EDGELEY, N.D. - Mike Brandenburg says this is the first year his family has had to dry almost every bushel of soybeans and corn they've produced on their farm near Edgeley.
For farmers, the difference between the past and today is corn, Brandenburg points out.
Ten years ago, the Dakotas and northern Minnesota raised an average of 100- to 150-bushels per acre corn. Today, many farmers are raising 150- to 200-bushels per acre. "With the genetics that are coming into play, I could see us, on a consistent basis, going to 200- to 250-bushel (per acre) corn," Brandenburg says.
He and three sons, Micah, 41, Marcus, 40, and Derek, 31, and their families each have their own land, but they farm in collaboration, sometimes sharing lease or share equipment.
Going forward, as farmers move toward growing longer-maturity corn that produces higher yields, industry will need more drying capacity. Micah Brandenburg thinks it could be feasible to install conversion equipment that would allow a farm grain dryer to switch back and forth between LNG and propane. And his father thinks it's time to link up supply and demand.
Along with farming, Brandenburg is a Republican state representative from Edgeley, south of Jamestown, N.D. His District 28 includes Emmons, Logan and McIntosh counties, and parts of Dickey, LaMoure and Burleigh counties. He is serving on an interim committee looking at ways to finance a plan to move the natural gas that is a byproduct of oil production from the west to the demand in the east. Such a plan, which could be taken up by the 2021 Legislature, would serve the whole state but would be especially helpful to eastern North Dakota, where it is needed for corn drying as well as for processing industries.
Considering the Legacy Fund
Brandenburg says he thinks one possible option is to build off the Northern Border Pipeline south of Burleigh County (Bismarck) and down into McIntosh County (Ashley).
"The market for (liquid natural gas) is really in the eastern part of the state," where it needs to be distributed, he says.
One solution legislators are considering to pay for such a system is using the state's Legacy Fund, a pool of money financed by a share of the state's oil and gas revenues that voters approved in 2010. The fund's principal can be tapped only by a vote of two-thirds of both legislative chambers. The plan would use up to $100 million in interest proceeds of Legacy Fund money per biennium for a grant program to incentivize the development of processing and distributing liquid natural gas production in the state.
Among those from eastern North Dakota interested in the idea are state Sen. Jim Dotzenrod, D-Wyndmere, Rep. Alisa Mitskog, D-Wahpeton, and Sen. Terry Wanzek, R-Jamestown.
Wanzek says the general concept of using Legacy Fund money "seems to make sense," but there are still questions and details to study. Using the Legacy Fund could be needed to spark an expanded state liquid natural gas industry that would add value to the oil and gas industry, as well as the agriculture industry.
"Every year, with the mixture of crops we're growing, it's hard to do it without the need for mechanical drying abilities," Wanzek says.
'It's our natural gas'
Natural gas is a byproduct of oil production. The state right now produces 2.2 billion standard cubic feet of natural gas per day in 29 gas plants. (One billion cubic feet is enough to meet annual needs of 10,000 homes.) Eight more gas plants are expected to come online in 2020, adding 1.145 billion cubic feet per day.
As it stands today, North Dakota produces about 2% of the nation's natural gas and consumes 16.7% of the natural gas it produces annually. About half of that is industrial use. The rest is shipped out of the state, and sometimes trucked or railed back in the form of propane.
"It's our natural gas," Brandenburg says. And yet it goes to Conway, Kan., to be processed and shipped back by truck and track, other than some small (North Dakota) facilities in the Tioga and Stanley areas.
However, for all the natural gas the state produces, plenty still goes to waste. North Dakota has limited natural gas storage, too few gas gathering pipelines and limited natural gas distribution pipelines. That means that much of it gets flared - burned off as waste - in the oilfields of western North Dakota.
Brandenburg said he thinks North Dakota should step in to make sure that excess natural gas can be linked to the great needs of farmers and others rather than wasted. LNG costs about half the cost of propane, which can be $2 to $4 per gallon.
One thing is clear: gas flaring going out west is "not acceptable," and will limit the state's oil production capacity, Brandenburg says. The state currently captures about 80% of its natural gas and has set a goal to get to 95%.
"Here, we have all of this natural gas in western North Dakota," Brandenburg says. Since there is more natural gas than the market can absorb, economically, oil and gas companies need incentives to collect the natural gas.
A growing demand
The state's demand for natural gas has grown 55% in the past 20 years. Mitskog is among those who want the state to tackle the issue of getting flare gas to industrial and farm needs due to her community's struggles.
The city of Wahpeton in 2016 identified natural gas limits as a "significant detriment to industrial development" in southeast North Dakota. The city currently is served by the Viking Transmission Line from a "tap" near Vergas, Minn., with a 60-mile-long pipeline into Wahpeton.
Great Plains Natural Gas Co., based in Bismarck, N.D., counts Cargill and Minn-Dak Farmers Cooperative - both in Wahpeton - among its large industrial users for gas. Those companies pay Great Plains lower rates in exchange for having their supply "curtailed" during times of peak use.
Jon Razink, the Cargill plant's general manager, says in the past three or four years, the plant has had "interruptions" or slow-downs about 30 to 40 days a year. Natural gas limits can limit expansion plans, which is "part of the formula" in discussing future leases, Razink says.