prairie business august 2012

www.prairiebizmag.com

August 2012

ALSOTech School TrendsTwo-year schools makingaccommodations to meetworkforce needspg. 28

Oil Boom OriginHydraulic fracturing, horizontaldrilling key to Oil Patch successpg. 32

ProgressivePartnerships

More businesses forming researchand development collaborations

with colleges, universitiespg. 24

North Dakota. Doing Business Better.

Great River Energy chose North Dakota as the site of three power plants for twoprimary reasons: the state’s ample energy sources and its business-friendlyenvironment. This has helped Great River Energy generate and transmit reliable,competitive and environmentally friendly electricity over four decades. Learn howthe North Dakota Department of Commerce and companies in the state aredoing business better at www.NDBusiness.com

Photo courtesy of Great River Energy

4 Prairie Business Magazine August 2012

|INSIDE|AUGUST ISSUE 2012 VOL 13 ISSUE 8

FEATURES DEPARTMENTS6 Editor’s Note

BY ALAN VAN ORMER

Research and Development bringprivate companies, universitiestogether

8 Business AdviceBY MATTHEW D. MOHR

Looking for smart employeeswho want to work

10 FinanceBY DAN HANNAHER

SBA launches renewed,simplified loan products

12 Research & TechnologyBY BRUCE RAFERT

Public, private partnershipstied to business success

14 Economic DevelopmentBY PAT COSTELLO

GOED renews focuson international markets

16 Prairie News

20 Prairie People

22 Business DevelopmentMarketing planshowcasing Grand Forks

34 Red River ValleyRed River Valley in the‘cloud’

36 South DakotaAvera plans to expand

38 Western North DakotaHousing/business projectplanned in western N.D.

40 Energy

46 Business to Business

Next MonthIn September's transportation issue, Prairie Business will offer an update on the expanding air travel and railway infrastructure throughoutthe region, including new airline carrier services in Williston, airport expansions throughout the region and newly built rail amenities toaccommodate increased demands from multiple industrial sectors. The issue will also include an examination of plans to expandDickinson, N.D., as a result of booming oil production, and how lessons learned from past growth cycles will influence the latest build-out.

On the CoverAditi Kondhia, a graduate student in theApplied Crop Genetics and Genomicslaboratory and in the Winter WheatBreeding Program (or SDSU WheatGroup) at SDSU, harvest seed from awheat population developed to study thegenetics of resistance to orange wheatblossom midge in wheat.PHOTO: ALAN VAN ORMER

24 HIGHER EDUCATIONMeeting of the MindsResearch and development partnerships betweenprivate companies and universities benefit both

WORKFORCE DEVELOPMENTTracking the Job MarketAg, energy, health care, socialmediamarketingandwelding popular areas of study at tech schools

TECHNOLOGYGame-Changing TechnologyHydraulic fracturing and horizontaldrilling driving profits in theOil Patch

28

32

Scan this with your smartphone'sQR Reader to visit our website.


|EDITOR’S NOTE|

ALANVAN [email protected]

R&Dbrings privatecompanies, universities together

It’s that time of year when Prairie Business magazine discusses what is happening in the higher education

environment. This month’s cover story is about how companies are utilizing colleges and universities to

help with their research needs.

Using higher education institutions such as North Dakota State University in Fargo, the University of North

Dakota inGrand Forks and SouthDakota StateUniversity in Brookings, is becoming common for companies that

are looking for faculty and staff to help bring their products to commercialization.

It is occurring across the nation, as well. Dwaine Chapel, executive director of the SDSU Innovation

Campus, attended a national bioconference in Boston recently. During that conference, Chapel learned that

39 percent of companies will be merging and doing research together, while 41 percent were turning toward

university relationships and 20 percent were still doing their own research and development.

Our region is seeing that growth. For example, the South Dakota Board of Regents has been keeping track

of research awards since 2000. In 2002, there were 920 awards submitted, 702 awarded for more than $172 mil-

lion. In 2011, the latest data gathered as of July 6, there were more than 1,100 awards submitted, 772 awarded

for more than $426 million. The total research expenditures from grants and contracts in 2007 were more than

$74 million. In 2011, that number jumped to more than $124 million.

At NDSU, the campus has been seeing a high volume of com-

panies involved with research and technology for at least a decade.

In the past six years, NDSU has developed more than 330 research

contracts with the private sector and more than 1,800 federal con-

tracts. In addition, there are significant numbers of students

involved in some type of research with companies on campus. The

school has had or has 35 private sector research partners. In addi-

tion, NDSU ranks in the top 108 universities in the nation with

high research activity, according to Carnegie Commission on

Higher Education.

And the companies are benefitting.Many will tell you that the

reason they are choosing a region or a community is because of the

expertise and knowledge that are available at universities in the

region. It provides them an opportunity to float ideas by faculty

and staff, work with universities to improve a product, use the

research expertise and hire quality graduates and use the technolo-

gy and equipment available on campus to test those products.

