Spotlight on North Dakota Energy 1

Spotlight on North Dakota Energy
1
Contents ➤
Generation
Coal.................................................................................4
Natural Gas.....................................................................5
Wind................................................................................6
Geothermal.....................................................................8
Hydro...............................................................................8
Recovered Energy..........................................................8
Solar................................................................................9
Transmission and Distribution.......................................10
Petroleum (Oil/Gas)
Production..................................................................... 11
Hydraulic Fracturing......................................................13
Refining.........................................................................14
Pipelines........................................................................15
Natural Gas Processing................................................16
Synthetic Natural Gas...................................................17
Biofuels
Ethanol..........................................................................18
Biomass/Biofuel............................................................19
Energy Efficiency.......................................................20
Taxes.................................................................................20
Education/Workforce...............................................21
Spotlight on North Dakota Energy
2
From the director ➤
Thank you for picking up the 2012 edition of the Great Plains Energy Corridor’s Spotlight on North Dakota Energy!
North Dakota continues to be a leader in a variety of energy sectors, moving the needle closer to our nation’s goal of
energy independence. In these pages, we highlight some of the progress and statistics from 2012 and look forward to
what might be coming in 2013.
The Great Plains Energy Corridor, housed at Bismarck State College’s National Energy Center of Excellence, works with
partners in government, education and the private sector to promote and enhance North Dakota’s energy development.
Together we provide information, education, outreach programs and special events on a wide range of energy topics. For
more detailed information about what you see in this booklet, visit our website at energynd.com.
I’d like to extend my sincere appreciation to the organizations that helped provide up-to-date information for this year’s
Spotlight on North Dakota Energy.
Emily McKay
Director, Great Plains Energy Corridor
A view from above ➤
North Dakota’s
rankings in the US
Total Energy Production........ 15th (2010)
Crude Oil Production.............. 2nd (2012)
Natural Gas Production..........18th (2011)
Coal Production........................9th (2011)
Installed Capacity – Wind.......11th (2012)
Total Electricity Generation.... 37th (2012)
Sources: U.S. Energy Information Administration,
American Wind Energy Association
Spotlight on North Dakota Energy
3
Generation ➤
COAL
n Great River Energy operates its patented “DryFining™” system at
Coal Creek Station to both dry and refine lignite coal for cleaner and
more efficient generation process.
n The North Dakota Industrial Commission oversees the Lignite Vision
21 program which issues grants to develop new lignite energy
conversion facilities. Current projects include Great Northern Power
Development and Allied Syngas studying a proposed lignite-tohydrogen-to-electricity project near South Heart, N.D., and a proposed
lignite-to-liquids plant near Underwood, N.D., by North American Coal
Corporation and Headwaters Resources.
Antelope Valley Station, near Beulah, N.D. Photo courtesy of Basin
Electric Power Cooperative.
n Approximately 30 million tons of lignite coal are mined each year in
North Dakota, and nearly 80 percent is used to generate electricity. Of
the remaining lignite coal, 13 percent is used to make synthetic natural
gas and 7 percent is used to produce fertilizer products.
n More than 75 percent of North Dakota's electricity is generated by coal
and the state is home to eight coal-based power plants.
n The North Dakota lignite industry employs 4,000 workers directly and
another 13,000 indirect workers.
n One megawatt hour is enough electricity to serve approximately 800
homes with an hour’s worth of power.
n In 2012 lignite industry companies contributed, through total annual
taxes (including sales, personal and corporate income taxes), an
estimated $100 million. Between 1975-2011 more than $1 billion in
tax revenue has gone to the state of North Dakota from the lignite
severance and coal conversion taxes.
n Great River Energy’s Spiritwood Station is a combined heat and power
plant. Construction of the facility was completed in 2011, and the plant
could begin producing power by 2015 when demand increases. The
plant will also produce steam that will be sold to multiple plants at the
Spiritwood Energy Park, near Jamestown, N.D.
n North Dakota’s power plants have invested around $1 billion in new
technology since 2006 to reduce emissions and increase efficiencies.
Plant
n North Dakota has the second-largest known reserves of lignite in
the world (behind only Australia) with an estimated 25 billion tons of
recoverable resources. It’s estimated that the state’s reserves will last
more than 800 years at the current rate of consumption.
Operating Company
Capacity by
megawatts (MW)
Coal Creek Station............................................. Great River Energy............................................................................... 1,141
Antelope Valley Station....................................... Basin Electric Power Cooperative........................................................ 900
Milton R. Young Station...................................... Minnkota Power Cooperative................................................................ 705
Leland Olds Station............................................ Basin Electric Power Cooperative........................................................ 669
Coyote Station.................................................... Otter Tail Power Company.................................................................... 427
Stanton Station*.................................................. Great River Energy............................................................................... 189
Heskett Station................................................... MDU Resources................................................................................... 100
Spiritwood Station**............................................ Great River Energy............................................................................... 99
*Stanton Station uses subbituminous coal from the Cloud Peak Energy Spring Creek Mine in Montana
**Not currently in operation
Spotlight on North Dakota Energy
4
Map courtesy of Lignite Energy Council.
RECLAMATION
n Mining companies typically have three years to reclaim mined land
by grading and respreading the soil and seeding the land. After that,
mines have to keep reclaimed land under performance bond for at
least ten years to prove reclaimed land produces crops or forages as
good or better than before mining.
n More than 26,000 acres of permitted land in the state have gone
through final bond release – the equivalent of around 40 square
miles.
n Between 1,500 and 2,000 acres of land in North Dakota are disturbed
by coal mining and reclaimed each year.
