WATCHING GOVERNMENT THE EDITOR’S PERSPECTIVE
When it comes to reporting what’s
going on in US oil and gas producing states, even the dimmest Washington, DC, reporter periodically
remembers to start by speaking
with people who are actually there.
Take North Dakota, for example.
There are perceptions that Bakken crude increasingly leaves the
state by rail because pipelines are
inadequate, that plunging global oil
prices in the last year have reduced
the Bakken boom to a mild pop,
and that gas associated with Bakken crude production continues to
Telephone conversations with
state and industry officials in North
Dakota revealed that the situation
there is anything but static. Progress is being made.
“The impact of oil prices and
the slowdown is providing a window
of opportunity for infrastructure to
catch up and get on the leading
side of that curve instead of chasing
it so hard,” North Dakota Department of Mineral Resources Director
Lynn D. Helms said.
“All of the large pipeline projects
are 2017 and beyond,” he told OGJ.
“We’re in a pretty good spot right
now because we anticipate production staying pretty flat, between 1. 1
million and 1. 2 million b/d. Because
of oil prices and the inventory of un-
completed wells, we expect that to
go on for 1½- 2 years. After that, we
could go into a higher production
mode with new pipeline capacity.”
Rail’s share of total Williston
basin crude transportation peaked
at around 800,000 b/d toward
the end of 2014, and has been
falling ever since, North Dakota
Pipeline Authority Director Justin
J. Kringstad said. Pipelines’ 46%
share nearly equaled rail’s 47% in
June, he indicted. Two projects with
capacity totaling another 675,000
b/d are expected to be operating in
2017, he added.
“We’ve seen the rig count drop
to 74 rigs now from 190 in 2014,”
he told OGJ. “Going forward, the
question will be how long these
lower prices will be going on and
what impacts they will have on
“Progress is being made on infrastructure,” North Dakota Petroleum
Council Pres. Ron Ness reported.
“The legislature put $1.2 billion in
surge infrastructure funds in the
first 30 days of its 2015 session to
assist communities. That almost
became a jobs bill when companies
had to lay off employees because of
low crude prices.”
Reduced activity still concerns
producers, “but we’re also see-
ing substantial improvements in
efficiency that companies have
implemented,” he told OGJ.
Producers asked the state’s
Industrial Commission for more time
to meet Jan. 1, 2016, flaring reduction goals. Helms said the commission agreed to give them another
10 months if they committed to
reaching higher goals then and
subsequently by Sept. 17.
A North Dakota update
Obama touts green
energy as the UK
by Bob Tippee, Editor
US President Barack Obama received more
news coverage in the US for his speech promoting renewable fuels than the UK government
did for a new step away from green-energy
The comparison offers two lessons: 1. that
of the two countries the UK is closer to an inevitable reckoning with physical and economic
reality, and 2. that trendy US media won’t
acknowledge problems with state-sponsored
“For the first time, we can actually see what
our clean-energy future looks like,” Obama said
Aug. 25 at the National Clean Energy Summit
in Las Vegas. In his view, it’s a future in which
“consumers have freedom to choose cleaner,
cheaper, more efficient energy.”
Where politically preferred energy already
has been tried, however, results aren’t quite so
With costs of subsidizing wind and solar
energy in the UK exceeding projections and
electricity prices punishing consumers, the
Department of Energy and Climate Change on
Aug. 27 proposed to slash subsidies for new
roof-top solar systems and small windmills.
The government earlier had announced
plans to cut subsidies for onshore wind generation and large solar installations.
The DECC said its latest proposal aims “to
place policy costs on bills on a sustainable
footing, improve bill-payer value for money, and
limit the effects on consumers who ultimately
pay for renewable energy subsidies.”
Experience thus shows “what our clean-
energy future looks like.” It’s intolerably
The ever-confident US president might argue that UK grief results from flaws of program
design or implementation. But how can he say
his program—based as it is not only on boosting renewable energy but also on displacing
commercial energy now in place—would be
superior in concept or execution?
In fact, he cannot.
State manipulation of energy markets always
creates havoc in economies and administrative systems. It therefore always fails. Obama’s
manipulation is extreme. Consequent problems
will be extreme, too.
Experience, most recently in the UK but
also in US history, makes this clear. It should
make the news.
(From the subscription area of www.ogj.com,
posted Aug. 28, 2015; author’s e-mail: bobt@