As you can tell, it is working.Now, the challenge is to continue

this success with the challenges that lie ahead in the future.

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7www.prairiebizmag.com

An SBA Award Winning Publication

MIKEJACOBS, PublisherALANVANORMER, EditorTINAFETSCH, Production ManagerBETHBOHLMAN, Circulation ManagerJENBRAATEN, Marketing ManagerJOEGREENWOOD, Multi-Media ConsultantKRISWOLFF, Layout Design, Ad Design

Sales Director:JOHNFETSCH - eastern ND/MN/eastern SD701.212.1026 [email protected]

Sales:BRADBOYD - western ND/western SD800.641.0683 [email protected]

SHELLYLARSON - eastern ND/western MN701.212.1026 [email protected]

Editor:ALANVANORMER701.371.9578 [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;NancyStraw, 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.

Subscriptions Free subscriptions are availableonline to qualified requestors atwww.prairiebizmag.com

Address correctionsPrairie Business magazinePO Box 6008Grand Forks, ND 58206-6008Beth Bohlman: [email protected]

Onlinewww.prairiebizmag.com


|BUSINESS ADVICE|

Looking for smartemployeeswhowant toworkBYMATTHEWD.MOHR

In the spring we conduct graduation ceremonies for our

students who complete a level of their formal education.

Graduation isamilestoneandasteppingstone fora future

career. In the fall, our schools are filled with the excitement of

new students seeking bright futures. The better educated are

usually rewardedthroughlifewith larger incomesandwhatare

considered better jobs and lifelong careers.

Unfortunately, our strong reliance on formal educa-

tion has led many to believe a degree is what is needed to

command an income regardless of what the educationmay

have entailed. What one knows (education) does matter,

but it is what one does (produces) with that knowledge

that provides economic gain.

A large part of why Midwesterners are valued as

employees is because of their strong work ethic. In addi-

tion to the willingness to work, we have also accelerated

our general level of education. Midwesterners are viewed

as both smart and hard working. Although one person

may know more than another; pay is based on what is

produced.

A person can be themost knowledgeable in theworld

about the color of eyes in fish, but unless the knowledge is

worthwhile in raising, catching and marketing those fish,

the knowledge is worthless. If a person uses their fish eye

knowledge to raise better,more valued fish or create better

fishing lures, then a good income can be earned. Pure

knowledge of fish eye colorization is of little value.

Although someone may know more about some-

thing than someone else, smart employers pay for the use

of that knowledge to produce bigger, better results.

When looking for employees, look for those who are

smart and want to work. PB

MatthewD.MohrCEO, Dacotah Paper Co.

[email protected]

It’s a competitive world. Train for it.

Williston State College Lake Region State CollegeNorth Dakota State College of Science Bismarck State College

Powered by:

www.trainnd.com

TrainND provides training for NorthDakota business and industry, enhancing

their ability to compete globally.

We’re looking for highly qualified peoplein these industries:

Customer Service RepresentativesFiber Glass FabricationMetal FabricationEmployment VerificationPrinting & Press OperationsElectronics ProductionHealthcareWelding

For further information contact the SDDepartment of Labor at 605.626.2340 ordlr.sd.gov and www.aberdeensd.com

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|FINANCE|

SBA launches renewed,simplified loan productsBYDANHANNAHER

Ourdistrictoffices located inthehighplainsregion

are all committed to one common goal: market

Small Business Administration loan products to

as many urban and rural lenders and small businesses as

possible. We find that once the benefits of working with

guaranteed loans are fully understood, lenders often jump

on the SBAbandwagon.

At SBA,we have created loan products in response

to grassroots private and public sector input. In partic-

ular, we exchange ideas with banks, credit unions, certi-

fied developmen companies, chambers and various

lender associations daily, resulting in collaborative

products and services demanded by small business.

The lessonwe learned over the last couple of years:

keep it simple and in line with what the lending com-

munity knows works best for their customers.

One of our most popular lending programs in the

region is SBAExpress. Providing a 50 percent guarantee,

it gives small business borrowers an accelerated turn-

around time for SBA’s review. You will receive a

response to your application within 36 hours. In addi-

tion, lower interest rates are often available when banks

underwrite through an Express program. For this fiscal

year, as of June 15, SBA has guaranteed the following:

· 85 express loans valued at $6.58 million in

Montana


North Dakota


South Dakota


Wyoming

Heather Knutson, loan officer for Vision Bank in

Fargo, N.D., says SBAExpress is an easy and simple

loan program because it can be used with the bank’s

own underwriting documents. Vision Bank has

processed loans ranging from $3,000 to $350,000;

many of them start-ups.

Other lenders have said that SBAExpress increases

the flow of capital in rural communities because the

guarantee mitigates risk.