Sources: Lignite Energy Council, Great River Energy, Basin Electric Power
Cooperative, MDU Resources, Partners for Affordable Energy
n Mining companies spend an average of $30,000 to reclaim one acre
of land, but costs can be as high as $60,000 an acre.
NATURAL GAS
n Basin Electric Power Cooperative, a generation and transmission
cooperative headquartered in Bismarck, N.D., began construction
in 2012 on two natural gas-fired peaking stations in western
North Dakota. Both units will employ a General Electric LM 6000
combustion turbine generator and are planned to be operational in
2013.
• Pioneer Generation Station – located near Williston, N.D., and
Lonesome Creek Station – located near Watford City, N.D., will each
have capacity of 45 megawatts (MW). Basin Electric announced
plans to add two more 45 MW natural gas-fired turbines to each
facility. If approved by the Public Service Commission, the second
Spotlight on North Dakota Energy
phases would be operational in 2015, bringing the total of each
facility to 135 MW
n Montana-Dakota Utilities has planned an 88-MW natural gas-fired unit
that will be located next to its Heskett Station near Mandan, N.D. The
unit will use a simple-cycle combustion turbine and provide enough
power for 86,000 customers. The project is planned to be operational
in 2014.
Sources: Basin Electric Power Cooperative, MDU Resources
5
Renewables ➤
WIND
n North Dakota has more than 1,600 megawatts of wind energy installed,
with almost 1,000 turbines dotted around the state.
n North Dakota’s wind resource is ranked sixth in the country, and ranks
eleventh for the most installed wind capacity, getting 14.7 percent of its
power from wind resources.
n According to the American Wind Energy Association, North Dakota
ranked third in the U.S. in 2011 for percentage of electricity derived from
wind.
n The North Dakota Public Service Commission has issued permits or
received letters of intent for more than 6,000 MW of additional wind
projects for future wind development. Currently, there are no wind
projects under construction.
n The federal wind energy Production Tax Credit (PTC) provides an
income tax credit of 2.2 cents per kilowatt-hour for the production of
electricity from utility-scale turbines during the first ten years of electricity
production. The PTC was extended through the year 2013, giving a credit
to all wind projects that start construction within the year, regardless of
when the project is completed and operational.
n Capacity factor is a term used to describe how often the wind is blowing
strong enough for the wind turbines to generate electricity. The U.S.
Department of Energy reports that the national capacity factor has
increased from 25 percent in 1999 to a high of 34 percent in 2008. The
Bison Wind Energy Center averages a capacity factor of 42-44 percent,
thanks to the robust North Dakota winds.
Sources: North Dakota Public Service Commission, NextEra Energy, Minnesota Power,
Acciona Wind Energy, Iberdrola Renewables, MDU Resources, Basin Electric Power Cooperative, Minnkota Power Cooperative, American Wind Energy Association, U.S. National
Renewable Energy Laboratory, Wind Powering America
Wind resource map developed by NREL for DOE with data from AWS Truepower.
Spotlight on North Dakota Energy
6
A Bison Wind turbine spins near an old-fashioned wind mill.
Photo courtesy of Minnesota Power.
Facility
County
Company
Capacity
(by MW)
Ashtabula Wind Energy Center I (2008, 196.5 MW);
Ashtabula II (2009, 120 MW);
Ashtabula III (2010, 62.5 MW)............................................... Barnes, Griggs, Steele............ NextEra Energy.............................................379
Bison Wind Energy Center I (2011, 82 MW)
Bison II and III (2012, 210 MW)............................................. Oliver, Morton......................... Minnesota Power...........................................292
Langdon Wind Energy Center I
(2007, 118.5 MW and 2008 40.5 MW);
Langdon II (2009, 40.5 MW).................................................. Cavalier................................... NextEra Energy/Otter Tail..............................199.5
Rugby Wind Power Project (2009)........................................ Pierce...................................... Iberdrola Renewables....................................149.1
PrairieWinds ND 1 (2009)...................................................... Ward....................................... Basin Electric Power Cooperative.................122
Baldwin Wind Energy Center (2010)..................................... Burleigh................................... NextEra Energy.............................................102.4
Wilton Wind Energy Center I (2006, 49.5 MW);
Wilton II (2009, 49.5 MW)...................................................... Burleigh................................... NextEra Energy.............................................99
Oliver Wind Energy Center I (2006, 50.6 MW);
Oliver II (2007, 48 MW)......................................................... Oliver...................................... NextEra Energy.............................................98.6
Tatanka Wind Farm*.............................................................. Dickey, McIntosh..................... Acciona Wind Energy....................................90
North Dakota Wind Energy Center – Edgeley (2003)............ LaMoure.................................. NextEra Energy.............................................61.5
Luverne Wind Farm (2009).................................................... Steele...................................... Otter Tail.........................................................49.5
Cedar Hills Wind Farm (2010)............................................... Bowman.................................. Montana-Dakota Utilities................................19.5
Velva Wind Farm (2005)........................................................ McHenry................................. Acciona Wind Energy....................................12
Petersburg Wind Project (Infinity Wind Energy) (2002)......... Nelson..................................... Minnkota Power Cooperative..........................0.9
Valley City Wind Project (Infinity Wind Energy) (2002).......... Barnes.................................... Minnkota Power Cooperative..........................0.9
Statewide demonstration and privately owned projects........................................................ NA..................................................................1 Approximately
TOTAL.......................................................................................................................................................1676.9
*Tatanka Wind Farm straddles the North Dakota/South Dakota border with turbines across two counties in N.D. and one county in S.D. The wind farm is 180 MW total with 90 MW in
North Dakota.
