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Fuel shortages a big problem in the Dakotas


SIOUX FALLS, S.D. (AP) — Fuel


shortages that often occur during the busy fall harvest season in the Dakotas have reached levels not seen in years, industry offi cials said. Gasoline and diesel shortages


at fuel terminals throughout much of the Dakotas and into Minnesota have fuel truck drivers sitting in line for hours, waiting for fuel to arrive via pipeline. South Dakota Gov. Dennis Daugaard and North Dakota Gov. Jack Dalrymple both have relaxed service hour restric- tions for commercial fuel truckers. “This is worse than 2007-08,” director of the


Dawna Leitzke,


South Dakota Petroleum Market- ers Association, said. “That was a supply nightmare. This is quickly escalating to a worse situation.” Four years ago, refi nery outages


were largely to blame for fall fuel shortages in the region. North Da- kota Petroleum Marketers Associa- tion President Mike Rud said earlier this fall that a refi nery maintenance shutdown in Montana was partly to blame for low supplies, but this year there also are other factors. An early harvest in South Dakota put farmers into competition for diesel fuel with their counterparts in other states. There is a big demand from vehicles in the booming oil patch in western North Dakota, and work related to major fl ooding in the two states this year also has eaten into supplies. Even in a normal year, South


Dakota petroleum dealers will journey as far as Kansas and Okla- homa for gasoline and diesel to keep their customers supplied, Leitzke said. This year, the fuel is becoming even harder to fi nd. Dean Koch,


energy division


manager for Central Farmers Co- op, drove by the huge Magellan Midstream Partners fuel depot in Sioux Falls in early November. “There wasn’t a truck in the


place,” Koch said. “No gas. No diesel.” Spokesman Bruce He- ine said pipeline companies are scrambling to keep up. “This is not an issue of infra-


structure that failed,” he said. “The demand has just been very high.”


BAKKEN NEWS


Former N.D. Governor Schafer joins oil company board


By DALE WETZEL Associated Press


Schafer has joined the board of Conti- nental Resources Inc., the state’s larg- est oil producer, months after he led an unsuccessful public campaign to prod the Legislature into cutting oil tax rates. Schafer, a Republican who was gover-


nor from 1992 through 2000 and served as U.S. agriculture secretary in 2008, had begun a statewide tour pushing for lower oil taxes began last January, supported by Continental and other oil companies.


We wanted someone who had a very strong heritage in North Dakota, that knows the state as


well as he does. – Cheif executive of Continental Harold Hamm


sation,


shares of Continental stock over four years. The shares would be worth more than $770,000 based on the Nov. 7 stock price of about $65 a share. Schafer and Harold Hamm, the


chairman and chief executive of Enid, Okla.-based Continental, said there was no relationship between Schafer’s ad-


As part of his director’s compen- Schafer is receiving 11,945


Former North Dakota Governor Ed


vocacy of overhaul- ing North Dakota’s oil tax structure and the decision to put him on the company’s board. Hamm said in


exemptions — and lowering its top tax rate. The Republican-controlled Legis- lature did not endorse any major oil tax overhaul, and left the state’s top rate on production untouched at 11.5 percent. The former governor also had ex-


a telephone inter- view that he had wanted to expand Continental’s board with a North Da- kota director, given the state’s increasing importance to the company’s business. The com- pany plans to invest $950 million in North Dakota next year alone, out of a budget of $1.75 billion, Hamm said. “We wanted someone who had a


Schafer


pressed concern that state govern- ment was becoming too dependent on oil revenues, which he said were jacking up state spending dramati- cally. General fund spending for the North Dakota government has dou- bled,


tax reductions as governor, and as chairman of the Interstate Oil and Gas Compact Commission,


very strong heritage in North Dakota, that knows the state as well as he does,” Hamm said. “We wanted someone of his character and conservative val- ues ... We felt he would be a natural.” In August, the latest month for which statistics are available, western North Da- kota’s oil-producing region pumped an average of 445,000 barrels of oil each day, according to the state Department of Min- eral Resources. Hamm said Continental now produces about 39,000 barrels of oil daily, or almost 9 percent of that total. Hamm said he approached Scha- fer about joining the board in May, after the oil-tax campaign had end- ed and the North Dakota Legisla- ture had fi nished its regular session. Schafer had advocated simplifying


North Dakota’s oil tax structure — which contains an assortment of incentives and


is a group of oil-producing states. “I’ve been championing the en-


ergy industry in North Dakota for 20 years,”


Schafer’s appointment to the Con- tinental board was “maybe a lit- tle bit more than a coincidence.” “He was the public face of their ef-


forts to reduce oil extraction taxes in North Dakota,” Schneider said. “Did that give him the inside track to be on the board? I’d guess probably so.” Schafer said he did not know the six outside members of Continental’s board, which includes David Boren, the president of the University of Okla- homa and a former Oklahoma gover- nor and U.S. senator. He has not previ- ously been a Continental shareholder.


Basin to make move into Bakken


By LAUREN DONOVAN Bismarck Tribune


A major player in Coal Country is


poised to make a move into the Bakken. Basin Electric Power Coopera-


tive, owner of two coal-fi red power plants, plans to build a 190-mile, 345- kilovolt transmission line to fuel a growing demand for the raw electric- ity that keeps the oil boom turning. Basin’s


in-house projections show


that by 2025, demand for electricity in the oil patch will increase another 1,300 megawatts, or about one-fourth of all power produced now in North Dakota. The new line, as proposed, will run


from the co-op’s Antelope Valley Sta- tion in the heart of Coal Country to the Williston and Tioga region, served


by Mountrail-Williams Electric Coop- erative, where nearly 90 rigs are drilling. Bismarck-based Basin has applied for


fi nancing from the Rural Utilities Ser- vice, an agency of the federal Depart- ment of Agriculture, which requires an environmental assessment of the project. The agency will hold public scoping


meetings to get comments on three pro- posed corridors for the line that will run through Mercer, Dunn, Billings, McK- enzie, Williams and Mountrail counties. Mike Risan, Basin’s vice president of


transmission, said the co-op needs to move thoughtfully into the Bakken region. “At this point, we’re basically playing


catch-up since the load has developed so quickly,” he said. “As we move forward, we are addressing the issue with a phased approach to avoid the possible risk of


overbuilding the transmission system in the event the rate of growth diminishes.” Besides the new transmission line


— Basin’s fi rst solely owned line going into the northwest oil patch region — the co-op announced Nov. 10 that it also plans to build its fi rst natural gas peaking plant in North Dakota in the oil patch. Pending successful applications, a 70-


megawatt generating station using natu- ral gas as fuel will be near a natural gas gathering and processing plant to be con- structed by ONEOK Partners near Wil- liston, said Basin spokesman Daryl Hill. He said the facility will have technology


to allow it to either generate electricity or to support voltage and prevent fl uctuations. (Reach reporter Lauren Donovan at 220-5511 or lauren@westriv.com.)


thing wasn’t anything new for me.” North Dakota state Senator Mac D-Grand Forks,


Schneider, said Schafer said. “The tax which


since the state’s 2005-07 budget period. Schafer said he also backed oil


from $2 billion to $4 billion,


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