Energy Shifts & North Dakota’s future
BY SID PRANKE
Recent headlines in North Dakota can send mixed messages when it comes to predicting the direction of North Dakota’s energy future – “Demand for electricity in Oil Patch projected to triple;” “North Dakota lags at bottom in energy efficiency study;” “Warm winter forecast, low natural gas prices expected to help keep heating costs down.” And all those headlines happened only in the past two months.
Much of the increased demand for electricity in the Bakken will be from industrial usage – high estimates are for 40,000 oil wells in the Oil Patch by 2032. According to Dale Haugen, general manager of the Mountrail-Williams Electric Cooperative in Williston, every oil well requires the same electricity as three farmsteads.
Where is the oilfield electricity used?
The mechanisms that “get oil and gas out of the ground and then transport it to where it needs to go” will create the larger electrical needs in the Oil Patch, said Mike Wamboldt, director of energy services for KLJ in Bismarck.
Wamboldt was project manager of the recently-released study “Williston Basin Oil and Gas Related Electrical Load Growth Forecast” and KLJ participated at a recent energy conference that focused in part on the jobs and industry that natural gas is expected to create here, and the efforts to keep those resources in the state.
Well pumps, pipelines, oil booster pumps, compressor stations, heaters, transfer pumps all run on electricity, Wamboldt said. “Generally, they (oil producers) try to hook up well pumps to the electrical grid as soon as they can. Quite often, once they get the well in the ground they’re operating off of diesel generators until the electrical utility can get out there and get them hooked into the grid.”
Electrical production now
According to a North Dakota State University Central Grasslands Research Extension Center energy report, coal-fired plants now produce the bulk of electricity used in North Dakota.
That holds true for Basin Electric Power Cooperative, which serves 2.8 million electric customers in nine states, including western North Dakota and eastern Montana.
Basin Electric’s most recent statistics for the source of energy generation capacity break down as follows:
• 60.2 percent comes from coal – either from plants the cooperative owns and operates or bought from other plants
• 14.7 percent comes from renewables (including wind power)
• 9.1 percent from natural gas-fired stations
• 6.1 percent hydro generation
• 1.5 percent nuclear
Shift to Natural Gas
Industry forecasters predict a shift away from coal and toward natural gas, and oil companies seem to have a jump on the trend.
As Rocky Mountain Institute co-founder and scientist Amory B. Lovins writes in the 2011 book “Reinventing Fire:” “Many oil companies seem ahead of their counterparts in the older and more traditional coal industry, which is already losing to natural gas for electricity generation and could be entirely replaced by renewables and gas in the U.S. by 2050.”
KLJ’s Wamboldt said it’s a big issue right now. “The electrical utilities are currently in the process of putting together plans to deal with the increased demands. From what I’m seeing in the industry, we’re seeing more and more regulatory scrutiny on the coal and an increased supply of natural gas from these shale plays,” he said. “We’re starting to see a huge resource in natural gas, so right now it appears there’s a tendency to move toward natural gas-generated power.”
In preparing for the increased demand in western North Dakota, along with increased natural gas usage, the future is right now.
Basic Electric spokesman Daryl Hills said the group has two natural gas stations under construction, one west of Watford City and one northwest of Williston. Both facilities will be used to produce electricity, he said.
“There is a growing demand for electricity in western North Dakota and eastern Montana and it’s growing at a fairly quick rate. One of the quickest ways to meet that demand is to build gas-fired generation stations, like we’re doing,” Hill said.
Construction began last June and the facilities will be up and running by mid-2013, he said.
The gas used at Basin Electric’s new western North Dakota plants will be piped in on existing pipelines, Hill said.
Unlike the relative speed of natural gas startups, the decision to use coal would take longer. “It’s different if you’re going to build a coal plant, because it just takes longer to do the permitting. It takes longer to do the construction,” Hill said.
As the Bakken market moves toward cleaner, plentiful and less costly natural gas, the state could be seen as dragging its feet on energy efficiency initiatives.
That’s especially noticeable reviewing the results of the 2012 energy efficiency nationwide report by the American Council for an Energy-Efficient Economy (ACEEE). North Dakota came in at the bottom of the study’s ranking, ahead of only Mississippi.
North Dakota’s highest-ranked neighboring state was Minnesota ranked at No. 10 overall.
The report ranks states on energy efficiency policy and program efforts; it documents best practices; and provides ways for states to improve its overall energy efficiency.
The report stated that while North Dakota (along with Kansas and Wyoming) was not among the most-improved states since last year’s report, it did improve its score “significantly on a percentage basis.”
The ACEEE report recommends ways for states to improve its overall ranking:
• Put in place and adequately fund an energy efficiency standard or similar savings target.
• Adopt updated building energy codes and enable the involvement of utility program administrators in building code compliance (since buildings consume more than 40 percent of total energy).
• Adopt stringent tailpipe emissions for cars and trucks.
• Put in place sustainable funding for state government-led energy efficiency incentive programs; invest in energy efficiency-related research, development and demonstration centers.
Twenty-four states have adopted and adequately funded an “energy efficiency resource standard,” which sets long-term energy savings targets and drives investments in utility sector energy efficiency programs, ACEEE states in its report.
To see the online report, visit aceee.org/research-report/e12c.