Myron Aune, business service manager of Capital

Credit Union in Bismarck, N.D., says SBAExpress is a

good fit because it is quick, convenient and allows the

credit union to meet the needs of small businesses and

manage the risk to the credit union. The program also

plays a pivotal role in rural development because it

increases the credit union’s ability to help local busi-

nesses, including start-ups.

It can be tough for small businesses to manage

their cash flows. They’ve got payrolls to meet, inventory

to buy and customers to please.A revolving line of cred-

it could help small businesses manage their cash cycle.

This is why SBA re-engineered the Capital Lines

(CAPLines) program based on advice from hundreds

of different lenders around the country.

The CAPLines provides a path for these small

businesses to finance contracts while avoiding high-

interest rates through an SBA revolving line of credit.

We expect demand for this product to increase as more

lenders are trained and grasp its benefits. Early fiscal

2012 numbers for CAPLines as of June 15:

� Six CAPLines for $3.7 million in total loans in

Montana

� Three CAPLines for $4.15 million in total loans

in North Dakota

� Two CAPLines for $650,000 in total loans in

Wyoming

SBA is here to help, and we are constantly looking

for ways to provide access and opportunity to the

American small business owner. We encourage poten-

tial borrowers to connect to SBA Direct to find SBA

lenders in your geographic area: www.sba.gov/sba-

direct/. PB

DanHannaherRegional Administrator, Region VIII, SBA

303-844-0505, [email protected]


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|TECHNOLOGY|

Public, private partnershipstied to business successBY J. BRUCERAFERT

Public and private partnerships have provided a

stalwart way to achieve innovation, while pro-

moting economic development and business

success. Research discoveries, coupled with determina-

tion in laboratories, classrooms, dorm rooms, base-

ments and garages, have led to scientific advances and

business innovations. Many people define public and

private partnerships as those based on research collab-

orations. Research universities are in a position to

increase the breadth of that definition.

In “A Stronger Nation” report by the Lumina

Foundation,NorthDakota ranks in the top 10 states in the

U.S. for degree attainment at 44.95 percent as of 2010.

Nearly 45 percent of North Dakota’s working-age adults,

age 25 to 64, hold at least an associate degree. Other states

on the list include Massachusetts, New Hampshire,

Connecticut,Minnesota,New Jersey,Maryland,NewYork

and Vermont.

Statistics from Job Service North Dakota show more

than 20,000 job openings here, many requiring advanced

education or training. With public and private partner-

ships, there are critical ways we can contribute to the

region’s economic success.These include research, training

the future workforce and helping businesses’ current

workforce prepare for ever-changing markets.

Public and private research collaborations promote

economic development. The Centers of Excellence pro-

gram established by the North Dakota Legislature pro-

vides a critical pathway that enables universities and pri-

vate sector partners to promote technology-based eco-

nomic development, increase global visibility of the

region’s products and businesses, create new employment

opportunities and bring university-based scientific discov-

eries to the private sector for commercialization.

For example, North Dakota State University’s

Centers of Excellence and private sector partners engage in

market-driven research and development ranging from

life sciences to advanced electronics to biopharmaceuticals

and agricultural biotechnology. These centers have assist-

ed local companies such as Appareo Systems LLC and

Triton Systems-ND in accelerated, innovative product

development. Others, such as Pedigree Technologies, have

partnered on advanced electronics and software research

and development. NDSU research partnerships with

Caterpillar Inc. have assisted with laser-cladded coatings

for mining and energy applications, while other projects

have led to product technologies for SpaceAge Synthetics

and for Technology Applications Group, to name a few.

Economic development isn’t restricted to research.

There are other critical roles that we should serve.

Colleges, universities and technical schools prepare the

futureworkforce.By proactivelymeetingwith companies,

we are asking them what capabilities they need in future

employees. These discussions fuel potential partnerships,

help us better prepare current students for the job market

and meet ever-changing needs of those already in the

workforce, as businesses strive to compete globally. Land-

grant institutions such as NDSU understand the multi-

plicity of these roles.

Public and private partnerships are a powerful tool

to foster research and development, to access a trained

workforce, and to help current workers keep pace to be

better prepared for the future.We all may be in a position

similar to the one mentioned by hockey legend, Wayne

Gretzky, who said, “I skate to where the puck is going to

be, not where it has been.”Building and expanding public

and private partnerships already underway in North

Dakota and elsewhere will result in compelling benefits

for both business and education. Let’s work together to

make it happen. PB

Dr. J. Bruce RafertProvost, North Dakota State University701-231-7131, [email protected]

Gopaperless.

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|ECONOMIC DEVELOPMENT|

GOED renews focuson internationalmarketsBYPATCOSTELLO

Though the world purchases more than $1 bil-

lion in goods from 400-plus South Dakota

companies each year, we at the Governor’s

Office of Economic Development think there is still

room for growth. That is why the GOED has recently

renewed its focus on international trade.