Spotlight on North Dakota Energy
7
GEOTHERMAL
n According to the National Renewable Energy Laboratory, western
North Dakota has favorable locations for deep enhanced geothermal
systems (EGS). EGS is a technology that uses heat from the earth
to turn water into steam which drives a turbine generator to produce
electricity.
n A study on North Dakota geothermal properties, conducted by the
University of North Dakota Petroleum Research, Education and
Entrepreneurship Center of Excellence, surveys oil wells to collect
data relevant to geothermal energy and resources. The data will
be submitted to the U.S. Department of Energy-funded National
Geothermal Data System, which will make the information available
for future geothermal development. Research in North Dakota will
conclude December 2013.
n The UND Petroleum Research Center, through U.S. Department of
Energy grant, will install two Organic Rankine Cycle (ORC) engines
in the spring of 2013 at a Continental Resources oil well in Bowman
County. Each engine will generate 125 kilowatts of power, producing
a total of 250 kW. Faculty and students will conduct research for two
years at the demonstration site on power, reliability, etc., to develop
engineering and economic models for geothermal ORC energy
production.
Sources: National Renewable Energy Laboratory, University of North Dakota
Department of Geology and Geological Engineering
HYDRO
n The only producer of hydroelectric power in North Dakota is the
Garrison Dam, run by the U.S. Army Corps of Engineers – Omaha
District.
n On average, the dam produces 2.2 billion kilowatt-hours of electricity
annually. The Garrison Dam has five turbines with maximum power
output of 583 megawatts.
n Garrison Dam is the third largest reservoir in the United States by
volume.
Aerial of the Garrison Dam during 2011 flood. Prior to 2011, the 28 spillway gates had
never been opened to release flood waters. Photo courtesy of Basin Electric Power
Cooperative.
n Nationwide there are 75 Corps of Engineers hydroelectric power
plants with a total capacity of 20,474 megawatts, nearly a third of total
hydropower produced in the United States.
Sources: U.S. Army Corps of Engineers
RECOVERED ENERGY
n Recovered energy generation (REG), also known as heat-recovery
generation or waste heat energy, is a process of capturing hot exhaust to
drive a turbine and create electricity.
n The Northern Border Pipeline is a natural gas transportation system of
1,398 miles that links the Midwest with reserves in Canada.
Sources: Basin Electric Power Cooperative, MDU Resources
n Basin Electric purchases the electricity from three REG sites in North
Dakota. Those sites produce 16.5 megawatts of electricity using exhaust
from the Northern Border Pipeline. Each of the three sites – Manning, St.
Anthony and Zeeland – produce 5.5 megawatts of electricity.
n A subsidiary of Ormat Technologies developed the recovered energy
generation projects from which Basin Electric buys power. They are the
first use of this technology on a natural gas pipeline in the United States.
n Montana-Dakota Utilities owns a heat-recovery generation station
near Glen Ullin, N.D., which generates 5.3 megawatts.
St. Anthony Heat Recovery Project in North Dakota. Photo courtesy of Basin Electric.
Spotlight on North Dakota Energy
8
SOLAR
n Solar energy technology is based on two main types – photovoltaics
(PV) and concentrated solar power (CSP). CSP typically uses mirrors to
concentrate sun rays and create heat that in turn drives a heat or steam
engine. PV power uses the sun’s rays to create direct current electricity.
n Verendrye Electric Cooperative has the largest solar program in the
state with more than 225 solar-powered water pumps. The pumps are
primarily used in pasture wells in remote areas where building power
lines is cost prohibitive. The typical cost to the Verendrye Electric
member farmer is $800 for a direct-current pump and then $17 per
month to lease the solar panels. Solar power is a good
fit for water pumping, as generally water is needed
most when the sun shines the brightest.
n Bismarck State College (BSC) installed an 8 kilowatt
solar array (PV) for demonstration and educational
purposes in 2011. The project was funded by the North
Dakota Department of Commerce, MDU Resources
Foundation, the U.S. Department of Energy and BSC.
The solar array is composed of two different kinds of
panels – crystalline and thin panel solar systems, so
that students have the opportunity to study both.
Tom Jespersen, energy advisor for Verendrye Electric, teaches a group of high school students about solar panels
Verendrye members use to power pumps to water cattle. Photo courtesy of Verendrye Electric Cooperative.
Sources: National Renewable Energy Laboratory, Verendrye
Electric Cooperative, Bismarck State College
This map was
created by
the National
Renewable Energy
Laboratory for the
Department of
Energy.
Spotlight on North Dakota Energy
9
Transmission and Distribution ➤
• Minnkota Power Cooperative, based in Grand Forks, N.D.,
has begun construction on a 345-kV transmission line that
will stretch 250 miles from Center, N.D., to Grand Forks. It’s
estimated that the project will be completed in early 2013.
n The North Dakota Transmission Authority (NDTA) was established
by state legislature in 2005 to facilitate, finance, develop and acquire
transmission in North Dakota.
n In 2012, internal projections in electric load growth made by Basin
Electric Power Cooperative and Montana-Dakota Utilities Co., spurred
a request to the NDTA to conduct a joint study of the potential growth
of electrical demand within the Williston Basin over the next 20
years. The study, conducted by engineering firm KLJ, indicated that
electrical demand is expected to nearly triple in the western and north
central part of the state by 2032. Population in this part of the state
is expected to increase by more than 66,000 people
and electrical demand in McKenzie County alone is
expected to increase by 339 percent.
