pbjanuary 2013
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Northern Plains Business ResourceTRANSCRIPT
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www.prairiebizmag.com
January 2013
Fighting for AirWind industry struggles to expand in face of multiple challenges pg. 22
ALSOTrade Partners
Organizations aid businesses in export opportunities
pg. 24
Looking to ImproveUtility tries new technology to
stay ahead of emissions regulationspg. 34
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Proud of the Past...
timely service.Dacotah Paper distributes over
6,000 products to more than 8,000customers. By constantly improv-ing technology systems, Dacotahhas been able to provide theircustomers the best in service andmeet their customer’s changingneeds. Whether it involves prod-uct selection or delivery require-ments, Dacotah knows how to treattheir customers right. Dacotahsales representatives can instantlycheck inventory, pricing, and cus-tomer order history at the touchof a button, providing the fastestand most accurate service around.Customers can also be linkeddirectly into Dacotah’s system tocheck inventory, pricing, and toplace orders. Orders transmittedare shipped the very next day,on their own fleet of 50 trucks,
delivering from the Canadian toNebraskan borders.
For national delivery, DacotahPaper is a member of NetworkServices®. This is advantageousfor national chains and franchisesto maintain consistency and qual-ity everywhere in the country.Dacotah Paper is proud to providethe best in:
• Disposable paper products• Food service supplies and
equipment• Sanitary maintenance prod-
ucts and chemicals• Shipping and mailing supplies• Office and computer supplies• Electrical products• Healthcare specialty products
Fargo • Grand Forks • Rugby • Minot • Williston • St. Cloud • Duluth • Virginia • BrookingsJamestown • Bismarck • Dickinson • Brainerd • Fergus Falls • Sioux Falls • Detroit Lakes • Marshall • Watertown
2nd GenerationFred W. Mohr III
3rd GenerationMatthew Mohr
“All of us at Dacotah Paper Company strive to provide thebest service and the highest quality products at all times.”
–Matthew Mohr, President
www.dacotahpaper.com
Dacotah Paper was founded in1906. The company’s philosophywas simple and it still holds truetoday, “Treat people well, and servecustomers right.”
Dacotah Paper is a third gener-ation, family-owned business. BillMohr and his son, Fred, purchasedthe business in 1960, and todayMatthew Mohr, Fred’s son, servesas the company president. TheMohr family and the companycontinue their commitment to theoriginal business philosophy andtradition of treating people welland serving customers right.
Customers throughout theregion know they can count onDacotah Paper. With 220,000square feet of office and ware-house space in Fargo, plus facili-ties in Bemidji and Virginia, MN,Dacotah provides superior and
1st GenerationF.W. “Bill” Mohr Jr.
1-800-323-7583
Focused on theFuture
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North Dakota. Doing Business Better.Aldevron is one of many biotech companies taking root in North Dakota thanksto the state’s world-class academic resources and favorable economic climate.Learn how the North Dakota Department of Commerce and companies in thestate are doing business better at www.NDBusiness.com
Photo courtesy of Aldevron
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4 Prairie Business Magazine January 2013
|INSIDE|JANUARY 2013 VOL 14 ISSUE 1
FEATURES DEPARTMENTS6 Editor’s Note BY KRIS BEVILL
Energy’s evolution
8 Business Advice BY MATTHEW D. MOHR
Inventory control
10 FinanceBY ROB MONTGOMERY AND CHANNING SCHMIDT
Sound financial preparation key to new wealth
12 Research & Technology BY BRENDA WYLAND
Entrepreneurs: Born or made?
14 Economic Development BY ALAN ANDERSON
New Innovate ND program is launched across the state
16 Prairie News
18 Prairie People
20 Business DevelopmentIndustrial activity spurs incentive changes in Jamestown
28 Red River ValleyJohn Deere invests millions to expand production in ND
30 South DakotaDe Smet draws in industrial park tenants
32 Western North DakotaBidding on Bowman
33 Business to Business
34 Energy
38 By the numbers
Next MonthFebruary's issue of Prairie Businessmagazine will cover technology and its role in improving health care. Also inFebruary, how states plan to address the persistent need for health care professionals in rural areas.
On the CoverLake Region State Collegestudents receive hands-ontraining at a full-size windturbine as part of the col-lege's wind energy technician program. PHOTO: LAKE REGION STATIE COLLEGE
22 WINDHanging in the BreezeUncertain federal support leaves wind industry struggling to expand
TRADEExports on the RiseMerchandise exports from companies throughout the region are on the upswing
24
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CORRECTIONS: • The December issue of Prairie Business magazine incorrectly identifiedDoug Burgum as the founder of Great Plains Software. The company wasfounded by Joe Larson and Roger Turner. • The feature article “Immense Inspiration” incorrectly listed the ages ofRyan Boschee and Kory Anderson. Boschee is 33 years old. Anderson is 29.
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6 Prairie Business Magazine January 2013
|EDITOR’S NOTE|
Energy’s evolution
The story of energy production on the northern Plains is one that changes
nearly as steadily as the seasons. It is an evolving story as oil production
continues to reshape the western region of North Dakota. It is an emerg-
ing story as new technologies are introduced to utilize the increasing amounts of
natural gas produced at Bakken wells, presenting new opportunities for produc-
ers to capitalize on a resource that is too often flared into the atmosphere. It is a
survival story as the wind energy industry faces a future without federal support
and fights to retain a growing presence in the nation’s energy mix. And it is a
story of anticipation, as coal-fired utility plants attempt to deploy technologies to
meet anticipated stringent environmental regulations ahead of the regulators’
final rules.
In this issue, we touch on many of the diverse energy resources and the issues
facing those industries. In my years covering energy, I’ve found that writing about
energy topics would often be much easier if I had a crystal ball, and this month was
no exception. As we send this issue to print there is still no final word on a last-minute
extension to the wind industry’s production tax credit, although industry members
continued to express optimism that Congress would pass an extension prior to the
Dec. 31 expiration date. The northern Plains is rich in wind and legislators in the
Dakotas have expressed support to extend the credit in some form in order to pre-
vent a total collapse of the industry.
The latest oil production numbers from the North Dakota Department of
Mineral Resources, released in mid-December, showed that the state’s wells set
another production record in October, up slightly over September’s number to
approximately 747,000 barrels per day. The number of operating rigs had dropped
slightly to about 180, but it is expected that number will increase in early 2013 to
around 200. Daily natural gas production did not increase from September to
October but it is expected that natural gas production will continually increase in
the coming years and producers will be held more strictly to policies set in place to
limit flaring activities.
2013 is shaping up to be yet another interesting year across all sectors of our
region’s diverse energy industries.
KRIS [email protected]
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7www.prairiebizmag.com
An SBA Award Winning Publication
MIKE JACOBS, PublisherRONA JOHNSON, Executive EditorKRIS BEVILL, EditorTINA FETSCH, Production ManagerBETH BOHLMAN, Circulation ManagerKRIS WOLFF, Layout Design, Ad Design
Sales Director:JOHN FETSCH701.212.1026 [email protected]
Sales:BRAD BOYD - western ND/western SD800.641.0683 [email protected]
SHELLY LARSON - eastern ND/western MN701.866.3628 [email protected]
Editor:KRIS BEVILL701.306.8561 [email protected]
Editorial Advisors:Dwaine Chapel, Executive Director, SouthDakota State University Innovation Campus;Bruce Gjovig, Director, Center for Innovation;Lisa Gulland-Nelson, CommunicationsCoordinator, Greater Fargo Moorhead EDC;Tonya Joe (T.J.) Hansen, Assistant Professor ofEconomics, Minnesota State UniversityMoorhead; Dusty Johnson, Chief of Staff forSouth Dakota Gov. Dennis Daugaard’s office;Brekka Kramer, General Manager of Odney;Matthew Mohr, President/CEO, Dacotah PaperCompany; Nancy Straw, President, West CentralInitiative
Prairie Business magazine is published monthlyby the Grand Forks Herald and ForumCommunications Company with offices at 3752nd Avenue North, Grand Forks, ND 58203.Qualifying subscriptions are available free ofcharge. Back issue quantities are limited andsubject to availability ($2/copy prepaid). Theopinions of writers featured in Prairie Business aretheir own. Unsolicited manuscripts, photo-graphs, artwork are encouraged but will not bereturned without a self-addressed, stampedenvelope.
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8 Prairie Business Magazine January 2013
|BUSINESS ADVICE|
Inventory control BY MATTHEW D. MOHR
Most businesses carry some product for sale to
customers, or in the case of a service firm,
keep an inventory of needed supplies on
hand. But not every product that is bought can be resold
or used. The best purchasing departments keep a close
eye on merchandise and supplies that may become
obsolete, old, out of date or hard to sell. Solid inventory
control involves getting a benchmark percentage of
what you have on hand which will be allowed to be
unsaleable or unusable. Industry benchmarks are avail-
able if you look for them. If some of what you purchase
regularly becomes bad, a lot of good sales need to be
made to cover for the items you can’t get rid of.
Obsolete inventory is a major concern of lenders
and potential business buyers. Often a business pur-
chase price will exclude any product on hand older than
a certain number of days. When touring a high cost of
inventory business a few years ago, I explained this idea
to the owner who quickly corrected me by saying they
had to keep all the poor items on their inventory list so
they received larger bank loans. The business had suffi-
cient over-all turn-over, but a large share of what they
borrowed against was unsaleable. The bank looked at
the gross numbers, not realizing they were lending
against worthless goods. Had the business gone under,
the bank would have sold for pennies what they thought
was worth dollars.