Exporting is just one area where we see potential.

It offers both the state and the businesses operating

within our borders stability and additional markets —

both of which are crucial to growth.

Exports accounted for 9 percent of South

Dakota’s gross domestic product in 2009. When the

economy was down, having external markets helped

some companies bridge the gap when sales were

ebbing domestically.

The state of South Dakota would like to see that

number much larger than 9 percent. We believe it will

get there.

So, just who is buying SouthDakota products, and

how can the state export more?

This spring, a delegation of officials and busi-

ness leaders from South Dakota — including Gov.

Dennis Daugaard, myself and Secretary of

Agriculture Walt Bones — along with North Dakota

Lt. Gov. Drew Wrigley and other trade officials, com-

pleted a trade mission to China. China is one of South

Dakota’s primary focuses and one of the state’s top

five export partners.

China, which has 1.2 billion people with a grow-

ing middle class that is demanding higher-quality

protein, expressed an interest in South Dakota pork,

making it one of the areas South Dakota could

expand in. Additionally, South Dakota companies

that accompanied the delegation were able to further

their relationships, secure sales and gain contracts

while we were there.

It was extremely beneficial to have Gov. Daugaard

present. Having top leaders present plays a key role in

making these connections, and speaks volumes about

the state’s level of commitment. Trade missions have

been done in the past without gubernatorial presence,

but that presence makes for a more successful trip. The

North Dakota Trade Office has really set an example of

how a successful trade organization can make a differ-

ence by helping businesses reach new markets, and the

state of South Dakota really appreciates its support.

However, taking all of South Dakota’s business

leaders to China is neither practical nor feasible, so we

are taking on additional initiatives at home.

This spring, in conjunction with the Governor’s

Economic Development Conference, the GOED col-

laborated with the International Trade Center to host a

workshop titled “Exporting 101,” which was open to

South Dakota companies that wanted to learn about

opportunities in exporting.

The International Trade Center, which was estab-

lished in July 2011, is located in theU.S.Customs build-

ing in Sioux Falls.

The GOED has also designated one of its business

development representatives to focus on the state’s

international efforts and serve as a resource for compa-

nies looking to branch out.

Looking forward, we are striving to create addi-

tional partnerships and continue to offer more oppor-

tunities like events, workshops and trade missions.

These approaches exemplify the South Dakota spirit,

which I believe will ultimately contribute to our state’s

continued success. PB

Pat CostelloCommissioner

S.D. Governor’s Office of Economic Development605-773-3301, [email protected]

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Prairie News Industry News & Trends

N.D. hospitals receivegrants to improve health care

Garrison Memorial Hospital and Altru

Health System will receive more than $380,000 in

grants to expand health care services in rural com-

munities. The Distance Learning and

Telemedicine Program provided the funding.

Garrison Memorial Hospital in Garrison,

N.D., received $119,833 to deliver telepharmacy

services. Altru Health System, based in Grand

Forks, N.D., was awarded a $266,900 grant to

implement digital imaging into a telemedicine net-

work between their clinics in five rural communi-

ties: Cavalier and Drayton in North Dakota; and

Fertile, Red Lake Falls and Warroad in Minnesota.

BCBSND signs contractwith Altru, Sanford

Blue Cross Blue Shield of North Dakota has

signed Total Cost of Care contracts with Altru

Health System, Grand Forks, N.D., and Sanford

Health, Fargo, N.D., and Sioux Falls, S.D. These

contracts are part of an effort to reimburse med-

ical facilities with an emphasis on quality of care

rather than volume of services delivered, while

improving care coordination and holding down

member health care costs.

Pilot child carefacility project started

The North Dakota Board of University

and School Lands is allocating $500,000 for a

pilot program to help communities in the

state’s oil-producing counties establish more

child care facilities.

Political subdivisions in child care deficient

counties can apply for matching grants to estab-

lish a community-owned child care facility to be

publicly operated or leased to nonprofit or for-

profit operators. The funds can be used to pur-

chase a modular child care facility, to expand an

existing publicly owned child care facility or to

build a new publicly owned facility.

St. Alexius, LintonHospital reach agreement

St. Alexius Medical Center in Bismarck,

N.D., has entered into a management agreement

with Linton Hospital in Linton, N.D.

According to Spencer Larson, Linton

Hospital board chair, ownership will remain with

Linton Hospital. “We will continue to utilize our

board of directors combined with the added

resources and leadership of St. Alexius Medical

Center to provide high-quality patient care to the

people we serve.” St. Alexius will assist Linton

Hospital with the placement of a chief executive

officer and help with physician recruitment.

