From the pages of North Dakota LIVING...
Oil boom triggers co-op's growth surge

(This article is a condensed version of a story that ran in the March 2011 edition of North Dakota LIVING, to read the full story and more about other North Dakotans subscribe today!)

Rory Nelson is among the 320 Hess Corporation employees working in North Dakota. (photo by JC Balcom)

by Candi Helseth

Hess Corporation, based in Houston, Texas, is the largest gas producer and the third largest oil producer in North Dakota. And with a history in North Dakota dating back to 1951, the company continues to grow.

The largest energy consumer on the Mountrail-Williams Electric Cooperative (MWEC) line, Hess will triple its consumption when the current expansion of the Hess Tioga Gas Plant is completed, according to the plant’s manager, Rory Nelson. Only four years ago, MWEC’s total electric demand was 40 megawatts; the expanded gas plant alone will use 40 megawatts.

MWEC expects overall electrical demand to increase to 200 megawatts within five years due to oil activity in the Bakken Formation, said Assistant General Manager Mark Holter. For Holter, a Williston-area native and MWEC employee since 1978, and Nelson, a petroleum engineer and Hess employee in northwestern North Dakota since 1983, the workload just keeps growing and growing.

“This time is different than the ’80s boom,” Holter said. “The technology is more advanced so they hit a well every time they drill, which means demand increases even more. There are a lot more oil companies and service companies working in this area. And the Bakken Formation is huge. We don’t see our demand even letting up for at least 10 years.”

In addition to new buildings requiring electrical service, every well being drilled in the Bakken Formation needs electrical power. Many oil companies are paying $400 per day to operate wells temporarily on generator power while they wait for MWEC to establish electricity at the site. Some wells are as far as six to seven miles away from a major electric line. Hess was among seven oil leaders that agreed two years ago to loan MWEC $14.5 million at 0 percent interest over a period of seven years to build 32 miles of transmission line and construct a substation south of Stanley.

Despite their best efforts, Holter said, the list just gets longer. Last summer, MWEC began the season 200 wells behind. It hired five out-of-state contracting companies to provide an additional 200 employees.

“And now we’re 380 wells behind,” Holter said ruefully. “Every month, we have another 80 locations that want electricity.”

Still, Nelson said, MWEC is doing a good job. “They have a huge challenge. They’ve always taken good care of the Tioga Gas Plant and they’ve made it a priority to give us reliable, stable power. We’re confident they’ll be ready as our power loads keep going up. We’re moving more and more to electric as we add new technologies.”

“This is just going to keep going,” Nelson said. “The Bakken production surpassed all other Hess production last year. In my opinion, the Bakken oil boom is here for a long time to come.”

Candi Helseth is the co-owner of WriteDesign in Minot.