Murphy: Interim committee shares latest ND energy news
The Energy Development and Transmission Committee is the name of the interim (in between legislative sessions) committee on which I serve.
We meet more often than most (other legislative committees) every month, because energy is obviously a big deal for our state.
While much of this information can be gleaned from a careful look at our media, I thought I would give it to you straight from our meeting this week in Bismarck.
Probably all of you have heard that North Dakota has hit the million-barrel-of-oil-per-day mark, and we will progress from that as the years go by.
According to Niles Hushka, whereas a Bakken well cost about $12 million a few years ago, the average cost now is around $7 million. They are figuring it out.
Predictability (99 percent of wells are successful) has brought in a lot more capital in the past few months, including investment banks. While flaring remains an issue, our state is making modest improvements in that regard – down from 33 percent to around 29 percent or so, with predictions of 10 percent by 2020. Given the size of the play by then, the volume just burned off even if 90 percent is captured is a shame. Texas is at 1 percent.
To reduce the volatility of crude shipped by rail, the industry is increasing the amount of natural gas liquids stripped from the oil. The shipped product is also monitored much more closely.
This has increased the availability of propane, although storage is a significant problem for that industry. On a side note, along with a few other legislators, I have been meeting with industry as well as state agencies to see how we can incentivize the spread of natural gas to rural communities.
My hope is that if we cannot get natural gas to our Traill County and rural Grand Forks and Cass counties, we can at least free up enough propane in other rural areas of North Dakota so that a continuous supply along with the stable price can be had here. No one wants a repeat of last year’s propane debacle.
You should also know that new pipelines are reducing the amount shipped by rail – from 80 percent in 2013 to about 63 percent, according to the North Dakota Pipeline Authority.
It takes a while to build the gathering, transmission and distribution pipelines, but it is happening.
Our committee has also helped to get the filter sock problem in hand – the low radioactivity has allowed room to explore and find areas for safe deposit within our state boundaries, according to Dave Glatt of the North Dakota Health Department.
However, pipe scale and other industrial waste will necessitate some collection of higher radioactive materials from out of state, eventually.
The CEO of the oil services firm KLJ is studying the scope of the oil boom for our committee. KLJ representatives say that we can expect continued growth of permanent jobs in the Oil Patch depending on available housing.
One oil insider theorized that the formation under the Bakken (the Three Forks) could be much bigger than our current play, extending oil activity well beyond my lifetime and perhaps even our children’s.
The Upper Great Plains Transportation institute out of North Dakota State University also presented on road and bridge needs in both the east and west of North Dakota.
They emphasized that those of us in the agriculture industry need to keep loads within legal limits because of the inordinate damage done to roads by our bigger trucks – they also know too many of us ignore those limits.
Philip Murphy (D) has served as a District 20 senator since 2011. He is a resident of Portland, N.D.