Onsharp expanding to TexasOnsharp, aweb strategy,design anddevelop-

ment company in Fargo,N.D., is opening an office

in Sugar Land, Texas, to provide services for a

growing number of online marketing and devel-

opment customers.

Houston’s pro-business culture and world

class workforce and educational institutions is

allowing Onsharp to become even stronger in

product and service offerings to current and

potential clients, according to Onsharp. The new

office will allow Onsharp to continue expanding

to provide customer experience for each client.

NISC named one ofbest places to work in IT

National Information Solutions

Cooperative, a provider of information technolo-

gy products and services to utilities and telecom-

munications organizations, has been listed by

IDG’s Computerworld magazine as one of the 100

best workplaces for IT professionals in the United

States for the 10th time. This year, NISC is ranked

54th overall. Computerworld has recognized NISC

as one of the best places to work in IT for 10 of the

past 11 years.

MnSCU receives$3 million NSF grant

The Minnesota State Colleges and

Universities Manufacturing and Applied

Engineering Center of Excellence have been

awarded a National Science Foundation grant for

nearly $3 million to educate and train manufac-

Sanford Health Moorhead, Minn., campus is being built to expand

medical services and provide the latest in health care design and technology.

The $13million projectwill include pediatrics,women’s services, behav-

ioral health, orthopedics, occupational medicine and outreach services for

specialty care, a retail pharmacy and gift shop. This expansion means major

growth for Sanford Moorhead; 16 physicians are expected to be added at the

clinic with several more offering outreach services, more than tripling the

current number.

Sanford Health Moorhead campus under construction Photo courtesy of Sanford Health


|PRAIRIE NEWS|

turing technicians.

The MnSCU Manufacturing and Applied

Engineering Advanced Technological Education

Regional Center of Excellence is a partnership of

10 institutions led by Bemidji State University.

Partner institutions includeCentral LakesCollege,

Lake Superior College, Minneapolis Community

and Technical College, Northland Community

and Technical College, Northwest Technical

College, Pine Technical College, Riverland

Community College, Saint Paul College, and St.

Cloud Technical and Community College.

Alerus launches mobile appAlerus Retirement Solutions, a division of

Alerus Financial N.A., introduced a mobile app,

available for both iPhone and Android devices.

With the Alerus Retirement Solutions mobile

application, retirement plan participants receive

fast and secure inquiry access to their account

information. The app allows Alerus Retirement

Solutions to build a closer relationship with the

participants on a day-to-day basis. Participants

can view account activity, current balance by

investment and source, rate of return and recent

contribution information.

N.D. tops EnterprisingStates rankings

The U.S. Chamber of Commerce’s 2012

Enterprising States report ranks North Dakota

as the nation’s top performing economy along

key growth measures for jobs, productivity

and income.

Enterprising States: Policies that Produce

assesses the economic performance of the 50

states and polices in five key areas — entrepre-

neurship and innovation, infrastructure, talent

pipeline, exports and international trade, and

taxes and regulation. North Dakota ranked No. 1

in long-termgrowth, short-term job growth, gross

state product growth, per capita income growth,

science, technology, engineering and mathematics

job growth and business closure rate.

Dickinson hotelsbeing planned

RoersDevelopment is planning to build four

hotels west of Dickinson, N.D., after approval

from the Dickinson Planning and Zoning

Commission. The hotels will have four stories and

will be constructed on 210 acres of land north of

Interstate 94.


|PRAIRIE NEWS|

Sanford receives $12 million grantThe Centers for Medicare/Medicaid (CMS) has awarded Sanford

Health a $12 million Health Care Innovation grant.

CMS grants are exclusively given to applicants whowill implement

the most compelling new ideas to deliver better health, improved care

and lower costs to people enrolled inMedicare,Medicaid andChildren’s

Health Insurance Program, particularly those with the highest health

care needs.

Sanford Health is receiving this award to transform health care

delivery through the full integration of primary and behavioral health

care in South Dakota, North Dakota and Minnesota.

Video Guidance, ConnectingPoint form strategic partnership

Bloomington,Minn.-basedVideo Guidance, a visual communica-

tions company, has formed a strategic partnership with Watertown,

S.D.-based Connecting Point Computer Center, which provides infor-

mation technology solutions to businesses, schools and government

agencies throughout North Dakota and South Dakota.

The partnership will help Video Guidance grow by increasing its

sales presence in its current markets and expanding its geographic reach

across North Dakota and South Dakota.

S.D. Arts Council awards grantsThe South Dakota Arts Council, an office of the South Dakota

Department of Tourism awarded nearly $1.2 million in fiscal year

2013 grants and special initiatives. The council provided funding for

more than 225 artists, arts organizations, schools and art projects

across the state.

Funds for Arts Council grants are provided by the National

Endowment for the Arts and the state of South Dakota.

Community Foundation ranks in top 100Sioux Falls Area Community Foundation has earned spots on two

of three prestigious community foundation top 100 lists.