• A study conducted by Midwest Independent Transmission
System Operator, Inc. (MISO) is the Multi Value Project
(MVP) Portfolio Analysis which similarly consolidates public
policy transmission goals with comprehensive expansion of
transmission capacity for maximum economic and reliability
benefits. One of the projects approved by the MISO Board of
Directors in December 2011 from this study is the Big Stone
South to Ellendale (BSSE) Transmission Line. Otter Tail
Power Company and Montana-Dakota Utilities Co. are jointly
planning the BSSE Transmission Line, a 345-kV line from
Ellendale, N.D., to a substation near Big Stone City, S.D. The
project, approximately 150 miles in length, is anticipated to cost
approximately $340 million and would be in service in 2019.
• CapX2020 is a group of 11 Midwest-based utilities constructing
more than 700 miles of new 345 kV transmission lines in the
Upper Midwest. One of the proposed routes is an approximately
210-mile line from Fargo to Monticello, Minn.
Sources: North Dakota Transmission Authority
n In response to the study, Basin Electric Power
Cooperative has begun the necessary studies
and associated planning and permitting to begin
construction of a 345-kilovolt (kV) transmission line that
would stretch 190 miles from the Antelope Valley Station
near Beulah, N.D., to substations near Grassy Butte
and Williston, N.D.
n Transmission costs vary depending on terrain,
conductors, length, right-of-way, etc. Many sources
around the country report average transmission costs
for a new 345 kV line can be between $1–2 million per
mile, depending on a single circuit or double circuit and
varied environmental situations.
n A number of other transmission projects are currently
under construction or being planned to improve existing
transmission systems or to establish new avenues for
moving power across our region:
Spotlight on North Dakota Energy
Lineworkers work on a transmission line. Photo courtesy of Basin Electric Power Cooperative.
10
Petroleum ➤
OIL/GAS PRODUCTION
n In 2012, North Dakota surpassed both California and Alaska to become
the second largest oil producer in the nation, behind only Texas.
n Annual oil production for the state totaled more than 242 million barrels
of oil in 2012, with the month of December topping out at a record
768,853 barrels per day. Natural gas production for the year totaled
258.7 billion cubic feet, with an all-time high rate of 805 million cubic
feet per day in December 2012.
n Average rig count in 2012 was 200 rigs. Drilling rig counts have
decreased throughout 2012, from a peak of 218 in May, to 184 in
December.
n As of November 2012 there were 8,101 producing wells, with more
than half of those in the Bakken Formation. The ND Department of
Mineral Resources estimates that an additional 2,000 wells will be
drilled per year for the next 18 years.
n North Dakota’s first oil well came online near Tioga in Williams County
in 1951. Named Clarence Iverson #1, the well produced more than
585,000 barrels of oil in 28 years.
n Seven exploration and production companies account for 65 percent
of Bakken drilling – Continental Resources, Hess, Whiting Petroleum,
Statoil, Oasis Petroleum, Marathon and EOG Resources.
n The North Dakota Pipeline Authority (NDPA) commissioned a natural
gas production and transportation study, completed by BENTEK
Energy in 2012. Using data obtained from the study, the NDPA
released a natural gas forecast that estimates North Dakota could be
producing 2.0-2.4 billion cubic feet of natural gas each day by the late
Map courtesy of U.S. Energy Information Administration.
Spotlight on North Dakota Energy
11
2020s. This is up from current natural gas production of roughly 0.72
billion cubic feet per day.
n A typical 2012 North Dakotan Bakken well will produce for 45 years
if enhanced oil recovery efforts extend the life of the well. In those 45
years the average Bakken well will:
• Produce approximately 615,000 barrels of oil
• Generate about $20 million net profit
• Pay approximately $4,325,000 in taxes
- $2,100,000 gross production taxes
- $1,800,000 extraction tax
- $425,000 sales tax
• Pay royalties of $7,300,000 to mineral owners
• Pay salaries and wages of $2,125,000
• Pay operating expenses of $2,300,000
• Cost $9,000,000 to drill and complete
See Workforce/Training section for oil-related job information.
Map courtesy of U.S. Energy Information
Administration.
Spotlight on North Dakota Energy
12
Hydraulic Fracturing ➤
n The Bakken shale play was previously undeveloped because
conventional drilling methods weren’t able to access the trapped oil
and gas. The process of hydraulic fracturing has made it possible for
companies to economically drill for oil in the Bakken Formation.
n Hydraulic fracturing (also called fracking) is a process that pumps
a specially blended liquid into a well under high pressure, creating
fractures in the underground rock to release more oil and natural gas.
n The fluid used in the hydraulic fracturing process is 98 to 99.5 percent
water and sand mixture. A variety of chemical additives are used,
depending on the well conditions, to limit the growth of bacteria,
North Dakota Representative David Rust examines frack fluid. Photo courtesy of North Dakota
prevent corrosion of well casing, and to increase efficiencies. Some
Petroleum Council.
examples of the common compounds and their
purpose and common applications include:
• Acids – 0.12% – Keeps fractures open so gas
can escape (swimming pool cleaner)
• Petroleum distillates – 0.088% – Minimizes
friction (make-up remover, laxatives, candy)
• Isopropanol – 0.081% - Increases fluid viscosity
(glass cleaner, antiperspirant, hair color)
• Guar gum – 0.056% - Thickens water to suspend
sand (cosmetics, toothpaste and ice cream)
• Ethylene glycol – 0.043% - Prevents scale
deposits (antifreeze, household cleansers, deicer)
n The additives that companies use are disclosed
on FracFocus.org, a website that provides public
access to reported chemicals used in fracking
and factual information on the fracking process.