Many businesses keep product long past the time it is
saleable, inflating their inventory value and profits. This is
a tricky game that usually results in a problem which con-
tinues to grow until it is unmanageable.
If you carry goods on hand for resale or use, be sure
you watch particular items and dispose of the poor selling
ones quickly so you don’t end up with a bunch of outdat-
ed, unsaleable, unusable product and no profit. PB
Matthew D. MohrCEO, Dacotah Paper Co.
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10 Prairie Business Magazine January 2013
|FINANCE|
Sound financial preparationkey to new wealth BY ROB MONTGOMERY AND CHANNING SCHMIDT
North Dakota is booming with new-found oil
wealth and escalating family farm and ranch
values. Creating and growing these business
operations requires attention to not only the current
operations, but also what we want to pass on to the
next generation, and that requires important finan-
cial preparation right now.
There are three questions any business or farm
owner needs to ask themselves when they are think-
ing about transitioning out of a business or farm: 1)
who do I want to transition the business to 2) when
do I want to transition out and 3) how do I want to
transition it?
Typically, the first step is the easiest because the
business or farm owners already have an idea who they
want to transition the business or farm to. The answer
is usually either a family member or a key employee.
However, there are times when a third party can come
in and purchase the business or farm.
The second step becomes a moving target. One of
the most difficult decisions a business or farm owner
has to make is when to walk away. Many times, the tar-
get date moves back because the business or farm
owner doesn’t feel they have enough money to retire or
have a desire to retire.
The third step is the most difficult decision
because many times the business or farm owner needs
assistance from their legal, tax and financial advisers.
Many times, a comprehensive financial plan may need
to be completed in order to map out their goals, if the
business or farm owner is looking to transition into
retirement.
Many business or farm owners look at transition
of the business at death. Looking at estate plan strategies
at death, they can consider three options: Wealth equal-
ization, family management or a one-way, buy-sell
agreement.
Wealth Equalization. The assumption for wealth
equalization is they want to treat their children fairly
but maybe not equally. Here, they will bequest the land
or business to child who wishes to farm the land or con-
tinue the business. The rest of the assets then will be
split among the other children. Since a large amount of
the estate will go to the one child, the owner can equal-
ize the estate by placing a life insurance policy in an
Irrevocable Life Insurance Trust and have the remain-
ing children be the beneficiaries of the trust.
Family Management. Here, the business owner
will put the business or farming operation into a part-
nership or LLC whereby they will control and receive
income from the partnership during their lifetime.
They can bequest the entire operation to all of the chil-
dren and name one child as a manager of the operation.
The child who becomes manager can then rent the land
(or buildings) from the partnership or LLC. Each child
will receive income from the operation and the entire
operation will pass from one generation to the next.
One-Way Buy-Sell. A third option is that the des-
ignated manager (son or daughter) will enter into a
buy-sell agreement with the parents where he or she
will purchase the land or business upon the death of
both parents. For a source of funds, the children would
purchase a life insurance policy on the parents.
These are just some of the options and considera-
tions that should be discussed now by business owners
experiencing new wealth from the North Dakota ener-
gy boom or by family farmers who are witnessing
extraordinary land values. PB
Rob MontgomeryPresident, Securian Financial Advisors of North Dakota
Channing SchmidtAttorney, Minnesota Life Insurance Co.
ROB MONTGOMERY
CHANNING SCHMIDT
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12 Prairie Business Magazine January 2013
|RESEARCH & TECHNOLOGY|
Entrepreneurs: Born or made?BY BRENDA WYLAND
Are entrepreneurs born, or are they made? At
first glance, this question may be along the
lines of which came first, the chicken or the
egg? At the North Dakota State University Research
and Technology Park, we provide an environment that
encourages and sustains entrepreneurship, spanning a
continuum of age groups.
The most recent U.S. State Entrepreneurship
Index from the University of Nebraska-Lincoln placed
North Dakota as No. 2 in the annual state-by-state
measurement of entrepreneurial activity in all 50
states. Massachusetts was No. 1, with California, New
York and Minnesota rounding out the top five.
Economists at UNL’s Bureau of Business Research
and Department of Economics developed the index.
North Dakota was ranked No. 8 in 2011 but jumped to
No. 2 last year primarily due to high rates of business
formation and establishment growth, according to the
index’s authors.
At the NDSU Research and Technology Park, we
strive to foster innovation and entrepreneurship.
Through our commitment to entrepreneurship educa-
tion and initiatives, the park contributes to the quality
of academic success at NDSU, diversifies the state’s
economy and builds an environment for discovery. The
partnership works to produce effective results.
NDSU’s Innovation Week builds student aware-
ness for innovation as a precursor to entrepreneurship,
empowers students to pursue entrepreneurship as a
career choice, expands student access to available
resources, and engages current entrepreneurs with stu-
dents. February will mark the fourth annual
Innovation Week on campus and the second year for
the Innovation Challenge, an innovation competition
which will award three winning teams $5,000 plus the
chance to win an additional $5,000 for the top product,
service or corn-based innovation. Last year’s
Innovation Challenge yielded entrepreneurial ideas
including innovative dental implants, aphasia therapy
for people with a language processing disorder and
coatings for industrial applications. Fifty-nine student
teams have registered for the 2013 challenge, nearly
triple last year’s entries.
Fostering a culture of innovation starts early. Our
partnerships with Fargo Public Schools, West Fargo
Public Schools, Moorhead Public Schools, South East
Education Cooperative, NDSU, and the North Dakota
State College of Science further advance science, tech-
nology, engineering, entrepreneurship and math skills
critical to building a diversified economic environment.
Others across the NDSU community support
entrepreneurship as well. The NDSU College of
Business partners with the University of North Dakota
to offer a program where students can achieve an
entrepreneurship certificate. The NDSU Extension
Service Center for Community Vitality provides entre-
preneurs resources to start or grow their businesses,
along with youth entrepreneurship classes.
For business start-ups, the NDSU Research and
Technology Park Incubator provides a one-stop center
for entrepreneurial tools such as venture capital,
coaching and mentoring, networking, talent and tech-
nical assistance to advance their growth trajectories.
Whether entrepreneurs are born or made may still
be debated. Through our efforts at NDSU and the
efforts of many others in state leadership positions
through programs such as Innovate ND, we are work-
ing to ensure that entrepreneurship becomes second
nature to those who generate good ideas. Those good
ideas may contribute to the region’s continuing eco-
nomic success in the future. PBBrenda Wyland
Interim executive directorNorth Dakota State University Research and Technology Park
On the Web: The complete U.S. State Entrepreneurship Index can be viewed at: http://bbr.unl.edu/documents/September_2012_BIN.pdf
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14 Prairie Business Magazine January 2013
|ECONOMIC DEVELOPMENT|
New Innovate ND program islaunched across the stateBY ALAN ANDERSON
Innovate ND is a program that assists entrepreneurs in the development of their business idea through
access to coaches from entrepreneurial centers across North Dakota. The program helps people with
innovative concepts build a business from the idea up.
Innovate ND has made exciting changes for 2013 to ensure the program’s success continues well into
the future. Until now, the program has been known as a venture competition with deadlines, Top 20 final-
ists and the opportunity to win cash prizes. As Innovate ND enters its seventh year, the program is taking a
more strategic view of its current structure to ensure it is delivering on the original goal of building a
statewide entrepreneurial community.
Innovate ND continues to build a comprehensive statewide network of information, educational
content and business resources to assist entrepreneurs in establishing their businesses while creating an
overall climate in our state that encourages, promotes and supports future businesses which will drive
our economy.
Innovate ND’s 2013 program will focus on structure, educational assistance for entrepreneurs and the
entrepreneurial community as a whole, rather than a venture competition.
Anyone who is a current or former North Dakotan or an entrepreneur with the desire to build a busi-
ness in the state is welcome to be part of the Innovate ND program.
There are several benefits for those who enroll in the Innovate ND 2013, including:
• Increased individual technical assistance and coaching
• More educational boot camps (increase from three to six) in more locations
• High-quality, online educational tools
• Increased access to free “Coach-on-Call” assistance from one of the best entrepreneurial
coaches in the country
• Ability to work with entrepreneurial center coaches at their own pace and determine their
unique goals
Innovate ND fosters innovation and entrepreneurship in all sectors of the economy and in all corners
of our state. Entrepreneurial centers in four locations throughout the state will provide technical support and
coaching assistance to Innovate ND participants. The centers are located at the University of North Dakota
Center for Innovation in Grand Forks, the North Dakota State University Technology Incubator in Fargo,
the IDEA Center in Bismarck and the Severson Entrepreneurship Academy in Minot.
Join the program as a participant or strategic business partner. Enrollment is open through May 31,
2013. Additional information about the program is available at InnovateND.com. PBAlan Anderson
Commissioner, North Dakota Department of [email protected]
Twitter: @InnovateND, @NDAmbassador, @NorthDakota
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15www.prairiebizmag.com
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16 Prairie Business Magazine January 2013
Prairie News Industry News & Trends
Summit Hotel Propertiesacquires Texas hotel
Sioux Falls, S.D.-based Summit Hotel
Properties Inc. purchased a 98-room Hilton
Garden Inn in Fort Worth, Texas, for $7.2 million
in October. The company now owns 82 hotels
with a total of 8,674 rooms located in 21 states.