For 2011, the community foundation earned recognition as one of

the most active community foundations in the nation in terms of grant

making and contributions received.

The lists were released by CF Insights, which compiles and distrib-

utes data and information on finances, operations and best practices for

community foundations nationwide. CF Insights was established by the

national Council on Foundations and FSG, a consulting firm that helps

foundations accelerate their social impact.

State Bank & Trust wins workplace awardsState Bank & Trust, headquartered in Fargo,N.D., has received two

awards from Minnesota business publications.

State Bank&Trustwas named the secondmost highly ranked large

company among the “100 Best Companies to Work For” by Minnesota

Business magazine, and was also recognized for the second straight year


|PRAIRIE NEWS|

by the Minneapolis StarTribune, and was named to the top 10 of the“Top

100 Workplaces in Minnesota.”

Land board commits $25 millionThe Board of University and School Lands has committed an addi-

tional $24.8 million in grant funding to help counties, cities, school dis-

tricts and other political subdivisions in the Oil Patch offset the impacts

of rapid development. The state appropriated $135 million in Energy

Impact funds for the 2011 to 2013 biennium and about $9.3 million

remains to be allocated.

The funding will be used to support improvements in emergency

services, to provide more housing for teachers, for upgrades to municipal

water and sewer systems, street improvements, school infrastructure

improvements and to address other impacts of rapid growth.

S.D. tax system ranks firstThe Small Business & Entrepreneurship Council ranked South

Dakota the best tax system in their“Business Tax Index 2012.”The report,

which analyzes the best tax systems in the nation for small businesses,

start-ups and entrepreneurs on an annual basis, states that taxes matter in

terms of a state’s competitiveness, economic growth and job creation.

SouthDakota rated“best”in last year’s analysis also.The index ranks

states on the costs of their tax systems based on 18 different tax measures.

Burlington, N.D., adding housingTwo developments are being planned on 700 acres of recently

annexed land in Burlington, N.D.

One housing subdivision — Point of View Third Subdivision — is

being created on 187 acres. The other — Highlands Ranch Subdivision

project — is being built on 535 acres. Both are in the early stages and

homes are slated to be completed in the spring of 2013. The two develop-

ments combined have the potential to more than quadruple the popula-

tion of Burlington by adding approximately 5,000 residents to the current

population of 1,100.

Minnesota exports have record first quarterMinnesota exports of agricultural,mining and manufactured prod-

ucts reached a first quarter record of $4.9 billion, up 2 percent from the

same period a year ago, according to figures released by the Minnesota

Department of Employment and Economic Development.

Manufacturing represented the largest share of state exports during

the quarter, ringing up $4.5 billion in sales, also up 2 percent from a year

ago.Asia was the state’s largest export region, accounting for 35 percent of

all sales, followed by North America (33 percent) and the European

Union (20 percent).

N.D. exports climb 35 percent in first quarterFor the first time North Dakota exports have exceeded $1 billion in

(continued on page 21)


|PRAIRIE PEOPLE|

Andreson joins AltruLaura Andreson has joined Altru Health

System’s obstetrics and gynecology department in

Grand Forks, N.D.

Andreson received a clinical laboratory sci-

ence degree at the University of North Dakota and

then earned her doctor of osteopathy degree from

Des Moines University Osteopathic Medical

Center in Des Moines, Iowa.

Wells Fargo hiresfiduciary advisory specialist

Wendy Devier has been named fiduciary

advisory specialist and assistant vice president for

Wells Fargo Private Bank in Fargo,N.D., Bismarck,

N.D., and western North Dakota.

The previous seven years she worked for

Bank of the West as a senior trust officer and assis-

tant vice president.

Doolittle namedassociate VP of research

James Doolittle, with 32 years of experience

in research, has been named associate vice presi-

dent for research at South Dakota State University

in Brookings.

Since 2004,Doolittle has served as director of

the North-Central Sun Grant Center, where he

annually managed a $57 million research portfolio

on bioenergy with more than 75 subcontracts.

Strinden joins NEW TECMatthew Strinden has been hired as executive

director of North Eastern Work and Technical

Education Center (NEW TEC) in Aberdeen, S.D.

Strinden was assistant state superintendent

with the N.D. Department of Public Instruction,

where he coordinated school health, child nutri-

tion and food distribution, management informa-

tion systems and teacher and school effectiveness.

Keeney new alumnidirector for U of Mary

Paul Keeney has been named director of

alumni at the University of Mary, America’s

Leadership University, in Bismarck, N.D.

Keeney was previously employed for five

years with the Hazelton-Moffit-Braddock Public

School in Hazelton, N.D., where he was a science

instructor, secondary principal, assistant football

coach (Linton-HMB), and HMB Public School

athletic director.

