Accountability for tribal oil taxes still an issue

Posted on April 6, 2013 by Amy Dalrymple

BISMARCK – An amendment to a bill that includes parameters for a new oil tax agreement with the Three Affiliated Tribes moved forward Friday, but legislators indicated it may get more scrutiny at a future hearing.

Members of the state Senate adopted several amendments Friday to House Bill 1234, an oil bill that includes an amendment that would equally divide oil taxes generated on the Fort Berthold Reservation between the tribes and the state.

Sen. John Andrist, R-Crosby, requested to consider the tribal tax agreement separately from other amendments in the bill.

“I hear a lot of talk about there’s no accounting for the money they’re getting right now,” Andrist said. “I think this should have more daylight.”

Andrist withdrew his request after other legislators suggested it could be dealt with at a future hearing. The bill will be discussed by the Senate Appropriations Committee on Monday.

Other amendments adopted Friday include an elimination of a tax loophole for some wells in the same area as low-producing wells, known as stripper wells.

The elimination of that tax exemption is estimated to bring an additional $104 million in revenue during the next biennium. Currently, a productive oil well in the same spacing unit as a low-producing well can qualify for the same tax exemption as the weaker wells.

While the loophole will close for some wells, others may now fall under the definition of a low-producing well and be exempt from taxes.

Another amendment would change the criteria for Bakken and Three Forks stripper wells from those that produce fewer than 30 barrels to fewer than 40 barrels. That would mean a projected loss of $13.5 million in state revenue.

Sen. Jim Dotzenrod, D-Wyndmere, said he’s concerned that changing the definition of a stripper well could cost the state significant future revenue.

Sen. Dwight Cook, R-Mandan, said the cost of drilling an oil well in the Bakken has risen 20 percent since 2008, so he feels the change is good way of encouraging continued oil exploration.

“I think it’s justifiable when you look at the cost of drilling out there,” Cook said.

Another amendment includes a tax incentive to encourage companies to drill in formations other than the Bakken and Three Forks.

In addition, the bill would withhold taxes on royalty payments to non-North Dakota residents, generating an estimated $4.2 million for the state.

Faces of the Boom: Bismarck man aims to bridge gap between conservation, oil industry

Posted on January 28, 2013 by Amy Dalrymple

Terry Fleck, pictured in his home office in Bismarck with walleye he caught in Lake Sakakawea, is helping energy companies and conservation groups work together to protect the North Dakota outdoors. Amy Dalrymple/Forum News Service

BISMARCK, N.D. – When Terry Fleck goes fishing or hunting, he aims to leave the area better than how he found it.

That’s the same attitude the Bismarck man hopes oil and gas companies will have about development in North Dakota.

Fleck spent 30 years in the radio and television industry and retired to become a public speaker known as The Attitude Doctor.

Now Fleck is using his skills as a communicator to bring together the oil industry with outdoor and wildlife groups to promote energy development while minimizing the impact to the state he loves.

“We would hope that North Dakota is a better place after this, if and when it ends,” he said.

Fleck, both an avid outdoorsman and a partner in an energy company, believes there’s room for both interests in the state. He brought together oil companies and wildlife and conservation groups to form the Sporting and Oil Industry Forum, which has developed best practices for the industry to follow and continues to meet regularly.

“We have much to protect. This is a unique part of the world,” said Fleck, originally from the small town of Flasher. “How do we protect those quiet places and make sure we still have some?”

Fleck has a front-row seat to the oil boom from his lake home on the Van Hook Arm of Lake Sakakawea, where he has watched oilfield traffic become more intense and job opportunities expand for his neighbors.

“That’s where my understanding and my background came from in watching my friends and neighbors at the lake who lived in the Bakken suddenly begin to experience tremendous lifestyle changes,” he said.

Fleck, who calls himself a “fanatic fisherman,” serves as chairman of Friends of Lake Sakakawea, which helped push for the oil industry to develop the Sakakawea Area Spill Response.

He is a partner in Intervention Energy, a privately held non-operating oil and gas company started by Minot, N.D., native John Zimmerman, Fleck’s former neighbor.