Summit Hotel Properties is a self-managed
hotel investment company focused on acquiring
and owning premium-branded, select-service
hotels in upscale and upper midscale segments of
the U.S. lodging industry, according to the compa-
ny. The majority of its hotels are franchise brands
owned by Marriott International Inc., Hilton
Worldwide and InterContinental Hotels Group.
Northrop Grumman earns safety award
Northrop Grumman Corp.’s New Town,
N.D., manufacturing center recently received
recognition from the U.S. Department of Labor
for its health and safety practices. The company
participates in the Occupational Safety and Health
Administration’s Merit Voluntary Protection
Program, which recognizes private industry and
federal agencies that have implemented effective
safety and health management systems and main-
tain injury and illness rates below national Bureau
of Labor averages.
Northrop Grumman’s manufacturing facili-
ty has been in New Town since 1970. It employs
125 workers who produce radio frequency and
fiber-optic cables and wire harnesses for the com-
pany’s aircraft programs.
NDSU technology licensed to ND start-up
Colfax, N.D., technology start-up company
c2renew has completed a license agreement with
the North Dakota State University Research
Foundation that will enable the company to pro-
duce biocomposite materials that are used to
improve the strength and stability of plastic prod-
ucts. The technology developed by university
researchers utilizes agricultural byproducts such
as sunflower hulls, sugar beet pulp, flax shive and
corn fiber from distillers dried grains as a replace-
ment for petroleum-based plastics in thermoplas-
tic applications such as handles and consoles on
agricultural equipment. The company plans to
commercialize the technology to produce envi-
ronmentally friendly products at a lower cost than
the petroleum counterparts.
USD awaits final approval forsports facility projects
Officials from the University of South
Dakota are expected to appear before state legisla-
tors this month to request their approval for a
sports performance enhancement facility and an
outdoor track and soccer complex at USD.
Legislative approval of the sports facilities is the
final step necessary before construction can begin
on the projects.
The South Dakota Board of Regents author-
ized the projects in October, as well as a science,
health and research lab, which was also approved
by the state legislature. The combined cost of the
projects is more than $70 million.
The Board of Regents also granted its final
authorization in October for an $11.6 million
expansion of USD’s Muenster University Center.
The project, which is currently under way, will add
30,000 square feet to the center, improving cam-
pus dining options for students.
RDO provides equipment to NDSCS,takes stake in Aussie dealership
Fargo, N.D.-based RDO Equipment Co. recently
announced a partnership with Vanderfield Pty. Ltd., an
Australian John Deere dealer group. Founded in 1963 by
Gordon Vandersee, Vanderfield became a dedicated John
Deere dealership in 1970 and currently operates eight loca-
tions throughout Australia. Its headquarters in
Toowoomba is considered one of the largest individual
John Deere dealerships in Australia. RDO now joins the
Vandersee family as shareholders in Vanderfield.
In November, RDO Integrated Controls, the compa-
ny’s positioning division, partnered with North Dakota
State College of Science in Wahpeton to provide equipment
and technology for the school’s land surveying and civil
engineering technology program. RDO will provide free
faculty training, support and setup of equipment, which
will be updated with the latest available versions each
school year. The equipment is valued at $225,000, but is
being provided to NDSCS at no cost.
RDO was founded in 1968 by Ron Offutt and contin-
ues to be family-owned and operated. The company cur-
rently consists of 60 locations in nine U.S. states and in
Russia and Ukraine, offering equipment produced by John
Deere, Vermeer and Topcon.
RDO Equipment Co. has partnered with North Dakota State College of Science to providestate-of-the-art equipment and technology for its land surveying and civil engineeringtechnology program. From left to right, NDSCS President John Richman; land surveyingand civil engineering technology students Cody Zarak, Wahpeton, N.D., and ShellinaIrwin, Wasilla, Alaska; Fred Meyer, RDO Integrated Controls account manager, and ScottSchumacher, RDO Integrated Controls eastern North Dakota account manager. PHOTO: NORTH DAKOTA STATE COLLEGE OF SCIENCE
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Knowledge ! Dedication ! Commitment
Fisher Sand & Gravel Co.
Sand/Gravel
Decorative Rock
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Custom Fabrication
Milwaukee® Power Tools
Grade 5 & 8 Fasteners
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17www.prairiebizmag.com
SDSMT receives youth campscholarships donation
The South Dakota Community Foundation has awarded a $5,000
grant to the South Dakota School of Mines & Technology to offset camp
fees for the school’s summer youth programs. SDSMT’s summer camps
have traditionally focused on exposing elementary and middle school
students to science and engineering, or immersing high school students
in areas such as mining, forensics, chemical engineering and explosives.
For summer 2013, however, the program will shift its focus toward more
in-depth camps for high school students and will emphasize the areas of
science, technology, engineering and math.
From left to right: Jackie Schumacher, information specialist withyouth programs, and Shawna Hall, youth programs program andcurricula developer, at the South Dakota School of Mines andTechnology accept a $5,000 South Dakota CommunityFoundation donation from Charles Riter. PHOTO: SOUTH DAKOTA SCHOOL OF MINES & TECHNOLOGY
ND, MN rank high in entrepreneurship indexA study recently conducted by the University of Nebraska’s Bureau
of Business Research ranked North Dakota as second in the nation in the
development of entrepreneurship. Minnesota ranked fifth. The Top 5
states in the 2011 U.S. State Entrepreneurship Index, in ranking order are:
Massachusetts, North Dakota, California, New York and Minnesota.
North Dakota jumped six slots from 2010 to 2011, a move attrib-
uted primarily to a high rate of business formations and establishment
growth. Five components are considered in the index, including the
income of entrepreneurs, business formation rates, technological innova-
tion and growth in the number of entrepreneurs.
Sioux Falls home building permits up nearly80 percent
The Home Builders Association of the Sioux Empire reported in
October that the number of building permits for new residential single-
family units for the first nine months of 2012 was up nearly 80 percent
compared to the same time frame in the year prior. The total number of
building permits issued in Sioux Falls from January through September
2012 was 465, compared to 261 permits issued in 2011 and 302 permits
issued in 2010.
|PRAIRIE NEWS|
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18 Prairie Business Magazine January 2013
|PRAIRIE PEOPLE|
Sioux Falls photographer toparticipate in national contest
Ann Kneip, owner of Ann Louisa
Photography, has been selected to represent Sioux
Falls, S.D., in the 2013 Seniors Ignite Model
Competition to be held in March in San Diego,
Calif. Her photography studio is one of only 46 stu-
dios nationwide to be selected to submit portraits
for the contest.
Border States Electric CEOreceives achievement award
Tammy Miller, CEO of Border States Electric,
was recently awarded the L.B. Hartz Professional
Achievement award from the College of Business and
Industry at Minnesota State University Moorhead, an
award given in recognition of a leader’s demonstrat-
ed qualities of entrepreneurship, contributions to
their community, contributions to the creation of
quality jobs, business and personal ethical qualities,
and creativity and innovation in business.
Miller joined BSE in 1991 and served in sever-
al different positions before becoming CEO in
2006. Since 2006, company sales have grown from
$480 million to $1.2 billion and more than 750 new
jobs have been created. Miller is a graduate of
MSUM and has served on the foundation board of
directors and the business school advisory council.
She is the 31st recipient of the professional achieve-
ment award.
Long-time BMDA president announces retirement
Russell Staiger, president of the Bismarck-
Mandan Development Association has announced
his intent to retire from the position in June. Staiger
has served as president of the group since joining in
January 1980, when it was known as the Bismarck
Development Association. Since that time, the city
of Bismarck asked the association to assume the role
as city-wide economic development agency, fol-
lowed by a similar request from the city of Mandan,
the Burleigh County Commission and the Morton
County Commission, which resulted in the group’s
name change to the Bismarck-Mandan
Development Association.
Staiger and the BMDA executive committee
will develop a recruitment process to identify his
replacement prior to his June 30 departure.
TMI Hospitality adds 4 teammembers
TMI Hospitality, a Fargo-based privately
owned hospitality ownership and development
company, has added four new members to its
team.
Michelle Blakeman has been hired as manag-
er of talent acquisition. Before joining TMI
Hospitality, she recruited for Microsoft, Blue Cross
Blue Shield of North Dakota and Eide Bailly.
Melissa Hughes has been hired as human
resources manager. She previously served as
human resources manager for the Fargo Jet Center
Inc. and Weather Modification Inc.
Karen Poppe will serve as compensation and
benefits manager, a position she held previously at
Essentia Health.
Laura Ludwig has joined the company as
manager of the sales center. She worked most
recently as director of sales for the Fargo, N.D.,
Hilton Garden Inn.
Warberg Block receives entrepreneurial award
Kari Warberg Block, founder of Bismarck,
N.D.-based Earth-Kind, the only U.S. EPA certified
natural rodent repellent, was one of the winners of
Ernst & Young LLP’s 2012 Entrepreneurial
Winning Women program. She was one of 11
recipients selected from a group of 110 applicants
as part of a national competition and leadership
initiative that connects award winners with advi-
sors, resources and insights to assist in scaling their
businesses from second-stage to their full poten-
tial. Winners receive a trip to Ernst & Young’s
annual strategic growth forum, where they have
the opportunity to connect with and present to
more than 2,000 market-leading CEOs.
Ann Kneip Michelle Blakeman Melissa Hughes Karen Poppe
Tammy Miller
Russell Staiger
Laura Ludwig
Kari Warberg Block
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SD Home Builders inducts 4into Hall of Fame
The South Dakota Home Builders
Association inducted four new members into
its Hall of Fame during the group’s annual
convention held Nov. 2 in Sioux Falls.
