SCHMID: LOOKING BACK FROM THE LEFT COAST - JANUARY 18, 2021
GOOD JOB! As of Wednesday, ND was the second lowest state (Hawaii the lowest) for active coronavirus cases per capita and was the tenth lowest state for deaths (both are 7-day averages). However, ND and SD tied at sixth for the highest total deaths per capita — they were exceeded only by five states in the northeast. In ND, 60% of total deaths were in nursing homes. Virus infections are still at a high level in Minnesota — on Thursday, 1,600 new cases and 43 deaths were announced.
DON’T PANIC YET If oil prices don’t improve during the 2021-23 budget cycle, ND could be left with a $920 million gap in Governor Burgum’s budget. This warning came from state budget analyst Allen Knudson. Analysts from IHS Markit indicated there may be a way out. They see a few rough months ahead for oil prices, but recovery later in the year. Legislators seemed confident they have time to deal with the problem — if, near the end of the 2021 session, they don’t forsee an improvement in oil prices, they will trim expenses. With five months to go in the 2019-2021 cycle, revenues were still over 2% ahead of forecast.
UNEXPECTEDLY DECENT was the consensus about 2020 farm income. ND started out the year with a hangover from a disastrously wet fall in 2019. Then the pandemic depressed the outlook further. But good weather through much of the crop cycle helped yields and, by the end of the year, crop prices had risen for several reasons. A hurricane destroyed 20% of the corn and bean crop in Iowa, Illinois and Indiana. China was a strong buyer — corn and soybean prices climbed 20%. Unprecedented federal assistance pushed national farm income to the third-highest level ever.
COAL CREEK UPDATE Unless new ownership is found, ND’s largest coal-fired station and the 740 jobs it supports come to an end in 2022. Lt. Gov. Sanford, representing the state, and spokesmen for owner Great River Energy say there are four or five serious and qualified parties who have expressed interest and are conducting due diligence. There is a much greater level of optimism than nine months ago. Yet, healthy skepticism remains because a new owner can only make Coal Creek viable by employing unproven technologies. June is the drop-dead date for a decision to buy the plant.
BEGGAR THY NEIGHBOR Mike Brandenburg is a farmer-legislator from Edgeley, ND, who believes five coal producing counties are engaged in a futile attempt to save coal energy. They are thereby hurting development efforts in the other 48 counties. He said here are the fundamentals: The cost of producing a ton of coal is $35, the wind and natural gas equivalents are $25 and $18, respectively. In McLean County supervisors tried to rescue coal by a moratorium on wind farms which Great River Energy wanted to develop there. GRE then moved the wind farm development to Minnesota. Brandenburg says that “jeopardizes present and future ethanol, soybean and other ag processing prospects in the state.”
A START ND has been slow to find value-added uses for the oil and gas it produces. Bakken Midstream Natural Gas, backed by ND business leaders, has plans to develop the $400 million Williston Basin Energy Center near Williston with a utility partner. The power plant will burn ethane, a 20% component of raw natural gas. Pipelines will be required to transport ethane to the power plant from processing plants in the region. The developer has yet to secure a purchaser for the plant’s power output.
THE DETROIT RAILROAD A figurative drug railroad ran from Detroit to the Fort Berthold, Turtle Mt. and Spirit Lake Indian reservations in ND. Twenty-six people face federal charges for trafficking tens of thousands of oxycodone pills from 2015 to 2020. Seven members of the drug gang were out-of-state residents, mostly Detroit, while the remainder were tribal members recruited to sell the drugs. Many of the gang’s tribal members were addicted women.
ROAD TRAINS were the subject of discussion at the ND House and Senate Transportation Committees. Road trains generally consist of a semitractor pulling multiple trailers — a practice used in rural Australia. Generally, trucking companies support the concept, while labor unions oppose it (fewer drivers). Federal restrictions on truck length and weight on Interstates 29 and 94 need to be amended to allow road trains. A pilot program would be a good way of testing the pros and cons of road trains.
THE NINTH FEDERAL RESERVE DISTRICT includes the Dakotas, Minnesota, Montana and parts of Wisconsin and Michigan. District President Neel Kashkari is completing his first 5-year term and there has been speculation about whether he would be appointed for another 5-year term. That speculation ended when ND Gov. Doug Burgum “let the cat out of the bag” during his keynote speech at the Minneapolis Fed’s annual regional economic conditions conference. Burgum congratulated Kashkari and told him “you’re doing a fantastic job.”
MINNESOTA BORDER CITIES have been suffering because of the uneven pandemic restrictions between Minnesota and North Dakota. Last week it was mentioned that the GF Herald in an unusual editorial criticized the Minnesota governor for bar and restaurant restrictions that could be fatal for certain Minnesota businesses on the ND border. This week, a letter from Shannon Full, CEO of the F-M Chamber of Commerce, had a similar tone. The letter said these establishments were a very small part of the coronavirus problem, but were bearing a big share of the cost of restrictions. She urged the Minnesota governor to allow more localized decision making. Monday, the governor eased the restrictions on bars and restaurants.
DAKTOIDS: Recent federal legislation provides for the sale of 93 acres of Badlands U.S. Forest Service land near Medora to the T. Roosevelt Presidential Library — this clears a major hurdle for the library.
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