Fleck also serves as the volunteer chairman of the North Dakota Energy Forum, a group committed to improving the understanding of oil and gas development in the state.

That varied background is what helped Fleck see the need to help bridge the gap between industry and outdoor and wildlife groups. The group will have its fourth meeting in March.

“My belief is we will accomplish more and will have a greater end result if we all stay at the table,” Fleck said. “Is that going to be easy? No. We wouldn’t exist if it were going to be easy.”

Terry Steinwand, director of the North Dakota Game and Fish Department, said he can’t think of a better facilitator than Fleck to get oil companies and conservation groups working together.

“To get those very diametrically different missions together in the same room, I think that was a task in itself,” Steinwand said.

Participation has remained strong from both sides, and Steinwand said he expects the group to keep moving in the right direction.

“This has some staying power,” he said.

By setting an example and communicating their passion for the state, outdoorsmen and women can help the oil industry minimize its footprint on the land, Fleck said.

“I’m a guy who believes given the passion that we all have for this, that we can make this work,” he said.

Dakota Resource Council plans Bakken discussion

Posted on October 26, 2012 by Amy Dalrymple

BISMARCK – Two ranchers and a member of the Three Affiliated Tribes will lead a panel discussion Saturday on oil development and what can be done to improve living and working conditions in the Bakken.

The discussion, part of the Dakota Resource Council’s annual meeting, is from 3:15 p.m. to 4:30 p.m. Saturday at the AmVets Club, 2402 Railroad Ave., Bismarck.

Speakers are Donny Nelson, a McKenzie County farmer and rancher, Brenda Jorgenson, a Mountrail County farmer and rancher, and Theodora Bird Bear, who lives and works on the Fort Berthold Reservation.

The theme of the Dakota Resource Council’s 35th annual meeting is “Build a Better Bakken.” For more information, call (701) 224-8587.

Pipelines promoted as alternative to trucking, flaring

Posted on June 15, 2012 by Amy Dalrymple

WILLISTON, N.D. – Gov. Jack Dalrymple had a simple message Thursday for representatives from the pipeline industry: “As far as we’re concerned in North Dakota, you can’t go too fast.”

More than 100 industry leaders and others gathered in Bismarck for a summit on pipeline development, which Dalrymple and other state officials say is key to taking trucks off the roads, reducing flaring of natural gas and providing more cost-effective routes to market.

“There is no single thing that I can think of that can do more to reduce the human impacts of rapid oil development than pipelines,” Dalrymple said.

North Dakota’s pipeline capacity would transport more than 1.5 million barrels of oil per day by 2015 if all of the proposed interstate projects move forward, Dalrymple said.

The state’s oil production is projected to hit 1 million barrels of oil per day in three to five years, Dalrymple said. The large, interstate pipeline projects also would transport Williston Basin oil pumped from in Canada, Montana and South Dakota.

“We are on track to have our state’s production actually handled by pipeline,” Dalrymple said.

Tad True, vice president of Bridger/Belle Fourche Pipelines, said pipelines are significantly reducing the length of truck hauls.

For example, the 77-mile Four Bears Pipeline that starts near New Town, N.D., eliminates the need for 50,000 truck miles each day on Highways 22 and 85, True said.

Pipeline transportation also is safer than rail or truck and has lower spill rates, said Alex Pourbaix, president of energy and oil pipelines for TransCanada.

Dalrymple said he’s glad to see pipelines and natural gas gathering systems reducing the need for flaring, but the challenge is keeping up with the pace of drilling. Natural gas is flared, or burned off, at a drilling site when there is no way to capture gas that escapes from a pumping oil well.

The North Dakota Pipeline Authority is studying natural gas production with a report due in July.

Mike McGonagill, senior vice president for Alliance Pipeline, emphasized his company’s commitment to safety, the land and local communities.

Alliance is working with North Dakota State University on a native prairie reclamation effort, he said.

“We do want to work very hard to mitigate the impacts that we have on land,” McGonagill said.

Gene Veeder, director of McKenzie County Economic Development, said five or 10 year ago, landowners who were approached about securing the right-of-way for a pipeline project were concerned primarily about money.

