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Oil and Wind Energy: North Dakota Update. Dr. Cole Gustafson Feb. 9 , 2011. North Dakota Production. July 2010 – 321,042 BOPD July 2010 – 320,371 MCF/D 5,051 Producing Wells. Courtesy: Neset Consulting. Williston Basin Deposition - ND. Courtesy: Neset Consulting. Relative Thickness.

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Oil and Wind Energy: North Dakota Update

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Oil and wind energy north dakota update l.jpg

Oil and Wind Energy: North Dakota Update

Dr. Cole Gustafson

Feb. 9, 2011


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North Dakota Production

  • July 2010 – 321,042 BOPD

  • July 2010 – 320,371 MCF/D

  • 5,051 Producing Wells

Courtesy: Neset Consulting


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Williston Basin Deposition - ND

Courtesy: Neset Consulting


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Relative Thickness

Courtesy: Neset Consulting


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ND Bakken and Three Forks

Courtesy: Neset Consulting


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Mud Motors

Drillpipe

Courtesy: Neset Consulting

Non-magnetic Drill Collar

Bent Sub

Mud Motor

Rotating Sub


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Rebuild Gravel Road

$300,000/mile

Road Repair

Paving $1,000,000 / mile

Graveling

$3600 /mile

Courtesy: Neset Consulting


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Farm Windmill--Aermotor


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262 ft

242 ft

Overall Diameter

Incl. Hub: 252 ft


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Wind Generation in North Dakota

  • Operational:

    • Turbines770

    • Rated Capacity1223 Mw

  • Under Construction:

    • Rated Capacity76 Mw

  • Planned:

    • Rated Capacity6684 Mw


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Power Generation Capacity in North Dakota

MegawattsPercent

  • Wind1223 21

  • Hydro-Electric 515 9

  • Coal-Fired407170

    Total5809 100


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Some “Back-of-the-Envelope” Numbers…

Rough Cost at 39% Capacity Factor: ¢/kWh

Capital Cost ($2.2Million/MW, 6%, 23 yrs): 5.2 ¢/kWh

Land Lease: 0.1 ¢/kWh

O&M / Insurance: 0.9 ¢/kWh

Property Taxes: 0.2 ¢/kWh

Total Estimated Cost: 6.4 ¢/kWh

Less Offsets…

Production Tax Creditor 30% Treasury Grant

Accelerated Depreciation

Renewable Energy Credit Sales

Net Cost After Tax -- Less than 4¢/kWh


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Local Economic Impacts - Langdon

  • 106 1.5mw towers

  • $500 million investment, $1 million lease payments, $456,000 local tax payments

  • Met tower (2004), FPL (2006)


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Wind - Local Government Issues

  • Large Wind – Infrastructure, labor, housing community services

  • Small Wind – Zoning, siting, setback, inspections, complaints, decommissioning

  • Taxation/investment

  • Purchasing – How much?

  • Generation – Where? Size? Own/Contr.?


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www.ndsu.edu/energy

  • Common Landowners Questions on Wind Lease Contracts

  • Basics of Farm/Residential Small Wind Turbines

  • Wind Energy Development: Key Financial Considerations

  • Managing Your Expectations - Sizing a Small Wind Turbine To Your Land

  • Understanding Wind Energy Leases

  • Public Involvement and Land Issues Relating to Wind Projects


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Questions?

Cole.gustafson@ndsu.edu

701-231-7096


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Investment & Risk Comparison

Project Developer

  • Transmission Risk

  • 2-3 years wind studies

  • Engineering $$$

  • Permitting Risk

  • Operating Risk

  • Market Risk

  • Tax Risk

Landowner

¼ to ½ acre ofland per turbine

Revenue:

$4-$6000/turbine/yr

Cost: $3-5 Million/turbine


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Gas is a likely partner for wind energy

Wind will displace the system’s highest cost fuel

Fuel Cost of Electricity…


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6 - 8 MPH

Cut-in

1475 kW @ 26 MPH

250 kW @ 13 MPH

Power Curve:Generation vs Wind Speed

Reaches Rated Capacity

at 26 - 31 MPH

56 - 62 MPH

Cutout


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