North Dakota is one of eight states that requires
chemical disclosure via FracFocus.
n The majority of the fluid used in fracking is water.
According to the N.D. Department of Mineral
Resources, if 2,000 wells are drilled per year over
an approximate 20 year timeframe, those wells
would require 11-22 million gallons of water per
day.
Sources: North Dakota Petroleum Council, North Dakota
Department of Mineral Resources, U.S. Energy Information
Association, Frac Focus
Courtesy of American Petroleum Institute.
Spotlight on North Dakota Energy
13
Tesoro Corporation’s Mandan Refinery. Photo courtesy of Tesoro.
Refining ➤
n Tesoro Corporation’s Mandan refinery was established in 1954 and
is the state’s only oil refinery. The refinery has a crude oil processing
capacity of 68,000 barrels per day (bpd). 1 Barrel = 42 Gallons.
• Tesoro processes Williston Basin crude oil from North Dakota to
refine into gasoline, diesel fuel, jet fuel, heavy fuel oils and liquified
petroleum gas. Products are trucked and railed from Mandan
and also shipped east via pipeline to eastern North Dakota and
Minnesota.
• Because of high demand for diesel fuel in the region, the
refinery is expanding its Distillate Desulfurization Unit capacity
by 5,000 barrels of diesel per day to bring the plant’s total diesel
hydrotreating capacity to 22,000 bpd.
• Tesoro employs more than 250 people in the Bismarck-Mandan
area and more than 100 people in western North Dakota and
eastern Montana with the Tesoro High Plains Crude pipeline
system.
n A number of new refining projects have been proposed in North
Dakota. Upon completion of a new refinery, North Dakota will be
home to the first refinery built in the United States in more than 30
years.
• The U.S. Interior Department granted North Dakota’s Three
Affiliated Tribes control of 469 acres of land near Makoti in late
2012 to build a refinery. The tribe proposed a $400 million refinery
that would process about 13,000 barrels of oil a day. If all required
approvals are granted, construction will start in the spring of 2013.
• An MDU Resources subsidiary and Indiana-based Calumet
Specialty Products Partners, LP, are partnering in a proposed
diesel refinery near Dickinson. It will process up to 20,000 bpd of
Bakken crude.
• Dakota Oil Processing is planning a $200 million crude oil topping
refinery near Trenton. If approved, the facility would process 20,000
barrels per day of light sweet crude for diesel and secondary
products such as naptha, residual fuel oil and elemental sulfur.
Source: Tesoro Refinery, MHA Nation, MDU Resources, Dakota Oil Processing
Spotlight on North Dakota Energy
14
Pipelines ➤
n The North Dakota Pipeline Authority was created by the state
legislature in 2007 to assist the development of pipeline facilities to
support energy-related commodities.
n North Dakota has more than 7,000 miles of transmission and
distribution pipelines. The U.S. has the largest network of pipelines in
the world.
n North Dakota has four products pipelines, seven major crude oil
pipelines, five major natural gas pipelines, and one carbon dioxide
pipeline.
n The North Dakota Pipeline Authority reports that crude oil pipeline
projects in planning stages or under construction could add more than
750,000 bpd of shipping capacity.
n The North Dakota Pipeline Authority (NDPA) commissioned a natural
gas production and transportation study, completed by BENTEK
Energy in 2012. The study shows that as natural gas production
continues to rise, competition for pipeline space will intensify. NDPA
reports that Bakken natural gas has a high content of natural gas
liquids (NGL), such as ethane, propane, butane, and natural gasoline.
Calculations estimate a potential of 400,000-450,000 barrels per day
of Natural Gas Liquids (NGL) production from North Dakota during the
next decade.
Sources: North Dakota Pipeline Authority
.
n In 2012, the N.D. Pipeline Authority reported that more than half of oil
transportation occurred through rail transport, roughly a third through
pipelines, and the remaining oil went directly to the in-state Tesoro
Refinery and via truck to Canadian pipelines.
n Currently four major oil transmission pipelines are proposed in or near
North Dakota:
• Enbridge has proposed a 500-plus-mile pipeline to transport 225,000
barrels per day of North Dakota crude oil to its main terminal in
Superior, Wis.
• TransCanada has proposed the Keystone XL pipeline to move
crude oil from Alberta, Canada, to the Gulf Coast, crossing close
to the North Dakota border through Montana and South Dakota.
The 1,179-mile pipeline would have facilities near Baker, Mont., to
allow shipments of up to 100,000 bpd of Williston Basin crude oil
to southern refining markets. Because it crosses an international
border, the pipeline needs a presidential permit, which at press time
has not been granted.
• True Companies has proposed an expansion of the Butte Pipeline
that would start about 15 miles from the North Dakota border near
Baker, Mont., and transport Williston Basin crude to a connecting
terminal in Wyoming. The Butte Pipeline will be operated by Bridger
Pipeline, which is owned by True Companies.
• High Prairie Pipeline, owned by Saddle Butte Pipeline, has proposed
a new 450-mile pipeline from the Alexander area in McKenzie
County to a terminal near Clearbrook, Minn. The project, which is
currently stalled in a legal scuffle with Enbridge over interconnection,
would have capacity for 150,000 barrels per day.
Maps courtesy of North Dakota Pipeline Authority.