Today, more landowners are concerned about what the pipeline is transporting, what happens if there’s a spill and the long-term effects on the land, said Veeder, who owns a ranch near Watford City, N.D.

Veeder encouraged industry officials to work in cooperation with landowners and to be cautious about the construction companies they hire because one bad player affects other pipeline development.

Overall, Veeder said the message he’s sharing with the public is to embrace pipelines.

“If you don’t like flares, you have to like pipelines. If you don’t like trucks, you have to like pipelines,” Veeder said.

Modular units could ease Oil Patch day care crunch

Posted on June 1, 2012 by Amy Dalrymple

In case you missed it: From my colleague Teri Finneman in Bismarck.

BISMARCK – Gov. Jack Dalrymple asked state officials Thursday to consider an idea that he hopes will help address the child care crunch in western North Dakota’s Oil Patch.

Dalrymple proposed a pilot program that would provide energy impact grants to cities to help buy modular child care facilities.

The state has about $870,000 that could be used for a cost-share program that would require cities to secure a location and pay a portion of the cost for the modular facility. Each modular is estimated to cost $250,000 and is designed for up to 18 children.

“What’s interesting here is that they come as complete modular units, including equipment and furnishings,” Dalrymple said at the Board of University and School Lands meeting. “All you have to do is place them and hook up the sewer and water, and you’re in business.”

The state’s energy impact grant program has helped other infrastructure needs in western North Dakota, but the “tremendous need” for day care services hasn’t been addressed, Dalrymple said.

“We’ve been looking for a way to help with this issue without getting directly involved in operations of a child care facility in any way,” Dalrymple said.

The city could use its own money or seek donations from private companies to cover the local share of the cost, Dalrymple said. The city could offer some of the day care spots to its employees or to employees of companies that contribute, Dalrymple said.

The state grants to help buy the modular child care facilities would be a one-time incentive, not an ongoing obligation, Dalrymple said. Money for the pilot project would come from tax revenue paid to the state by the oil and gas industry.

The city could lease the building to a child care operator, Dalrymple said.

Treasurer Kelly Schmidt agreed there’s a need for child care. However, she said the board needs to be fair and ensure the grant process is similar to other energy impact grants.

She also questioned if the state was competing with the private sector. Dalrymple said the operator of the business would be from the private sector.

“This is an opportunity for them to get a good space at a very reasonable price, so we’re encouraging it, but the enterprise is still in the hands of the operators,” Dalrymple said.

A host of reasons have contributed to the shortage of day care in western North Dakota, including the increased population, housing shortage and soaring prices for commercial space. A fall survey found nearly 2,500 children potentially needing day care in Williams County and licensed capacity for 471, according to North Dakota Child Care Resource and Referral.

Nearly 2,800 children potentially need day care in Stark County, with licensed capacity for 800.

“I think we’ve identified this as a pressing need, a real problem, frankly,” Dalrymple said of the child care shortage. “If anything, we see day care providers going out of business rather than into business because, obviously, they have other opportunities, and so it’s not going to get better by itself, that’s for sure.”

Dickinson City Administrator Shawn Kessel liked the pilot project idea, saying child care is an issue in Dickinson. He said he would discuss the idea further with other city officials.

Williston Mayor Ward Koeser also was interested in the concept. A large day care provider from out of state recently tried to start a business in town but found it too cost prohibitive, he said.

“We certainly have a huge need for day care,” he said. “We have people in our community who need to work but can’t work because they simply have to stay home with kids. If we can find a solution to this problem, it helps solve some of our other problems.”

Applications for the program would need to come from local governments. Dalrymple asked the Energy Infrastructure and Impact Office to work out policies and the application process and to report back to the Land Board.

Baseball legend La Russa attends petroleum conference

Posted on May 25, 2012 by Amy Dalrymple

Tony La Russa, right, attends the CEO panel of the Williston Basin Petroleum Conference in Bismarck.

BISMARCK – The Williston Basin Petroleum Conference had a surprise guest Thursday who wasn’t on the lineup card.

Tony La Russa, a three-time World Series championship manager, attended the CEO panel to hear his friend and Continental Resources CEO Harold Hamm speak.