Alan Amdahl of Amdahl Construction
Co. is a past president of the SDHBA and the
Home Builders Association of the Sioux
Empire and served as the South Dakota
National Director from 1998 until 2003.
Duane Bickett of Bickett’s Construction
and has served in various positions at all levels
of the association. He continues to serve as
part of the state board of directors.
Dave Asbridge and Jennifer Lage
Landguth, both of Rapid City, were also
inducted into the Hall of Fame.
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|PRAIRIE PEOPLE|
Alan Amdahl Duane Bickett
Dave Asbridge Jennifer Lage Landguth
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20 Prairie Business Magazine January 2013
|BUSINESS DEVELOPMENT|
Industrial activity spurs incentive changes in JamestownProposed energy park projects expected to increase housing demands in south-central ND communityBY KRIS BEVILL
The Spiritwood EnergyPark, located 10 miles eastof Jamestown, N.D., is situ-ated next to Great RiverEnergy’s existing powerplant and a Cargill Maltplant. Projects underdevelopment for the ener-gy park are expected toincrease housing demandsin nearby Jamestown.PHOTO:JAMESTOWN/STUTSMANDEVELOPMENT CORP.
City leaders and economic development officials in
Jamestown, N.D., are quick to express satisfaction
with the looming flurry of activity at the nearby
Spiritwood Energy Park. At the same time, they’re feeling
the pressure of anticipated growth in demand for housing
as the town of 16,000 prepares to accommodate new
workers at energy park facilities.
“We’re scrambling to make it known to those who
build houses, apartments and so forth that we have a very
short [housing] market,” says Connie Ova, CEO of the
Jamestown/Stutsman Development Corp. “We know we’re
already behind the curve but we’re diligently working on it.”
Spiritwood Energy Park is a 500-acre industrial park
located just 10 miles east of Jamestown. The park is expect-
ing at least two new tenants over the next few years that
could provide up to 200 full-time manufacturing jobs to the
area. The JSDC and city and county officials have formed a
development committee to address the housing situation
and are considering crew camps as an option to house con-
struction workers, Ova says. A 90-room Hampton Inn cur-
rently being built in Jamestown is targeted to be operational
this summer and Ova says development officials are hopeful
it will also be available in time for construction crews to uti-
lize as they begin work on the first project. But with fewer
than 50 single-family homes currently available in
Jamestown and few apartment openings, the need for per-
manent housing is an area of key focus.
To help spur permanent housing projects, the city is
working to improve the climate for business development.
In early December, the city council passed a measure by a
vote of 3-2 which will allow 75 percent of the developers’
infrastructure costs to be applied in special assessments. The
city previously required developers to pay 100 percent of the
infrastructure costs. The city is also employing an engineer-
ing, planning and design consultant to update its master
plan and strategically target areas for future development.
Minneapolis-based SRF Consulting Inc. has offices in Fargo
and Bismarck, N.D., and has worked on projects in western
North Dakota — an experience that Jamestown officials feel
will be useful when guiding them through their growth
plan, according to Mayor Katie Anderson.
The first energy park project expected to impact the
town is a 65-million-gallon per year corn ethanol plant
named Dakota Spirit AgEnergy. Great River Energy has
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|BUSINESS DEVELOPMENT|
been developing the project for several years and
is expected to break ground on the plant in 2013,
pending the completion of fundraising efforts.
The project is expected to require $150 million in
capital equity, according to Sandra Broekema,
GRE business development manager. When the
ethanol plant is complete in late 2014 or early
2015, GRE’s nearby Spiritwood Station, a com-
bined heat and power plant, will provide steam
to operate the ethanol facility, allowing the
power plant to operate at full capacity.
Spiritwood Station will then add 20 to 25 full-
time workers. The ethanol plant is expected to
provide up to 40 jobs.
The largest project slated for the park to date
is a massive $1 billion nitrogen fertilizer plant.
CHS Inc. announced in September its intent to
construct the facility on 200 acres of the energy
park and is currently in the pre-FEED (front-end
engineering and design) stage of the project.
Construction is tentatively scheduled to begin in
2014. If the current timeline stays in place, the
facility will be operational in 2016 and will
employ up to 150 workers.
Ova says 100 acres of land are still available
within the park and the JSDC has received many
inquiries from in- and out-of-state companies that
are considering snapping up the available space.
The JSDC is a majority partner in the Spiritwood
Energy Park Association, which has pledged 100
acres of the property as well as $3.75 million to
install a rail loop to provide the park’s tenants with
access to the Burlington Northern Santa Fe rail
line. “The rail spur is what the drawing card is,” she
says, adding that as soon as ground is broken for
the ethanol plant and/or fertilizer plant, construc-
tion will also commence on the rail loop.
Anderson says that although construction
has yet to begin on either of the proposed energy
park projects, she is not fearful of developing the
town too soon. She’s confident that both projects
will proceed as planned noting that CHS’s $10 mil-
lion pre-FEED costs implies a definite commit-
ment to Spiritwood Energy Park. “I feel like if
someone is willing to commit $10 million to the
engineering and design specifically to this site,
they’re very serious about moving forward,” she
says. “They’re not likely to walk away from that
large sum of money without significant reason.”
PB
Kris Bevill
Editor, Prairie Business
701-306-8561, [email protected]
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22 Prairie Business Magazine January 2013
|WIND|
Minnkota Power Cooperative purchases elec-tricity from two large wind farms in NorthDakota through 25-year power purchaseagreements. The U.S. Department of Energy,the National Rural Electric CooperativeAssociation and the Cooperative ResearchNetwork named Minnkota Power Cooperativeas the 2010 Wind Cooperative of the Year. PHOTO: MINNKOTA POWER COOPERATIVE
With about two weeks remaining before the Dec. 31 end of the wind
energy industry’s 2.2 cent per kilowatt hour production tax credit
(PTC) and no real sign of Congressional action to extend it, the
American Wind Energy Association began floating a plan to temporarily extend
the credit while phasing it out over the next few years. The group suggested that
Congress should extend the PTC at its current rate through 2013 and then reduce
it by 10 percent each year until it reaches 60 percent of its current value in 2016.
After that, the proposal suggested leaving the subsidy in place at the 60 percent
rate for two years before it is completely eliminated in 2018.
In a Dec. 12 letter to Congressional leaders, AWEA CEO Denise Bode said the
Dec. 31, 2012 PTC expiration date had already begun to translate into layoffs because
project developers had shelved any upcoming projects that would have extended
beyond that date. If the subsidy were allowed to expire as planned, Bode said it could
result in 37,000 lost jobs throughout the country by the end of the first quarter in
2013. “If the wind industry’s domestic supply chain is lost now, it will take years to
build it back up to its current level,” Bode said in the letter.
In the days following the AWEA’s policy suggestion, it remained unclear
whether Congress would take up the offer and extend the PTC, but Ron Rebenitsch,
executive director of the South Dakota Wind Energy Association, was optimistic that
the proposed policy had a chance of success. Rebenitsch said that while a longer
timeframe would be preferable, six years “is better than nothing” and would still pro-
vide some certainty to project developers on the brink of a collapsing industry.
Rebenitsch says just 2,000 megawatts of wind power are expected to come
online nationwide in 2013, compared to a high of 13,000 megawatts in 2012 as proj-
ect developers rushed to beat the PTC’s expiration. “We went from boom to bust,”
he says. “Hopefully this longer term extension will enable [the industry] to recover
from that bust,” he said. “It won’t happen in 2013 because these things take time but
it will help us begin recovering and make longer-term plans and move forward.”
Hanging in the BreezeUncertain federal support leaveswind industry struggling to expandBY KRIS BEVILL
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23www.prairiebizmag.com
|WIND|Locally, the impacts of an expiring PTC have been visible in layoffs at
turbine component manufacturing facilities and in the halt of wind farm
project development. At the end of 2012 there were no wind projects under
construction in South Dakota, according to Rebenitsch. “There are a num-
ber of projects in various stages of development, but most of those devel-
opments have been basically stopped,” he said. North Dakota’s industry was
in a similar state, according to Mark Nisbet, North Dakota principal man-
ager for Xcel Energy and wind representative for North Dakota’s Empower
Commission. He said North Dakota was set to have 1,670 megwatts of
wind energy by the end of 2012, ranking it among the Top 10 wind energy
producing states, but there were no known new projects on the books for
2013. “Everybody was aware that this might be the last year of the PTC …
It probably wasn’t a year conducive to just deciding in the middle of the
summer that you were going to move ahead,” he said.
Multiple ChallengesThe PTC was created to make up-front capital intensive wind projects
more economically competitive with other forms of energy. However,
while the continuation of the subsidy is a critical part of the wind indus-
try’s future, several other challenges must also be addressed as the industry
works to expand its presence in the U.S. energy mix.
Natural gas and wind can often be combined in a very effective gen-
eration partnership for utilities because natural gas is a fuel displacer,
Rebenitsch says, and utilities are often able to pay for a wind project thanks
to fuel savings garnered from natural gas turbine installations. Bismarck,
N.D.-based Basin Electric Power Cooperative has incorporated more than
700 megawatts of wind power into its five-state service region and
Minnkota Power Cooperative Inc., North Dakota’s largest supplier of wind
energy, supplies more than 30 percent of its customers’ needs via 357
megawatts of wind power.