Spotlight on North Dakota Energy
15
Natural Gas Processing ➤
n North Dakota currently has 18 natural gas processing plants operating
in western North Dakota located near Arnegard, Ambrose, Belfield,
Killdeer, Lignite, Marmarth, McGregor, Ray, Rhame, Stanley, Tioga,
Trotters and Watford City.
n A challenge of the petroleum industry is capturing the natural gas coproduced with oil production. Twenty-nine percent of the natural gas
produced in North Dakota is currently burned off, or flared. According
to the N.D. Department of Mineral Resources, private industry has
pledged to invest more than $4 billion in additional natural gas
gathering and processing infrastructure to reduce flaring.
n Since 2010, natural gas processing capacity in North Dakota has
more than doubled, increasing from 500 MMCFD to 1,236 MMCFD.
n ONEOK Partners is the largest independent operator of natural
gas gathering and processing facilities in the Williston Basin, with a
Owner Company
Facility
County
Processing Capacity MMCFD**
Hess................................................Tioga................................................. Williams...............................250
Aux Sable – Chicago, IL..................Prairie Rose...................................... Mountrail..............................110*
ONEOK............................................Grasslands........................................ McKenzie.............................100
ONEOK............................................Stateline I.......................................... Williams...............................100
ONEOK............................................Stateline II......................................... Williams...............................100 (operational in 2013)
ONEOK............................................Garden Creek I.................................. McKenzie.............................100
Hiland Partners................................Watford City....................................... McKenzie.............................90
Whiting Oil & Gas............................Robinson Lake.................................. Mountrail..............................90
Plains...............................................Ross.................................................. Mountrail..............................50-75
Saddle Butte....................................Watford City....................................... McKenzie.............................45
Hiland Partners................................Badlands........................................... Bowman...............................40
New Frontier Midstream..................South Heart....................................... Stark....................................40 (operational in 2013)
Petro Hunt.......................................Little Knife......................................... Billings.................................32
Whiting Oil & Gas............................Belfield.............................................. Stark....................................30
Hiland Partners................................Norse................................................. Divide...................................25
True Oil............................................Red Wing Creek................................ McKenzie.............................10
XTO – Nesson.................................Ray.................................................... Williams...............................10
ONEOK............................................Marmath............................................ Slope...................................7.5
ONEOK............................................Lignite................................................ Burke...................................6
Sterling Energy................................Ambrose............................................ Divide...................................5
ONEOK............................................Garden Creek II................................. McKenzie.............................NA (operational in 2014 with 100 MMCFD)
ONEOK............................................Garden Creek III................................ McKenzie.............................NA (operational in 2015 with 100 MMCFD)
Summit Resources..........................Knutson............................................. Billings.................................NA (gas separation unit)
*Aux Sable facility has capacity to transport and process up to 110 mmcfd of North Dakota natural gas at its Chicago facility. **MMCFD - Milllion Cubic Feet per Day as of 2013.
Spotlight on North Dakota Energy
16
natural gas gathering system of more than 5,000 miles
and acreage dedications of approximately 3.1 million
acres. They are investing close to $2.7 billion through
2015 to construct natural gas gathering and processing
and natural gas liquids infrastructure, including five 100
MMCFD natural gas processing plants. The Garden
Creek plant was completed in December 2011, and
Stateline I plant was completed in September 2012. The
Stateline II plant is expected to be completed in the first
quarter of 2013, and the Garden Creek II and III plants
are expected to be completed during the third quarter of
2014 and the first quarter of 2015, respectively. When
completed, the natural gas processing capacities of the
Garden Creek II and III plants, and the Stateline II plant
combined with the existing Garden Creek, Stateline I and
Grasslands natural gas processing facilities will be 590
MMCFD in the Williston Basin.
Sources: North Dakota Pipeline Authority, ONEOK
ONEOK Partners Garden Creek natural gas processing facility located in
eastern McKenzie County. Photo courtesy of ONEOK.
Synthetic Natural Gas ➤
n The Dakota Gasification Company’s Great Plains Synfuels Plant is the
only commercial-scale coal gasification plant in the United States that
manufactures synthetic natural gas from lignite coal. It produces about
160 million cubic feet of natural gas a day which is shipped via the
Northern Border Pipeline to the eastern United States.
n The plant uses about 18,000 tons of lignite coal each day, supplied via
the Freedom Mine. Besides synthetic natural gas, its many coproducts
are marketed throughout the U.S. and worldwide, including liquid
nitrogen, anhydrous ammonia, and phenol.
n The Synfuels Plant is the largest carbon sequestration project in
the world, capturing between 2.5 and 3 million metric tons of carbon
dioxide per year that it pipes to the Weyburn oil fields in Canada for
use in enhanced oil recovery.
n Cenovus Energy, operator of the Weyburn oil field in Saskatchewan,
predicts that injecting carbon dioxide will extend the life of the
Weyburn field by 30 years and possibly longer.
Spotlight on North Dakota Energy
An aerial view of the Great Plains Synfuels Plant. Photo courtesy of Basin Electric
Power Cooperative.
Sources: Basin Electric Power Cooperative, Cenovus Energy
17
Biofuels ➤
ETHANOL
n In a modern ethanol facility, one bushel of corn produces 2.8 gallons
of ethanol and 18 pounds of co-products, including dried distillers
grains, CO2 and corn oil.
n North Dakota’s four ethanol plants have an annual production
capacity of nearly 400 million gallons per year – a more than tenfold
increase since 2005.
n The state’s ethanol industry generates more than $650 million
in economic activity each year and directly employs almost 200
workers across the state with an average annual wage of $64,000.
n Approximately 140 million bushels of corn are used annually, with
more than 80 percent of the corn purchased from North Dakota
farmers.
n One-third of every bushel of grain used for ethanol production
returns to the animal feed market in the form of dried distillers
grains (DDGs). More than 1.2 million tons of DDGs are produced in
the state annually.
n Approximately 6 percent (24 million gallons) of the ethanol
produced annually in North Dakota is blended with gasoline and
sold within the state. The remaining 94 percent is shipped primarily
to the east or west coast.