La Russa said he was talking to Hamm a few weeks ago about North Dakota oil development and he wanted to learn more.

The timing of the conference worked out well with La Russa’s plans to attend a Minnesota Twins game, he said.

After Hamm’s speech, La Russa planned to accompany other Continental Resources executives to tour a producing well and a drilling location north of Belfield, N.D.

“I can’t wait,” La Russa said. “I’m just fascinated by it.”

La Russa, who ranks third on baseball’s all-time wins list for managers, retired from the St. Louis Cardinals after their World Series win in 2011.

Hamm: ‘Beat Barack Obama’

Posted on May 24, 2012 by Amy Dalrymple

Harold Hamm speaks Thursday during the Williston Basin Petroleum Conference in Bismarck.

BISMARCK – Harold Hamm cut down his speech to three words: “Beat Barack Obama.”

The Continental Resources CEO who led a panel discussion Thursday during the final day of the Williston Basin Petroleum Conference said energy will play a huge role in upcoming elections.

Hamm, whose company led the way in using horizontal drilling to tap North Dakota’s oil producing potential, is Republican presidential front-runner Mitt Romney’s energy committee chairman. He said he was happy to accept the role but said it was unusual for someone associated with government to want to work with someone knowledgeable about energy.

“That’s not what happened in the past,” Hamm said. “If you knew something about it, they left you on the sideline.”

Hamm called Obama’s energy policy a failure.

“Romney has a policy of abundance,” Hamm said. “The other one is one of scarcity.”

Hamm also called for the development of major pipelines in North Dakota to reduce the price discount that Bakken crude receives in comparison to Texas oil. Hamm blames a shipping bottleneck for the discount and called for multiple new pipelines.

“We need all we can get here. We need to get rid of this differential and we’ve got to do it now,” Hamm said. “We’re way behind time on it.”

The members of the CEO panel also addressed being good stewards of the state that has become No. 2 in the nation in oil production, and dealing with problems such as truck traffic and rapid growth.

Jim Volker, CEO of Whiting Petroleum, said the future of the Bakken “just gets better.”

“It gets better for all of us,” Volker said. “It gets better for the people of the state, it gets better for state tax revenue and it gets better for all the people that we’re bringing in to enjoy the quality of life in North Dakota.”

Volker said his company is committed to being good stewards of natural resources. Whiting has a goal of zero emissions from its facilities and is working to expand natural gas pipelines to eliminate gas flaring, he said.

Hamm said Continental Resources will continue to develop drilling techniques that lower costs but also create more distance between oil wells.

“It doesn’t look like much drilling is going on but a whole lot is,” Hamm said.

Dave Roberts, executive vice president and chief operating officer of Marathon Oil, said oil companies are working to become more efficient and reduce the number of trucks on the road.

“We don’t like all these trucks on the road either, because that costs me money and we live in these communities,” Roberts said.

Oil companies want to support North Dakota communities by contributing money to community causes as well as becoming involved locally, Roberts said.

“The key thing is ask us,” he said. “Most of us are more than happy to continue to commit to the communities that are so supportive of us up here.”

Whiting has a policy of targeting new hires from northern tier states because they’re able to be closer to friends and family. That has resulted in a turnover rate of less than 5 percent, Volker said.

Roberts said he sees the oil and gas industry at a critical intersection, with how things work in North Dakota serving as a model for other states with potential oil and gas developments.

“Coming from one direction, we have this incredible gift, these revolutionary supply developments that are built on innovation and application of new technologies,” Roberts said. “From the other direction we have the significant social, environmental and geopolitical challenges that accompany this growth.

“The manner in which we respond to these two forces and navigate this intersection could ultimately lead to the success or failure of North Dakota’s oil and gas business and, indeed, the potential we see in other energy producing states,” Roberts said.

Watch video from the speech here: http://link.brightcove.com/services/player/bcpid1111563367001?bckey=AQ~~%2CAAAA_r_zxIk~%2CihBlUvKYkvGldSmEViKm5Xem1OAGWy20&bctid=1655231394001

Dave Roberts of Marathon Oil, left, and Jim Volker of Whiting address the media following the CEO panel during the Williston Basin Petroleum Conference.