Rebenitsch says the benefit of wind power is that it has no fuel costs
and the cost of the project can be amortized out over 20 years or so at a
set price, whereas natural gas requires long-term fuel purchase agree-
ments. But when natural gas prices are low, the benefits of wind projects
are less obvious and companies are more likely to push back a decision to
invest in wind power. Considering this, North Dakota’s growing abun-
dance of natural gas is “a blessing and a curse” for local wind development,
Rebenitsch says. “It offers the opportunity for additional flexible genera-
tion that will better enable wind energy to be integrated into systems,” he
says. “On the other hand, the surplus of gas makes it difficult to justify the
20-year investment [in wind power] when gas prices are low. That’s where
utilities have to be forward looking over the long term in order to make a
commitment today.”
Nisbet says Xcel Energy is the largest provider of wind power in the
region, based on the size and scope of its system, but his company would
likely opt to use the area’s cheap and abundant natural gas to supply future
projected growth if there is no PTC for wind power. “Wind has been good
for us, but at the same time, with the availability of natural gas, a lot of util-
ities are looking to that as the right choice,” he says.
Transmission lines are another challenging area for wind develop-
ment, says Rebenitsch, who compares the lack of adequate lines to a farmer
having a bin full of wheat but no road to bring it to the market. “We have
the product here and we need to be able to export it,” he says. “That’s some-
thing that is evolving, but it’s evolving slowly.” The issue boils down to eco-
nomics and the question of who pays for what, he says. “A North Dakota
utility doesn’t really have customers in Minneapolis, so who builds the
transmission line from North Dakota or South Dakota to connect with the
grid in Minneapolis? And who pays for those upgrades? Those are the
knotty questions. It’s a difficult knot to untie.”
Technology ImprovementsEven with an extended subsidy, the wind industry needs to continu-
ally improve its technology to become more economically competitive.
Nisbet and Rebenitsch say advancements are being made, but more time is
needed to further develop those improvements. For example, Xcel Energy
is collaborating with the National Center for Atmospheric Research to bet-
ter predict wind availability, Nisbet says, and the industry is working to
improve aspects of wind power, such as energy storage. “That’s one of the
reasons why we believe in continued research to keep wind energy in the
game while they’re working on those next-step type of process improve-
ments,” he says.
EmploymentWith a lack of new orders to fill, at least domestically, blade and com-
ponent manufacturers still operating in the region are expected to switch
their focus to providing maintenance services for existing wind projects,
which comprise 60,000 megawatts of power nationwide, according to
Rebenitsch. Wind energy technicians are in short supply, and few colleges
in the country offer training programs for students interested in that spe-
cific career. Lake Region State College in Devils Lake, N.D., began offering
a wind energy technician training program in the form of a one-year cer-
tificate and a two-year associate’s degree in 2009 and is one of only seven
colleges in the U.S. to receive the AWEA’s seal of approval.
Doug Darling, LRSC interim president, says the program was devel-
oped after college officials learned of a need for technicians at the state’s
existing wind farms. The first eight students graduated from the two-year
program last spring. Currently, 19 students are enrolled in the wind ener-
gy technician program, he says. Darling expects there will be a shortage of
technicians in the U.S. through 2016, noting that the industry’s rule of
thumb is one technician for every 10 turbines. However, without an exten-
sion of the PTC, he says demand for technicians will likely decrease some-
what as will student interest in becoming involved in the industry. “They
need to see wind farms if they’re going to be interested in it,” he says.
LRSC recently completed a nearly 10-year process to install its own
1.6 megawatt turbine near campus which will be used for student training
as well as generate power for the college.
Students of the program had been traveling to wind farms around the
state for training while the college slogged through the long process of
gaining approval for and building its own turbine. Now they will have a
dedicated turbine to use for maintenance and training purposes. At the
same time, the turbine will provide power for the college as well as excess
power to be sold back to the grid. The turbine is expected to begin operat-
ing this month. “We’re excited,” Darling says. “We felt like having a func-
tional turbine was the last piece we needed so that we would have a really
great program.” PBKris Bevill
Editor, Prairie Business701-306-8561, [email protected]
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24 Prairie Business Magazine January 2013
|TRADE|
Exports on the RiseMerchandise exports from companiesthroughout the region are on the upswingBY KRIS BEVILL
Local trade experts say exports are becoming an increasingly impor-
tant part of the business plan for many companies in the northern
Plains as a way to hedge against domestic market fluctuations and
expand their businesses beyond the domestic market’s capabilities. A
number of factors have aligned in recent years to boost export opportu-
nities in this region, including a weak U.S. dollar relative to other curren-
cies, booming agriculture industries worldwide and increased demand
for U.S. products from developing countries. Merchandise exports were
up in Minnesota, South Dakota and North Dakota for the first three quar-
ters of 2012 compared to the previous year, according to data from the
U.S. Department of Commerce, and that growth trend is expected to con-
tinue in coming years as developing countries such as China demand
more U.S. products.
“Companies that are looking to the future have to get into the export
market,” says Dean Gorder, executive director of the North Dakota Trade
Office. Gorder points out that more than 95 percent of the world’s popula-
tion is located outside of the U.S., so a company that restricts its products to
the domestic market is greatly limiting its potential for growth.
Ag-related products top the list of merchandise exported from North
Dakota, according to trade officials, although a quick glance at the com-
merce department’s data might suggest otherwise. The department current-
ly ranks oil and gas as the top North Dakota export, but local experts say that
number is inaccurate because it includes oil that travels via pipeline tem-
porarily into Canada. “Because it leaves the borders of the United States it
has to be tracked as an export but it actually all comes back,” says Heather
Agriculture equipment manufacturers exhibit their products to an inter-national audience in the USA Pavilion at the 2011 Agritechnica show inHanover, Germany. PHOTO: U.S. COMMERCIAL SERVICE
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25www.prairiebizmag.com
Troy HazardGlobal Entrepreneur
and TV HostKeynote Speaker andModerator at Global
Business Connections 2013
Featured Speaker:
Attend the North Dakota Trade Office
Global Business Connections Conference“Where the global business community comes to you”
Tuesday, February 19, 2013 • Best Western Ramkota, Bismarck, NDOnline registration available at www.ndto.com
Global Business Connections Conference is the premierinternational business event in the Midwest. Meet international
business professionals, network with experts, and build relationshipsall while attending keynote speeches and educational sessions
designed to help you expand your internationalvision. Globalization is now – don’t be left behind.
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26 Prairie Business Magazine January 2013
Ranck, U.S. Commercial Service North Dakota director. “So it’s jack-
ing up our export numbers and is a little misleading.” Gorder says his
office doesn’t include oil when it compiles export data and North
Dakota still displays “significant growth” in exports. He expects that as
pipeline issues get resolved in the U.S., oil export numbers will more
accurately reflect the amount actually being exported from the country.
South Dakota exports more value-added ag and food products
than any other item. However, the state also boasts a number of
uniquely diverse companies that actively export and add significantly
to the state’s overall export numbers. Rock Nelson, director of South
Dakota’s International Trade Center in Sioux Falls, notes that
Brookings-based Daktronics, which specializes in products such as
large screen video displays and electronic score boards, and fire engine
manufacturing firm Rosenbauer America export large numbers of
their products annually. South Dakota is also home to several mining
equipment manufacturers, such as MASABA Inc., which recently
received the U.S. Small Business Administration’s small business
exporter of the year award for South Dakota as well as the surround-
ing eight-state region.
Nelson says robust export activities protected many South
Dakota companies during the recent U.S. recession. “Now, with the
economy coming back, they’ll not only have their foreign sales, but
also domestic sales, and they’ll be all the better for it,” he says.
Guides for Testing the WatersFor companies not yet experienced in exporting their products,
getting started can be a daunting task. That’s when the expertise of
trade offices can be of crucial assistance.
The NDTO was formed seven years ago as a public-private part-
nership in order to provide education, research, advocacy and leader-
ship to North Dakota companies to develop and expand their export
businesses. The member-based organization is led by a board of direc-
tors, chaired by Lt. Gov. Drew Wrigley. Currently, the NDTO has about
70 members, including large equipment manufacturers and value-
added ag producers such as the North Dakota Mill, but the organiza-
tion also provides assistance to non-members at no cost. It assists with
export activities related to commercial products as well as commodi-
ties, and collaborates with the USDA Farm Service Agency or the
USCS, depending on the product being exported.
The NDTO is the facilitator of STEP (State Trade and Export
Promotion) ND, a SBA grant program aimed at strengthening export
sales by reimbursing companies for some of the expenses associated
with initiating or expanding export businesses. This is the first year
North Dakota has participated in the national program. The NDTO
was awarded approximately $670,000 in late September and has one
year to expend those funds to qualifying businesses. It is expected that
up to 75 North Dakota companies could receive assistance through the
program, 40 of which are anticipated to be new exporters. Gorder says
the program will be useful in attracting new exporters, particularly
small businesses, because it helps alleviate some of the financial risk
associated with developing international relationships. “There are
companies we’ve been talking to that are interested in exporting but
haven’t made the commitment,” he says. “Now a portion of their costs
to go visit a potential distributor, or attend a trade show in a foreign
country, or a show in the U.S. that has foreign buyers can be under-
written. It allows a company to seriously take a look at a market that
they may not without that risk sharing.”
STEP funds will be distributed on a first-come, first-serve basis
until all funds are exhausted or until the program reaches its
September deadline. The NDTO had received approximately 30 appli-
cations within the first two months of the program, according to
Gorder, who says he expects the funds will be fully distributed by the
fourth quarter of the program’s year.
