You are here: Home Columns New Energy Economics New Energy Economics: North Dakota Energy Impact Symposium
Document Actions

New Energy Economics: North Dakota Energy Impact Symposium

Cole Gustafson, NDSU Biofuels Economist Cole Gustafson, NDSU Biofuels Economist
These are exciting times in North Dakota for traditional petroleum, as well as new biofuel industries.

By Cole Gustafson, Biofuels Economist

NDSU Extension Service

On March 14-16, I participated in western North Dakota’s Energy Impact Symposium. This event was a collaborative effort among Dickinson and Minot State universities and the Great Plains Energy Corridor. The meeting was the first of a four-part series that is designed to bring the energy industry, government officials, educators, students and the general public together to address the state’s energy development environment.

Gen. Charles Wald, director and senior adviser to the aerospace and defense industry practice for Deloitte LLP, provided a keynote address. Wald described the importance of oil security as our best national defense. He noted that 80 percent of the products moved in the Mideast war are petroleum fuels for military operations. The fuel is so costly that the final delivered price is near $45 a gallon. Unfortunately, 80 percent of our troop losses occur delivering this fuel because of roadside bombs and other obstacles.

Fred Joutz, director of the Research Program on Forecasting and member of the Elliot School’s Institute for International Economic policy at George Washington University, described recent energy trends and noted that U.S. oil production has trended down for the past decade but has increased during the past two years. The reason for the increase has been the growth of North Dakota’s oil production.

On the energy demand side, Joutz said China and India have surpassed the United States in energy consumption. China is growing so fast that it is adding the equivalent of Germany’s entire national energy consumption annually. His research has found that current oil prices contain a “war” premium of $10 per barrel. In other words, oil prices would be $70 instead of $80 if the Mideast was stabilized. Finally, he described the impact oil development will have on North Dakota’s local economies. In particular, he forewarned that increased development would stretch local labor resources, housing and public infrastructure as the local entities try to keep up with the growth of the energy industry.

Hillary Huntington, Stanford University’s Energy Modeling Forum executive director, reviewed several aspects of national oil policy. To achieve total energy independence in the U.S. by 2030, oil prices would have to rise to $140 per barrel. At this rate, oil imports would fall to zero. In addition, very large subsidies would be needed to stimulate domestic production and very large tax increases would be needed to increase energy efficiency. Gasoline prices would rise from $2.70 per gallon to $4.40 per gallon. He has determined that nine out of the last 10 national economic recessions have followed large oil price increases. The cost to society is estimated to be $5 per barrel.

Patrice Lahlum, Great Plains Institute consultant, and Bruce Hicks, North Dakota Industrial Commission Oil and Gas Division assistant director, provided a nice overview of North Dakota’s renewable energy and oil industry. Lahlum described existing biofuel producers in the state and programs designed to support them. One program that she is actively involved with is the Biomass Crop Assistance Program. I am going to write a future article on this topic.

Hicks stated that 12 new wells are added each year in North Dakota. The total oil rig count is 104, with more than 90 percent of these wells horizontally drilled. All new wells are in the Bakken region. In total, North Dakota is producing 250,000 barrels per day and is expected to peak at near 400,000 barrels per day.

My presentation at the event was to provide an overview of the University of North Dakota’ and North Dakota State University’s energy programs. This was especially challenging because I had 15 minutes allotted. I started with an overview of UND’s programs at the Energy and Environmental Research Center and focused on its14 centers of excellence. I noted the strong collaboration that exists between UND and NDSU because the institutions have partnered on several grant projects.

I highlighted NDSU’s production research on biomass varietal trials, densification technology and coproduct use. I then highlighted NDSU’s efforts to support the development of two specific projects for 2011. These are the development of a biomass processing infrastructure to support a new combined heat power facility near Spiritwood and the creation of a new energy beet for the biofuel industry.

Biomass infrastructure includes the formation of a biomass testing laboratory, market quality standards, searchable inventory, risk management strategies and a grower organization.

The energy beet project will conduct varietal trials in new producing regions, evaluate new juice storage methods, design new logistical and transportation strategies, and organize groups of producers in new dryland and irrigated production regions.

These are exciting times in North Dakota for traditional petroleum, as well as new biofuel industries.

NDSU Agriculture Communication

Source:Cole Gustafson, (701) 231-7096,
Editor:Rich Mattern, (701) 231-6136,
Renewable Accounts: Renewable Accounts: E15 fuel could help you, the environment and N.D. farmers  (2019-06-06)  The EPA now allows E15 fuel to be sold year-round.  FULL STORY
Prairie Fare: Prairie Fare: Enjoy Lounging Outdoors With a Refreshing Beverage  (2019-06-13)  If plain water is kind of boring, try infusing it with fruit and/or herbs.  FULL STORY
Use of Releases
The news media and others may use these news releases in their entirety. If the articles are edited, the sources and NDSU must be given credit.

Powered by Plone, the Open Source Content Management System