Photo blog: Oil conference isn’t complete without SWAG

Posted on May 24, 2012 by Amy Dalrymple

BISMARCK – Participants of the Williston Basin Petroleum Conference each received a large reusable bag, which by the end of today will no doubt be full of bottle-openers, can koozies, pens and other freebies from vendors.

Here’s a sampling of some of the SWAG (stuff we all get):

From Whiting - the blue item is a whistle, compass and safety light

These school supplies from Hess were given to fourth-graders who toured the exhibits.

Always practical: safety glasses

Bag from Marathon, along with a whistle key chain

Hamm, La Russa appear at Kevin Cramer fundraiser

Posted on May 23, 2012 by Amy Dalrymple

Harold Hamm, center, and Kevin Cramer, left, visit during a fundraiser for Cramer Wednesday in Bismarck. To their right is Tony La Russa, a friend of Hamm's and three-time World Series champion manager. Amy Dalrymple/Forum Communications Co.

BISMARCK – The 4,000 attendees of the Williston Basin Petroleum Conference received a letter as they walked in Wednesday from Harold Hamm, chairman and CEO of Continental Resources Inc., inviting them to a fundraiser for Public Service Commissioner Kevin Cramer, who is running for Congress as a Republican.

Hamm urged people to give $1,000 to the fundraising campaign and join him for a reception Wednesday evening at the Ramkota Hotel in Bismarck. A contribution form was on the opposite side of the letter.

“Kevin is a true conservative leader and will be a strong pro-energy voice in Congress,” Hamm wrote in the letter.

Tony La Russa, a friend of Hamm’s and a three-time World Series champion manager, also attended the fundraiser. La Russa, who ranks third on baseball’s all-time wins list for managers, retired from the Cardinals in 2011.

Thomas Nusz, president and CEO of Oasis Petroleum, and Brian Lash, CEO of Target Logistics, also attended the fundraiser.

Hamm is on the conference agenda Thursday as part of the “Taking the Responsible Leadership Role in the Bakken” panel.

Cramer faces GOP-endorsed candidate Brian Kalk, also a public service commissioner, in the June 12 primary for North Dakota’s U.S. House seat.

Cramer told attendees of the conference he would “stay out of their way” and work to reduce regulations that interfere with oil development.

Tony La Russa, center, a three-time World Series champion manager who retired after the 2011 season attends a political fundraiser Wednesday for Kevin Cramer in Bismarck. La Russa, who retired from the Cardinals in 2011, attended the fundraiser with Harold Hamm. Amy Dalrymple/Forum Communications Co.

Halliburton serves thousands with barbecue food truck

Posted on May 23, 2012 by Amy Dalrymple

Brothers J.J. Miller, left, and Sam Miller, both of Denver, run the Halliburton barbecue truck.

BISMARCK – What’s more valuable to Halliburton: the company’s frack fluid recipe or its barbecue recipe?

I don’t know the answer, but I can tell you which one is tastier.

Halliburton sponsored an impressive barbecue for about 4,000 attendees of the Williston Basin Petroleum Conference Tuesday.

Crews began cooking at midnight Tuesday to give the meat plenty of time to smoke for the evening event.

The feast required 1,200 pounds of meat, 60 gallons of beans and 200 pounds of bacon and sausage for the beans.

The man behind the barbecue recipe is 30-year-old Sam Miller of Denver who used to work with hydraulic fracturing for Halliburton before he found his calling as their cook.

Halliburton’s food truck – a self-contained cooking unit with barbecue pits – travels around the country eight months out of the year for corporate and charity events. The truck is 64 feet in length and weighs 63,000 pounds.

Sam has prepared food for even larger crowds than Tuesday’s event. He served food for victims of Hurricane Katrina and Hurricane Rita.

Sam has been working with the truck for seven years and recently recruited his brother, J.J. Miller, 33, Denver, to help.

Running the barbecue truck is a lot harder than fracking, Sam said, but he enjoys it more.

“I like meeting all the different people,” Sam said.