In South Dakota, the ITC is part of the University of South
Dakota’s Small Business Development Center and provides its export
and import advisory services at no cost. Nelson says he does “anything
and everything” to help businesses in their export ventures, from
locating interpreters to obtaining freight quotes and clarifying docu-
mentation requirements. “I do not profess to know all the answers but
I surround myself with an excellent group of third-party service
providers who do know,” he says. In the 14 years since his office was
established, it has become the state’s “go-to” source for international
freight questions, according to Nelson, who says he works closely with
the U.S. Customs and Border Protection office at the Sioux Falls
Regional Airport. The center’s collaborators also include the
Governor’s Office of Economic Development and the Sioux Falls
Development Foundation. The ITC facilitates the STEP program for
South Dakota and participates in educational workshops hosted by
the GOED and the U.S. Department of Commerce at various loca-
tions throughout the state that address the regulatory specifics regard-
ing merchandise export activities.
Representatives from Superior Inc., a steel grain bin and grain dryermanufacturer based in Kindred, N.D., received the U.S. Department ofCommerce’s Export Achievement Certificate Oct. 1, 2012, in recognitionof its expansion to foreign markets utilizing the U.S. CommercialService. Pictured left to right are U.S. Congressman Rick Berg; SuperiorInc. owner Claire Rauser; Jon Engelstad, international sales manager atSuperior Inc., and Heather Ranck, international trade specialist withUSCS. PHOTO: U.S. COMMERCIAL SERVICE
|TRADE|
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The USCS is the federal government’s trade agency for commer-
cial products. Its local offices are located in Fargo and Sioux Falls.
Representatives from those locations often work closely with the ITC
and the NDTO, providing international support through USCS offices
in consulates worldwide. “While I’m only one person here in Fargo, we
have a direct line to assistance for companies in every country of the
world,” Ranck says. “We are a phone call away from any country for
any U.S. company.”
Most of the services provided by the USCS are also free of charge
and are customized for each business. The agency does charge a fee for
its Gold Key Matching Service, however, which includes meetings
arranged with pre-screened potential trade partners, market research
conducted by the USCS and travel planning assistance. Ranck esti-
mates that companies interested in Gold Key services can expect to
spend about $1,000. When combined with a trade mission to the
country of choice, the company’s total costs, including hotel, airfare
and interpreter, are generally around $5,000, she says.
Meeting and Greeting For merchandise manufacturers, face time with potential inter-
national distributors is an important component of the export
process, particularly for makers of specialized products such as
machinery, which often require some description of the product, as
opposed to agricultural commodities that require little explanation. To
help facilitate face-to-face meetings with potential partners, Ranck
organizes two to three group trade missions for North Dakota compa-
nies each year. International trade shows present another opportunity
for face-to-face networking and may be a better option than trade mis-
sions for some companies, depending on the type of product they are
marketing, Ranck says. She estimates that she arranges about 50 sin-
gle-company trips, often centering around a trade show, each year.
In March, the NDTO, together with the North Dakota agricul-
ture department and North Dakota State University’s Northern Crops
Institute, will host two events in China focused on North Dakota com-
modities. The China-North Dakota “Better for You Foods” conference
and exhibit is part of a larger initiative to help North Dakota compa-
nies build strong relationships with China and fulfill the market’s
growing need for products, according to the NDTO. “North Dakota’s
success in China will initially be on the commodities side,” Gorder
says. “We’re also doing a tempered push to get the ag equipment indus-
try in China plugged in to North Dakota manufacturers.” Gorder says
the NDTO would like to bring a large contingency of large-scale farm
operators and equipment dealers from China to this year’s Big Iron
Farm Show, an annual agriculture equipment show held in Fargo and
often attended by international delegations recruited with assistance
from Ranck’s USCS office.
South Dakota’s export programs are admittedly less robust,
Nelson says, but he commends North Dakota’s legislative leadership
for including South Dakota in many of its activities and says his state
looks to follow in its northern neighbor’s footsteps. “It has a headstart
so we’re taking some ideas that North Dakota has, and they’re gracious
enough to include us in their plans and trade missions,” he says.
Canada continues to be the leading U.S. trade partner, and will
likely remain the region’s main customer for some time. Other leading
markets for northern Plains states include Mexico, China, Japan,
Germany and, in North Dakota, Belgium and Australia. Trade growth
has also recently been experienced between North Dakota and
Uruguay, Ukraine, and Kazakhstan. Gorder says his office has been
focused on developing relationships with former Soviet Union coun-
tries. “Starting in 2005-’06, there was a very concerted effort to make
entry into Russia, Ukraine and Kazakhstan,” he says. “That has been
successful.”
One of the most popular stories to sprout from the export devel-
opment between former Soviet Union countries and North Dakota
has been the sale of beef cattle to Kazakhstan, which Gorder says was
initiated during a 2006 trade mission to the country. It took four years
to finalize the deal, a length of time which he says is not uncommon
for export arrangements, and the first shipment of western North
Dakota’s hardy beef cattle was flown from Fargo to Kazakhstan in
2010. To date, more than 5,000 Angus and Hereford cattle have been
flown to Kazakhstan and thousands more are expected to be pur-
chased, according to the NDTO. In November, the NDTO organized a
reverse trade mission to bring 15 Kazakh ranch owners and cattle han-
dlers to North Dakota to learn cattle ranching from North Dakota
ranchers. “As with any successful trade relationship, prior to and after
sales it is necessary to continue to share information about the prod-
ucts being exchanged,” Gorder says. PBKris Bevill
Editor, Prairie Business701-306-8561, [email protected]
Cattle are loaded on an airplane for the first shipment of cattlefrom North Dakota to Kazakhstan in October 2010. PHOTO: NORTH DAKOTA TRADE OFFICE
|TRADE|
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28 Prairie Business Magazine January 2013
|RED RIVER VALLEY|
John Deere Electronic Solutions’ recent expansionin Fargo, N.D., includes a new 90,000 square footbuilding that will be used primarily for engineeringand product development and testing.PHOTO: JOHN DEERE ELECTRONIC SOLUTIONS
John Deere invests millions to expand production in NDCompany finishes $22 million expansion in Fargo, begins $20 million project in Valley CityBY KRIS BEVILL
Increasing agricultural demands worldwide
have led to expansion projects at John
Deere Co. facilities in Fargo and Valley
City, N.D., where workers are churning out a
variety of components and products to meet
the company’s clients’ needs.
John Deere Electronic Solutions held an
inauguration event Oct. 9 to celebrate the com-
pany’s new $22 million, 90,000-square-foot
building in north Fargo. The facility has some
manufacturing capabilities but will primarily
be used for engineering and product develop-
ment and testing, according to Tom Budan,
general manager of JDES.
JDES, which was established in 1987 as
Phoenix International and purchased by John
Deere in 1999, develops electronic components
and systems used in John Deere equipment. The
company has been expanding its presence in
Fargo over the past several years and had out-
grown its other facilities, Budan says. The new
location allows the company to bring together
some of the workers who had previously been
scattered throughout the Fargo metro area in
various locations. “[It] has allowed us to really
consolidate some of our operations around the
Fargo-Moorhead area,” Budan says, adding that
he expects relocation and reorganization activi-
ties to continue at the new facility throughout
2013.
Currently, JDES employs approximately
1,000 people at six locations in Fargo. The new
facility offers the capacity to accommodate fur-
ther growth, but Budan says product demand
from John Deere’s worldwide customer base
will dictate future expansions. Some demand
growth is expected to continue domestically,
but the bulk of the company’s increasing
demand will likely come from emerging mar-
kets overseas. “As those markets continue to
grow, Deere is going to do everything we can to
serve those markets,” Budan says. “Our equip-
ment demands advanced electronics to make it
productive and capable and that’s where John
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29www.prairiebizmag.com
|RED RIVER VALLEY|
Deere Electronic Solutions comes in. If it’s a
John Deere product, regardless of where it’s
made, there’s a good chance it has a component
in it that John Deere Electronic Solutions
played a role in.”
On Nov. 27, John Deere Seeding Group
Valley City broke ground on a $20 million
expansion project that will provide an addition-
al 100,000 square feet to the company’s manu-
facturing operations. John Deere initially
opened its Valley City facility in 1996 to build
tillage and air seeding equipment for customers
worldwide. Now, with more than 300 employ-
ees, it is the largest employer in the town of
about 6,500 people. The expansion project
could add 50 to 100 new manufacturing and
administrative positions over the next five years,
says Jeff Kennedy, employee relations manager.
“This is going to be huge for Valley City, both for
the factory as well as for the city,” he says. The
expansion project is expected to be complete by
fall 2014 and will increase John Deere’s space in
the facility by 33 percent, he says.
North Dakota Gov. Jack Dalrymple
attended the Fargo facility’s inauguration and
the groundbreaking ceremony at the Valley City
location and said in statements released after
the events that the expansion projects were a
testament to North Dakota’s strong business cli-
mate. Budan supported that comment, noting
that global companies such as John Deere have
many options when considering expansion
projects. “When we decide to expand an opera-
tion or put a new facility in place we have lots of
alternatives and we look at many things when
making the choice,” he says. “Certainly when
you look at North Dakota, you look at the work
ethic, the talent of the people, but you also look
at the governmental climate as well. Both at the
municipal level … and the state level, we believe
John Deere’ story is always very well received.”