Sanford exec chosen fornational leadership award

H. Eugene Hoyme, chief academic officer for

Sanford Health and president of Sanford Research,

has received the 2012 Excellence Award from the

National Organization on Fetal Alcohol

Syndrome, joining the ranks of almost 40 past

recipients that include Sen. John McCain and the

late Sen. Ted Kennedy.

Laura Andreson

Wendy Devier

James Doolittle

Paul Keeney

H. Eugene Hoyme

Matthew Strinden

Taketo Baba Shoshone Richardson

Two join Altru’s physiciansemergency medicine department

Taketo Baba and Shoshone Richardson have joined Altru Health

System’s emergency medicine department in Grand Forks, N.D.

Baba earned his degree in medicine from Tohoku University

School of Medicine in Miyagi, Japan. He completed a transitional

internship at the U.S. Naval Hospital in Okinawa, Japan and completed

his residency in emergency medicine at Orlando Health in Orlando,

Fla. Richardson began her education at Arizona State University where

she received a nursing degree. She earned a degree in medicine from

The Ohio State University College of Medicine. Following that she

completed her residency in emergency medicine at The Ohio State

University Medical Center. Richardson is board certified in emergency

medicine.


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one quarter, according to the North Dakota

Trade Office.

In the first quarter of 2012, exports

increased 35 percent over the same January

through March period of 2011. Since 2000,

exports from North Dakota have increased

more than 400 percent, from approximately

$626 million in 2000 to more than $3.3 bil-

lion in 2011.

North Dakota exports grew in many

of the state’s top destinations. Exports

increased 56 percent to Canada, 120 per-

cent to Australia, 330 percent to Russia,

69 percent to Venezuela and 120 percent

to Kazakhstan.

Medcenter One,Sanford Health merge

Medcenter One and Sanford Health

are stronger together.On July 2 they official-

ly merged, and Sanford Health now features

more than 1,200 physicians and 25,000

employees in seven states.

Sanford Health will invest $200 mil-

lion over the next 10 years to enhance health

care services in Bismarck-Mandan and

throughout western North Dakota, includ-

ing a new super clinic in Dickinson, the

gateway to the region’s bustling oil fields.

The clinic will feature all the current servic-

es provided in Dickinson along with space

for additional physicians, awalk-in clinic, an

ambulatory surgery center and diagnostic

services.

Medcenter One will operate under the

Sanford Health name. Bismarck-Mandan

will become the epicenter of the new west-

ern region of Sanford Health, joining Sioux

Falls, S.D., and Fargo as a regional center for

the vast network of clinics and hospitals

covering approximately 200,000 square

miles in seven states a geography larger than

North and South Dakota combined.

|PRAIRIE NEWS|

(continued from page 19)


|BUSINESS DEVELOPMENT|

Thefirst phaseof amarketingplan isunder-

way to showcase what Grand Forks, N.D.,

has to offer for companies looking to do

business in thewest, but expand east.

Community leaders have been discussing

ways to increase Grand Forks’ exposure and, as

the community developed its marketing plan,

realized that one of the most exciting economic

areas was western North Dakota, says Steve

Burian, president of Advanced Engineering and

Environmental Services (AE2S). “It was an

opportunity to capture some of the economic

impact, realizing that there was an overload and

leaderswere embracing help fromNorthDakota

partners,” he says. “We wanted to be sensitive to

western North Dakota’s needs.”

Klaus Thiessen, Grand Forks Region

Economic Development Corp. president and

CEO, says it is imperative that it is understood

that the region is supporting western North

Dakota andhelping take the pressure off.“If they

are able to expand in western North Dakota that

is great; if they are looking for other locations,

we hope they will think Grand Forks,” he says.

While the first actual concerted marketing

strategy started in May at the Williston Basin

Petroleum Conference in Bismarck, N.D., the

Grand Forks community has been part of an

east meets west strategy for the past two years.

Twice, Grand Forks representatives have trav-

eled to western North Dakota and once west-

ern North Dakota leaders met in Grand Forks

to discuss opportunities to work together.

Grand Forks is along Highway 2, a major

access route to Williston, N.D. The community

is positioning itself to support expansions into

western North Dakota. A recently developed

125-acre business park with infrastructure pro-

vides immediate space for companies to build.

Marketing campaignThe petroleum conference launched the

campaign to raise Grand Forks’ profile. The

community — public and private entities —

raised $130,000 for the marketing campaign,

which is expected to run for at least two years.

This campaign includes placing ads in specific

oil industry trade publications, talking to direct

contacts made at the conference, a mix of pub-

lic relations, news coverage, radio and bill-

boards.

There are more than 70 Grand Forks

companies doing business out west.

