town and a phone number to reach you for verification.