PB
Kris Bevill
Editor, Prairie Business
701-306-8561, [email protected]
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30 Prairie Business Magazine January 2013
|SOUTH DAKOTA|
Aprogressive mindset and can-do attitude
has brought the 1,100-resident rural
community of De Smet, S.D., to the fore-
front in terms of economic development. The
community, birthplace of Laura Ingalls Wilder,
recently welcomed two new manufacturing busi-
nesses, American Engineered Products Inc. and
Sheyenne Dakota Inc. Through SDI alone De
Smet workers have approximately 30 new job
opportunities. Based on 2010 population com-
parisons, De Smet’s job growth is equivalent to
4,329 new jobs in nearby Sioux Falls.
Rita Anderson, De Smet director of econom-
ic development, attributes the community’s suc-
cess to the progressive attitude, a longtime hall-
mark of this east-central South Dakota communi-
ty where Anderson grew up.
“De Smet’s city leaders began building indus-
try here as early as 1966,” Anderson says. “It’s fun to
see people tour our industrial park for the first
time. Most don’t realize how many companies are
here. Lyle Signs, CMI Architectural Products,
UltiMed, Legend Seeds and DeSco Architectural all
have long traditions of operating in De Smet. We’re
also proud that De Smet is home to Farm Mutual
Insurance Company.”
Among De Smet’s assets is a strong infra-
structure supporting industrial growth and a
thriving industrial park.
“Three years ago we started working to fill a
10,000-square-foot spec building shell in the
industrial park,” Anderson says. “We attended a
network of trade shows across the U.S. We target-
ed medical device companies and sports compa-
nies. We also worked with the South Dakota
Governor’s Office of Economic Development to
identify opportunities. That office played a huge
role in helping us achieve our goals.”
Once they identified potential new business-
es, Anderson and city leaders as well as other De
Smet businesses cooperated to make moving to
their community as convenient and trouble-free
as possible.
“We contacted businesses that seemed like a
good fit and worked to identify resources they
needed,” Anderson says. “We focused on needs in
the spec building and financial assistance. We did
all we could to put them in touch with local
resources and worked with them to resolve prob-
lems that arose during the process.”
SDI, a wire and cable harness manufacturer
headquartered in West Fargo, needed a labor pool
to accommodate expansion. The North Dakota oil
boom made it difficult for the company to find
that resource.
“We worked through the Governor’s Office of
Economic Development in South Dakota and let
them know what our needs were,” SDI CEO Dave
Ingalsbe says. “We had about 19 South Dakota
communities respond to our inquiry about ade-
quate labor. In De Smet we found the type of labor
pool we were looking for and a building that fit our
needs very well. Everyone in the community
seemed welcoming and helpful. We highly compli-
ment the GOED office and De Smet community.
They have all been very good to work with.”
AEP’s Audrey Saylor, company co-owner
with Mike Wiese, says they believed their slot bases
for casinos and video lottery and flagpole business
would thrive in a smaller community.
“We needed to operate in a cost-effective
atmosphere,” Saylor says. “We like the lower key
lifestyle here. De Smet is more rural, but also a
thriving, forward-looking community. Assistance
we’ve had in meeting resource needs has been phe-
nomenal. It’s remarkable to see a community this
size embrace industrial development. I’m certain
that played a key role in growth here.”
Anderson and her team have already plunged
into a new development project. Promoting De
Smet’s industrial growth will be an ongoing
process. “This has all been accomplished through
great team effort,” Anderson says. “That’s a long-
time spirit of this community. They capitalize on
what’s here and build on it.” PBLoretta SorensenContributing writer
605-660-0378, [email protected]
Despite its rural locale, De Smet, S.D., ishome to a thriving industrial park, due inpart to its available workforce. PHOTO: DE SMET CHAMBER OF COMMERCE
De Smet draws in industrial park tenants Manufacturing companies attracted to rural area, available workforceBY LORETTA SORENSEN
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31www.prairiebizmag.com
REDUCING41%
INCREASING
THE UNIVERSITYOFNORTHDAKOTAGORECKI ALUMNI CENTER IS
MAKING ITS MARK ON CAMPUSBY LEAVING LESS OF ONE
SAVING
GALLONS OFWATER PER YEAR
48,260
DIVERTING
TONS OF WASTE72.6
PRODUCING
HOMES WORTHOF ENERGY
42OF ENERGY USEPER YEAR
STAFF PRODUCTIVITY
15%
IMPROVINGAIR QUALITY
15%ELIMINATING
CO2 EMISSIONS14%
PREVENTING90%
OF RAINFALL-RELATEDPOLLUTION
LOWERING15SUMMER
TEMPERATURES
jlgarchitects.comSeeking North Dakota’s First LEED PlatinumCertification
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32 Prairie Business Magazine January 2013
|WESTERN NORTH DAKOTA|
Bidding on BowmanPifer’s Auction & Realty builds large auction hall in BowmanCounty, inaugurates facility with first-ever mineral lease auctionBY KRIS BEVILL
Bowman County, located in the extreme south-
western corner of North Dakota, bills itself as the
“heart of North Dakota’s oil and agriculture
industries.” The sparsely populated county — about
3,000 total residents, or 2.7 people per square mile,
according to the most recent U.S. census data — leaves
plenty of wide open spaces for beef cattle, crops and oil
and gas development. It is the fifth largest oil-producing
county in the state and supports thriving livestock and
agricultural industries, according to the county’s website.
It was that combination of energy and agriculture
that helped make Bowman County the winning choice
for Moorhead, Minn.-based Pifer’s Auction & Realty
expansion plans. The full-service auction and real estate
firm serves markets throughout various locations in the
Midwest and had spent several years analyzing potential
locations in western North Dakota before settling on a
site near Bowman for its recently opened auction hall.
Company President Kevin Pifer says the county’s rich
diversity in energy and ag was a factor in the firm’s deci-
sion to locate there, along with the fact that the firm’s
existing two-person team in Bowman, Andy Mrnak and
Jim Sabe, has been successful in building up business in
the area. “They have done an exceptional job in Bowman
and have garnered a lot of trust from people in that part
of North Dakota and in the northern part of South
Dakota and eastern Montana,” he says. “When you factor
in what we already have in place down there, the econo-
my and also the city of Bowman and county are very
well run entities … it just seemed like such a perfect fit
for our company in western North Dakota.”
The company invested more than $500,000 in the
new facility, which Pifer says is “probably the nicest auc-
tion hall in the state of North Dakota” and is the firm’s
largest investment in a noncorporate office to date. The
location now officially serves as Pifer’s western North
Dakota regional office.
Before building the facility, Pifer’s typically held
equipment auctions at the Bowman County arena and
land sales at the Bowman Golf Course. The new facility
allows the firm to bring everything under one roof and
also expands its auction capabilities to include large
machinery and construction equipment, Pifer says.
The facility’s inaugural event was a farm machinery
and construction equipment auction held outdoors in
early October. Soon after, the firm held its first indoor
event at the facility which included thousands of acres of
land and the firm’s first ever mineral lease auction, con-
sisting of 800 mineral acres located in the Scranton area
of Bowman County. Pifer estimates that about 200 peo-
ple attended the evening event, most of them interested
in land acreage up on the auction block. However, the
mineral lease sale was also successful, he says, and
brought in slightly higher selling prices than the firm
had anticipated. Pifer says between 20 and 25 people
showed interest in the mineral lease portion of the auc-
tion and four or five entities bid “rather aggressively” on
the leases, which were won for about $300 per acre.
Bidders were a mix of private individuals, conglomerates
and private equity firms. PBKris Bevill
Editor, Prairie Business701-306-8561, [email protected]
Pifer’s Auction & Realty expectsto utilize its recently openedauction hall near Bowman, N.D.,for large equipment auctionsrelated to energy developmentin western North Dakota.PHOTO: PIFER’S AUCTION &REALTY
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33www.prairiebizmag.com
|BUSINESS TO BUSINESS|
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Brad Boyd 1.800.641.0683 • [email protected]
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kljeng.com
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34 Prairie Business Magazine January 2013
As energy consumption continues to rise
throughout our region, electricity
providers are working to increase the
input of electricity available for their cus-
tomers. At the same time, providers of coal-
based electricity are trying to keep ahead of
increasingly stringent regulations by installing
new technologies aimed at reducing the
amount of emissions they produce.
Grand Forks, N.D.-based Minnkota Power
Cooperative provides electricity to 11 member-
owner distribution cooperatives across 34,500
square miles in eastern North Dakota and north-
western Minnesota. Electricity to serve its mem-
bers’ needs is generated at a large coal-based power
plant located about 40 miles northwest of Bismarck
near Center, N.D., and sent through transmission
lines to its distribution customers. The plant,
known as the Milton R. Young Station is a mine-
mouth plant, meaning it is located adjacent to its
coal source, in this case the BNI Coal Center Mine,
and has been operating since 1970. Two electricity
producing units at the plant represent a combined
705,000 kilowatts of generating capacity.
In 2011, Minnkota completed a series of
environmental upgrades at its plant as required
by federal regulators. The changes were installed
over the course of several years at a total cost of
$425 million and consisted of upgrades to reduce
the amount of sulfur dioxide and nitrogen oxides
(NOx) emitted from both units. The emission
reduction improvements required the support of
additional electrical infrastructure, which con-
tributed to the project’s total cost.
