Jill Schramm/MDN Participating on an oil industry panel at the Western Dakota Energy Association conference in Minot Oct. 9 are, from left, Kent Kirkhammer with NewKota Services & Rentals, Danette Welsh with ONEOK and Josh Demorrett with ConocoPhillips. At right is moderator Brady Pelton with the North Dakota Petroleum Council.

Issues of workforce, innovation and Measure 4 drew attention at the annual meeting of the Western Dakota Energy Association in Minot Wednesday and Thursday.

Sens. David Hogue, R-Minot, and Brad Bekkedahl, R-Williston, WDEA’s Outstanding Public Official award recipient for 2024, discussed steps the Legislature may need to take in potentially raising taxes or cutting other funds to political subdivisions to generate more than $3 billion to replace property taxes if Measure 4 passes on Nov. 5.

The impact of Measure 4 on school districts also was a concern for members of a Thursday panel.

“We already have issues with aging buildings and infrastructure,” said Rep. Anna Novak, R-Hazen. “The smaller rural schools have a difficult time finding funds to pay their regular bills and for salaries for the teachers. If this measure passes, it’s going to impact rural schools more than the large towns.”

Rep. David Richter, R-Williston, said the elimination of the ability to levy will hurt schools that haven’t levied the full 10 mills for their building funds. The Legislature is only obligated to replace the amount levied in 2024, leaving districts locked in at those levels, he said.

Smaller districts that don’t have high valuations in their property bases particularly will be hurt, he said.

“Some of the schools have to save up in that building fund two or three years just to replace the boiler system,” Richter said. “What they can generate off of that is very little, and now we are going to freeze them.”

It will be a legislative decision whether the state will pay for district building projects if Measure 4 passes, he said. One school alone is looking at a $160 million project, he said.

It’s been estimated around $400-$500 million in deferred maintenance also exists in the K-12 school system, Richter said. This comes on top of rising transportation and bus replacement costs, he said.

Matt Johnson, with North Dakota Local Technical Assistance Program, reported $1 billion in funding needs exist for bridges across the state. Political subdivisions have 103 bridges that have closed and 749 that are posted with weight limits due to insufficiencies, he said.

“The biggest thing when it comes to bridges, when it comes to road improvements, is having that consistent funding source to help us come up with a plan,” said Ward County Highway Engineer Dana Larsen, who served on a transportation panel. Contractors, who have been hard to find, don’t want to be busy with jobs one year and laying off employees the next, he said.

“Contractors, if they know there’s going to be consistent money for projects going forward, they’ll gear up. They will bid,” Larsen said.

An oil industry panel addressed workforce, mergers and regulations.

Kent Kirkhammer, president/CEO of NewKota Services and Rentals, Minot, said competition for employees has heightened since the pandemic.

“What we’ve done as a company,” he said, “is really just focus on the culture of the company, making sure that it is a good place to work, showing that we actually care about the employees.” Showing employees they can advance their careers with the company also is an enticement, he said.

Josh Demorrett, director of State Government Affairs for the Rocky Mountain Region at ConocoPhillips, said one of the biggest industry struggles is keeping up with government regulations.

“North Dakota is a friendly place to do business,” he said. “Our bigger challenges come from Washington.”

With administration changes, policy changes tend to follow pendulum swings, Demorrett said.

“Staying on top of all of those things becomes a struggle. Also keeping an eye on regulation coming from other states,” he said. However, regulation of the industry needs to happen, he said.

“It’s smart regulation that we’re keeping an eye on,” he said. “We have ways that we can work together to reach good policy decisions in the states where we operate.”

Danette Welsh, director of government relations for ONEOK, described the positives of mergers her company has been part of, including leveraging market opportunities.

“Being able to hit the market more effectively, more efficiently, and to provide more benefit to the producer, which ultimately returns to the mineral holders, all those interest groups and stakeholders – that really does have an impact on the long term,” Welsh said.

Attendees heard about positive activities happening through the Energy & Environmental Research Center in Grand Forks.

Darren Schmidt, assistant director for Energy, Oil & Gas, spoke about successes seen with new Polar Bear technology for reducing flaring.

“The industry has largely kept up with the gas capture rules set by the state and today we are at 5 percent flaring,” Schmidt said. “Understanding where that 5 percent gas is being produced and how to reduce that gas is what Polar Bear is about.

“We’ve gotten eight patents on this technology,” he added. “We’re building the first units and they are rolling out this year.”

EERC also has developed the intelligent Pipeline Integrity Program (iPIPE), which utilizes satellite technology to identify leaks.

“What we’re able to discern from that work is that we’re finding the leaks first, so no longer is the landowner the first line of defense in this equation. Through this technology, we find the leaks first and we find the leaks that you can’t normally see,” Schmidt said. “It’s a giant leap forward in leak detection technology.”

John Hamling, assistant vice president of Strategic Partnerships at EERC, said strides have been made in enhanced oil recovery (EOR) research.

“We’ve been able to have some pretty significant accomplishments this far. When we started we weren’t sure that EOR was even a possibility,” he said. “But we’ve had a lot of technical successes.”

Rich gas, which includes methane, ethane and propane, behaves similarly to carbon dioxide when injected into wells, he said.

“Using rich gas, or CO2, we can move oil that would not have otherwise come out of the formation and produce it. We’ve been able to show that we can produce incremental oil,” Hamling said. “We’ve very, very close to the first commercial success.”

However, he noted if the state captured all its rich gas and CO2 and developed the transportation and compression capability, it still would be short of the amount needed. Within a couple of decades, North Dakota will need five times more CO2 than it currently produces to offset natural well production decline in the Bakken, Hamling said.

EERC also is studying underground salt caverns that are deep enough for storage of natural gas liquids and hydrocarbons. The caverns would address limitations of pipeline export capacity by providing temporary storage, Hamling said.

Yet another area of research is critical minerals, which have been found in commercial concentrations, particularly in southwestern North Dakota. Critical minerals are used in items such as computer chips, cars, medical devices and even fighter jets. The United States currently relies on foreign countries for 50% of its critical minerals, with China as the world’s major producer, Hamling said.