Aerial of Blue Flint Ethanol Plant. Photo courtesy of North Dakota Ethanol Council.
Plant
Location
Employees
Ethanol Capacity (million gallons)
Corn Used
DDG (tons)
(million bushels)
Totals
400
143
Blue Flint Ethanol...................................Underwood................ 40...............................65............................................ 23.......................................190,000
Hankinson Renewable Energy, LLC.......Hankinson................. 59...............................145.......................................... 52.......................................452,000
Red Trail Energy, LLC............................Richardton................. 42...............................50............................................ 18.......................................110,000
Tharaldson Ethanol................................Casselton.................. 54...............................140.......................................... 50.......................................400,000
195
>1.1 million
Source: North Dakota Ethanol Council
Spotlight on North Dakota Energy
18
Biomass/Biofuels/Biodiesel ➤
n Biomass includes all plant and animal matter. Harvested biomass can
be used to generate various forms of energy, such as heat, electricity
and biofuels. Biomass includes wood waste, energy crops, crop
residues and other forms of organic waste.
n BeetsAll Biofuel is a partnership between Green Vision Group,
Heartland Renewable Energy and the North Dakota State University
(NDSU). NDSU and the Carrington Research Extension Center have
been researching the feasibility of developing an advanced biofuel
from energy beets since 2009. Successful results have been seen at
test sites all around North Dakota where sugar beets aren’t typically
grown. The group plans to begin construction on its first plant in late
2014 or early 2015 and begin operation in the fall of 2015. The first
crop of energy beets to support the plant should be grown in 2015.
According to BeetsAllBiofuel.com, the first facility would be followed by
a string of commercial-scale plants in subsequent years, with a goal of
at least 12 plants.
is conducting research on oilseeds for renewable jet fuels production.
The research includes identifying oilseed varieties, production
methods and geographic regions to reduce the cost of producing jet
fuels from oilseeds and make them cost competitive with petroleum
fuels. The research is also identifying sustainable ways to grow the
oilseed crops so that they are profitable for the farmer to produce
while protecting soil resources and water quality.
n North Dakota’s only biodiesel production facility is located near Velva,
N.D. The plant utilizes canola as a feedstock and has the potential to
produce 85 million gallons of biodiesel per year. The facility is currently
crushing canola rather than producing biodiesel.
n Since construction in the 1980s, ADM’s sunflower processing plant at
Enderlin has utilized sunflower hulls and other biomass as boiler fuel.
Sources: Great River Energy, ARS Northern Great Plains Research Center, BeetsAll
Biofuel
n Dakota Spirit
AgEnergy plans
to break ground in
2013 on a 65 million
gallon per year
biorefinery next to
Great River Energy’s
Spiritwood Station
power plant. Dakota
Spirit AgEnergy
Phase I will produce
ethanol, corn oil
and distillers grain
from corn. The
implementation of
Phase II will see
a “bolt-on” facility
producing cellulosic,
isobutanol or other
emerging biofuel
technologies.
n The Agricultural
Research Service
Northern Great
Plains Research
Center in Mandan
This map was created by the National Renewable Energy Laboratory for the Department of Energy.
Spotlight on North Dakota Energy
19
Energy Efficiency ➤
n The North Dakota Department of
Commerce (NDDoC) has an office of
Renewable Energy & Energy Efficiency
that promotes efficiency activities within
the state in both the public and private
sectors.
n According to the NDDoC, 834 housing
units were weatherized in North Dakota
in 2012 with U.S. Department of
Energy and Low-Income Home Energy
Assistance Program Weatherization
funds.
n Homeowners participating in the NDDoC
Weatherization Assistance Program
achieve an average of 17-25 percent
lower energy costs.
n The state issued 53 refrigerator rebates
and 3,476 utility rebates in 2012.
n Through the Energy Efficiency &
Conservation Block Grant, 196 public buildings were retrofitted, and
the energy savings will pay for each project within ten years.
n According the U.S. Green Building Council, North Dakota has 26
LEED (Leadership in Energy and Environmental Design) rated
buildings: 6 Gold, 10 Silver and 10 Certified. The LEED rating system
awards points based on a variety of categories, such as water and
energy efficiency, sustainability and indoor environmental quality.
Ratings range from Platinum (highest attainable level), Gold, Silver
and Certified. As of February 2013, there are 55 projects registered in
the state and awaiting certification.
ENERGY STAR in North Dakota
n Energy Star is a joint program of the US Environmental Protection
Agency and the U.S. Department of Energy assisting citizens in
saving money and protecting the environment through energy efficient
products and practices.
• 24 ENERGY STAR certified homes built in 2012
• 647 ENERGY STAR certified homes built through February 2013
• 28 ENERGY STAR certified commercial buildings as of February
2013
• 1 ENERGY STAR certified industrial plant
Sources: North Dakota Department of Commerce, ENERGYSTAR
Spotlight on North Dakota Energy
North Dakota Taxes
n The North Dakota State Tax Department cites thriving industry, a
record number of workers, a booming housing market and strong
land values as contributors to continued growth in taxable sales and
purchases within the state. The third quarter of 2012 was up 22.4
percent at $6.735 billion compared to the same quarter in 2011.
n Of the 50 largest cities in North Dakota, the largest percentage
increases for the third quarter came from the oil patch towns of New
Town (up 87.4%), Tioga (62.7%), Watford City (46.7%), Crosby
(44.5%) and Kenmare (42.2%).
n The Legacy Fund was established in 2010 as the state’s nest egg and
is funded by 30 percent of state oil and gas taxes. At the time it was
established, it was projected to have about $600 million by June 2013.
