Federal Grant, DAPL Settlement Mark Key Week for North Dakota Energy

The U.S. Department of Energy has officially awarded $36 million to a major initiative aimed at unlocking the next stage of oil production from the Bakken formation, according to an announcement by Sen. John Hoeven. The funding is part of the $157 million "Crack the Code 2.0" project, which includes contributions from the state and several oil companies, and aims to develop cost-effective enhanced oil recovery (EOR) technologies.

The effort will be led by the Energy and Environmental Research Center (EERC) at the University of North Dakota and will involve multiple large-scale pilot projects run by four different oil companies. "The key component of all of this is the EERC," said North Dakota Petroleum Council President Ron Ness. "We’ve got to bring the best of all those ideas together. That’s what the EERC does."

The federal funding comes as the EERC recently faced staffing cuts due to funding delays. UND confirmed 27 positions were cut and 13 employees were furloughed, with intentions to bring furloughed workers back when funding is available. Hoeven said the DOE award, available immediately, along with the renewal of a $25 million cooperative agreement, will help.

The project targets the economic challenge of applying EOR in shale formations like the Bakken. Lynn Helms, former state oil regulator and now leading EOR efforts with the Petroleum Council, said smaller pilot projects have shown increased oil recovery but not at economic levels. "That’s what these major, large demonstration projects are all about... The costs are very, very high," Helms said. The new pilot projects, scheduled to begin over the next 12 months, will be on a much bigger scale, according to John Harju, a vice president with the EERC.

In a separate federal matter, a nearly seven-year lawsuit over state costs from Dakota Access Pipeline (DAPL) protests is nearing a settlement. A federal district court judge has indicated he will nullify a nearly $28 million judgment against the federal government so the parties can settle, according to a hearing held Friday.

North Dakota is still set to receive a "substantial monetary payment" described as satisfactory by Attorney General Drew Wrigley, though the amount was not disclosed. The lawsuit, filed in 2019, claimed the federal government caused protests to grow by allowing demonstrators to camp on federal land, forcing the state to pay millions for policing and cleanup.

Attorneys for both sides said the settlement would avoid a lengthy appeals process. "We’re hoping we really don’t need to fight any further," said Department of Justice attorney Jonathan Guynn. A condition of the settlement is that Judge Daniel Traynor's 2025 judgment and related orders be voided to prevent their legal conclusions from influencing future lawsuits.