Also in 2011, the cooperative embarked on
another improvement project at its own behest,
installing technology developed by Colorado-
based Clean Coal Solutions LLC, which enables
Playing the regulatoryguessing gameMinnkota Power Cooperative tests emissions reduction technology at its coal-fired power plantBY KRIS BEVILL
the plant to reduce its mercury emissions by 40 per-
cent and its NOx emissions by 20 percent from pre-
vious levels. John Graves, environmental manager
at Minnkota, declined to release the cost of the
Clean Coal Solutions technology, but says the
installation of the technology is part of the cooper-
ative’s strategy to stay in compliance with anticipat-
ed tightening emissions regulations.
“Environmental regulations are always becoming
more stringent as times goes on,” he says. “So we’re
trying out new technologies and participating in
improvements that will bring us up to where we
think we will need to be. It just makes good sense to
do that.”
Minnkota is the first lignite coal plant in the
U.S. to apply Clean Coal Solutions’ technology,
dubbed CyClean, which is a combustion additive
technology designed to improve operability and
reduce emissions from cyclone boilers, according to
Clean Coal Solutions. Graves says the cooperative
will evaluate the technology’s performance at the
Young Station for a number of years. “We are really
looking at this as a long-term demonstration proj-
ect because anytime you do something different at
a power plant of this type, you don’t really know
what long-term impacts it may have,” he says. “We
are optimistic that this technology will be a benefit
to us but we are always cautious.”
Future environmental improvement projects
will be undertaken as required by regulations or as
deemed to otherwise benefit the plant, particularly
along the lines of efficiency improvements, accord-
ing to Graves.
Minnkota is also in the process of installing a
250-mile long transmission line that will boost grid
stability in the northern Red River Valley. The
transmission line will extend from the power plant
near Center to Minnkota’s substation in Grand
Forks and is expected to be operational by the end
of 2013, Graves says. It has been three decades since
a transmission line project of this magnitude has
been carried out by Minnkota. Graves says the new
line is a reflection of the increasing energy demands
from consumers and businesses. “We all use more
energy today than we did 20 years ago or even 10
years ago, so therefore the time was right and the
need was there,” he says.
The total project is expected to cost $312 mil-
lion, an expense which Minnkota anticipates will
translate into increased rates for customers. PBKris Bevill
Editor, Prairie Business701-306-8561, [email protected]
Minnkota Power Cooperative provides electricity to distribution cooperatives across east-ern North Dakota and northwestern Minnesota from its 705,000 kilowatt coal-fired powerplant near Center, N.D., known as the Milton R. Young Station. PHOTO: MINNKOTA POWER COOPERATIVE
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36 Prairie Business Magazine January 2013
|ENERGY|
The addition of gas gathering lines and natural gas processingplants is helping to alleviate flaring in the Bakken region of westernNorth Dakota, but approximately 30 percent of gas produced is stillbeing flared. SOURCE: NORTH DAKOTA PIPELINE AUTHORITY
The North Dakota Pipeline Authority
hosted a webinar Dec. 18 that presented
various alternatives to flaring natural gas
at well sites throughout the Bakken region as part
of an increased effort to encourage producers to
begin utilizing methods that reduce flaring.
The state’s historical high for flaring was 36
percent in September 2011. About a third of all
gas produced at Bakken wells is still being
flared, despite the recent addition of new gas
gathering lines and processing plants. Lynn
Helms, director of the North Dakota
Department of Mineral Resources, said during
the webinar that 796 million cubic feet per day
of gas was produced in October, of which about
240 million cubic feet per day was flared.
Helms said the state has set a target to
reduce flaring in the Bakken to below 10 percent
of all gas produced, but because the amount of
gas being produced is increasing, by the time the
reduction is achieved there will still be more gas
flared than at the current time. “So short term
and long term, there’s tremendous opportunity
for the utilization of flared gas,” he said.
Some of the opportunities to utilize
Bakken gas include fertilizer production, con-
version to methanol, or for use as a fuel to dis-
place diesel required for drilling rigs, hydraulic
fracturing pumps and other equipment. A
number of presenters offered their solutions to
efficiently capture and utilize gas produced at
Bakken wells, several of whom touted their
technologies’ mobility, a valuable characteristic
for producers who anticipate moving from well
to well.
Blaise Energy, a Bismarck, N.D.-based
company, is the first company in North America
to generate renewable energy credits from recy-
cling flared gas, according to Mark Wald, presi-
dent. His company has developed a method to
convert unprocessed wellhead gas into electrici-
ty which can be used to power the site or can be
sold back to the grid. The company is also part-
nered with the University of North Dakota’s
Institute for Energy Studies to develop a poly-
generation facility that could convert residue
gas to methanol.
Jeremy Dockter of Expansion Energy, said
one of the uses for the small-scale liquefied nat-
ural gas (LNG) technology developed by his
company could be to replace diesel fuel needs at
a well site. The company recently signed a tech-
New technologiesutilize flared gas North Dakota encourages Bakken producers todeploy strategies that reduce flaringBY KRIS BEVILL
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37www.prairiebizmag.com
|ENERGY|
nology license agreement with Dresser-Rand, which plans to
introduce the mobile LNG production units to the market in
the third quarter of 2013. Dockter said oil producers have
shown a high level of interest in this type of technology and he
encouraged interested producers to get their order for units in
the queue as soon as possible.
Helms said that while the Industrial Commission has not
rigorously enforced current flaring limitations due to the large
price differential between oil and gas, as more technologies are
introduced that enable producers to utilize gas, the commission
is “eager” to more actively enforce its policies. He said he also
anticipates legislation to be introduced this session that will
“change the landscape” in terms of tax exemptions, liability
concerns and the reporting of utilized natural gas to the com-
mission. “This will be a big piece of the puzzle of North
Dakota’s flare gas,” he said. PBKris Bevill
Editor, Prairie Business701-306-8561, [email protected]
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38 Prairie Business Magazine January 2013
Employment UNEMPLOYMENT RATE EMPLOYMENTSep-12 Sep-11 Sep-12 Sep-11
North Dakota 3.00% 3.60% 376,592 371,039Fargo MSA 2.8 3.5 117,519 117,859Bismarck MSA 2.2 2.7 60,634 60,435Grand Forks MSA 3.2 4.2 51,774 53,552Minot MiSA 2.4 3 32,597 33,484Dickinson MiSA 1.4 1.7 19,391 18,093Williston MiSA 0.7 1 36,393 26,270Jamestown MiSA 2.6 3 9,992 10,802Wahpeton MiSA 3.1 3.9 11,068 11,821South Dakota 4.40% 4.50% 422,824 425,909Sioux Falls MSA 3.7 3.9 123,757 124,427Rapid City MSA 4.1 4.1 64,028 64,925Aberdeen MiSA 3.2 3.3 22,561 22,288Brookings MiSA 3.1 3.4 18,245 18,169Watertown MiSA 3.1 3.7 18,761 18,369Spearfish MiSA 4 4 12,298 12,720Mitchell MiSA 3.1 3.3 13,075 12,809Pierre MiSA 3.1 3.1 11,702 11,798Yankton MiSA 3.5 4 11,265 11,174Huron MiSA 2.9 3.2 9,767 9,678Vermillion MiSA 3.4 3.4 7,354 7,262Minnesota 5.80% 6.30% 2,799,472 2,785,281Minneapolis-St. Paul MSA 5.3 5.9 1,764,116 1,750,922Brainerd MiSA 6.3 6.8 45,086 46,237Winona MiSA 4.8 5.4 28,492 28,657Fergus Falls MiSA 4.6 5 30,013 30,277Red Wing MiSA 4.8 5.4 24,905 24,778Willmar MiSA 4.5 4.7 23,621 24,598Bemidji MiSA 6.3 7 21,504 21,146Alexandria MiSA 4.1 4.7 20,690 20,519Hutchinson MiSA 6.1 6.2 18,733 19,910Marshall MiSA 4 4.5 14,863 14,810Worthington MiSA 4.1 4.6 11,272 11,139Fairmont MiSA 5.1 5.8 10,533 10,989
Data provided by David Flynn, chair of the University of North Dakota Department ofEconomics. Reach him at [email protected].
Date
Jan2000
Jan2002
Jan2004
Jan2006
Jan2008
Jan2010
Jan2012
Jan2014
Percent (%)
7
6
5
4
3
2
1
0
Federal Funds Rate
10-yr treasury, constant maturity
Date
Jan2000
Jan2002
Jan2004
Jan2006
Jan2008
Jan2010
Jan2012
Jan2014
Canadian dollar per U.S. dollar
7
6
5
4
3
2
1
0
Fuel ethanol, million barrels per day
DateJan 2008 Jan 2009 Jan 2010 Jan 2011 Jan 2012 Jan 2013
0
9
8
7
6
5
4
3
2
1
Interest Rates
Exchange
Natural Gas Price and Production
Ethanol Production
68
66
64
62
60
56
54
52
50Natural Gas US Average Wellhead Price. $per thousand cu feet
Natural Gas Total US Marketed Production, billion cubic feet per day
DateJan 2008 Jan 2009 Jan 2010 Jan 2011 Jan 2012 Jan 2013
1
0.95
0.9
0.85
0.8
0.75
0.7
0.65
0.6
0.55
0.5
|BY THE NUMBERS|
PRODUCING OIL WELLSSept 2012 7,798
Sept 2011 6,071
AVERAGE DAILY BARREL PRODUCTIONSept 2012 728,494
Sept 2011 488,066
TOTAL WELL PERMITSSept 2012 273
Sept 2011 176
AVERAGE RIG COUNTSept 2012 190
Sept 2011 197
PRICE PER BARRELSept 2012 84.98
Sept 2011 83.50
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