At the end of 2012, the fund was at $707 million and projected to grow
to $1-2 billion by June 2013. Money from the Legacy Fund cannot
be spent until July 1, 2017. Legislators can then spend the interest.
The principle can only be spent with a two-thirds majority vote in both
legislative chambers and then 15 percent of the principle can be spent
every two years. In total, oil and gas taxes will generate approximately
$3.2 billion for the state’s current 2011-13 budgeting cycle and are
projected to generate $5.2 billion for the upcoming 2013-15 budgeting
cycle.
Source: North Dakota Tax Department
20
Education/Workforce Training ➤
n The N.D. Department of Mineral Resources anticipates
2,000 wells/year for the next 18 years, creating one longterm job per well, plus temporary infrastructure jobs.
The state could see a peak of 65,000 jobs in 2020 with
35,000-40,000 of those jobs being long term.
n Job Service North Dakota data shows that in June 2012,
an estimated 29,410 workers were in direct or support
positions for the industries of oil and gas extraction,
coal mining, utilities and pipeline transportation, with an
estimated annual wage of $95,043. These statistics do
not reflect employment or wages in ancillary businesses
or industries working in the energy field, such as
trucking, construction, engineering, manufacturing and
repair services.
n During 2012 numerous job opportunities arose in the
A student completes his lab execise on an analytical process control trainer. Photo courtesy of Bismarck State
state. Data from the Online Job Openings Report,
College Instrumentation and Control lab.
produced by Job Service North Dakota, showed an
average of 21,153 openings per month, with a peak of
graduates were employed and earning a salary typically ranging
24,059 in April. The two occupational groups most closely associated
from $20-40 per hour. Those programs are:
with opportunities in the oil patch (Construction & Extraction and
• Electric Power
Transportation & Material Moving) averaged nearly 3,800 openings
• Electrical Transmission Systems
per month. Geographically, the 17 oil and gas producing counties
• Bachelor of Applied Science in Energy Management
accounted for approximately one-third of the job openings in the state.
• Instrumentation & Control
n Bismarck State College hosts the National Energy Center of
• Lineworker
Excellence (NECE) and is home to many nationally-recognized
• Mechanical Maintenance
energy industry degree and training programs. The NECE works with
• Nuclear Power
regional and national energy companies to offer online and/or hands• Power Plant
on training options in maintaining certification/training requirements,
• Process Plant
educating new hires and to supplement existing training programs.
• Renewable Generation
• Energy program enrollments make up roughly one-fourth of the
NEW PROGRAMS:
Bismarck State College (BSC) student body, and students can
• Petroleum Production (began Fall 2011)
complete programs on campus or online using the NECE’s world• Water & Wastewater Technician (began Fall 2012)
class lab equipment, online simulations, animations and real-time
n BSC is the lead institution for a $14.6 million U.S. Department of
lab sessions.
Labor grant to expand and improve training for energy-related
careers. The grant was awarded in October 2012 to the TREND
• BSC’s bachelor’s degree of Applied Science in Energy
Consortium, a partnership between the state and tribal institutions of
Management was ranked the seventh most affordable online
BSC, Fort Berthold Community College, Sitting Bull College, Turtle
management degree in the nation by GedEducated.com, a
Mountain Community College and Williston State College.
consumer group that publishes online college rankings and online
university ratings.
• In 2012, 374 students graduated from ten energy programs
offered at BSC (listed below). Of those graduates that responded
to a survey conducted by BSC Career Services, 98 percent of the
Spotlight on North Dakota Energy
n Other North Dakota colleges and universities offering energy courses
and related training programs are Lake Region State College, Minot
State University, North Dakota State College of Science, North Dakota
State University, University of North Dakota and Williston State
College.
21
n The Energy & Environmental Research Center
in Grand Forks was established as a nonprofit
branch of the University of North Dakota that
conducts research, development, demonstration
and commercialization activities. Their team
consists of around 300 scientists, engineers and
support personnel.
n BSC, Williston State College (WSC), Lake
Region State College and North Dakota State
College of Science are partners in TrainND, a
workforce training initiative established by the
state legislature in 1999. TrainND works with
businesses to provide tailored training programs
in a variety of areas including energy training.
Sources: Job Service North Dakota, Bismarck State College,
University of North Dakota Energy & Environmental Research
Center
Graph courtesy of the North Dakota Department of Mineral Resources.
Bismarck State College National Energy Center of Excellence.
Spotlight on North Dakota Energy
22
This material is based upon work supported by the Department of Energy Award DE-OE0000079.
This report was prepared as an account of work sponsored by an agency of the United States Government.
Neither the United States Government nor any agency thereof, nor any of their employees, makes any warranty,
express or implied, or assumes any legal liability or responsibility for the accuracy, completeness, or usefulness
of any information, apparatus, product, or process disclosed, or represents that its use would not infringe privately
owned rights. Reference herein to any specific commercial product, process, or service by trade name, trademark,
manufacturer, or otherwise does not necessarily constitute or imply its endorsement, recommendation, or favoring
by the United States Government or any agency thereof. The views and opinions of authors expressed herein do
not necessarily state or reflect those of the United States Government or any agency thereof.
Spotlight on North Dakota Energy
23
Spotlight on North Dakota Energy
24