AE2S has had an office in Williston since

MarketingplanshowcasingGrandForks125-acre business parkamong assets for westernN.D. expansion needsBY ALAN VAN ORMER

Photo courtesy of JLG Architects


|BUSINESS DEVELOPMENT|

1998 and has been able to develop a local pres-

ence. “Engineering services is unusual because it

takes long-standing relationships,”Burian says.“It

takes effort, work and nurturing to be successful.”

He adds that the need for goods and servic-

es in western North Dakota are so significant that

it can’t be met by that region alone.

JLG Architects has been doing business in

western North Dakota since 2002. In 2012,Minot,

N.D.-based Davison Larson Associates merged

with JLGbecause of the firm’s expertise inwestern

North Dakota.

Lonnie Laffen, who co-founded JLG, says

the campaign makes sense. “There just aren’t

enough people out there to get the job done,”he

says. “I like the idea of keeping as much in

North Dakota as we can. We can service the

west side as it grows. Our strategy is to grow

permanently into that area. The state needs the

help. The connection between east and west is

becoming very close.” PB

AlanVanOrmerEditor, Prairie Business



|HIGHER EDUCATION |

Meeting ofthe MindsResearch and developmentpartnerships between privatecompanies and universitiesbenefit bothBY ALAN VAN ORMER

When Triton Systems Inc. was looking to develop and commercialize its sur-

face treatment products, the company discovered that North Dakota State

University in Fargo had expertise in the surface engineering technology that

it was creating.

Triton, headquartered in Chelmsford, Mass., is a material-based product development

company that takes ideas from a laboratory and moves those ideas to the commercial world.

The company conducts a majority of its business with government entities. For example,

Triton is currently working with the military on a bed net to protect soldiers from insects

while in the field.

“With its extensive testing and characterization capability, NDSU has been a logical

partner for Triton aswe develop and evaluate various products.Additionally,NDSUhas pro-

vided networking opportunities in the Red RiverValley Research Corridor,” says David Zupi,

director of operations for Triton in theNDSUResearch andTechnology Park.“Workingwith

a university helps us get out of our comfort zone and hopefully get exposure and experience

by bringing in different skill sets and perspectives on the varied surface treatment that we are

working on.”

Kevin Cooper, business instructor at the University of Minnesota Crookston and direc-

tor of its Center for Rural Entrepreneurial Studies, says that companies increasingly look to

universities for research assistance. “Traditionally universities tended to be somewhat

removed from this type of engagementwith the private sector.Now there is amore proactive

orientation toward collaboration with research-based private firms,”he says.“For the univer-

sity it is a source of revenue at a time when federal research funding has reached a plateau,

providing new opportunities for research personnel and the possibility of jobs for college

graduates. For the business, it helps accelerate their research agenda by gaining access to uni-

versity experts in a particular field, often less expensively than if they did it on their own.”

South Dakota State University in Brookings has increasedits research capabilities in ag technology, ag biotechnol-ogy, renewable energy, pharmaceutical sciences andelectrical engineering. PHOTO: ALAN VAN ORMER


|HIGHER EDUCATION|

Philip Boudjouk, vice president for research, creative activities and

technology transfer at NDSU, says companies are cutting back on research

in the United States.“Companies often look for short-term results,”he says.

“Long-term initiatives are more difficult to invest in.”

Phyllis Johnson, vice president for research and economic develop-

ment at the University of North Dakota in Grand Forks, says companies

come to UND because of the university and the thought that they can hire

graduates who have the qualifications they are looking for. “We have coop-

erative relationships going on between companies and faculty that involve

students,” she says. “Then there are situations where we’re working with

other folks to further develop technology that was created at the university.

All those pieces are important and seem to be happening.”

Dwaine Chapel, executive director of the South Dakota State

University Innovation Campus in Brookings, agrees that more companies

interested in doing research and development are moving toward universi-

ties. He recently attended a national bioconference in Boston. During that

conference, Chapel learned that 39 percent of companies will be merging

and doing research together, while 41 percent were turning toward univer-

sity relationships and 20 percent were still doing their own research and

development.

Chapel says he is not sure what the percentage was five years ago, but

believes that companies moving toward working with higher education

institutions have increased. “The higher portion will continue to develop

university relationships because the higher portion, in my opinion, is going

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|HIGHER EDUCATION |

forward because of the university’s young talent and knowledge.”

Working relationshipsZupi of Triton is one of the first to say that being located next to a high-

er education facility is working. In August, the company will have been locat-

ed in the NDSU research park for a year. During that time frame, Triton has

added two NDSU graduates and is working with several products in a 4,000-

square-foot surface treatment facility.

“NDSU has very capable testing labs,” Zupi says. “We work with NDSU

scientists very closely because we want an objective look at our products.”

One of the main product lines Triton is focused on commercializing at

its Fargo facility is its Invexus line of surface treatment for textiles. Invexus

technology creates engineered functional surfaces without changing bulk

properties or general characteristic of substrates.

Avianax LLC, which is in the REAC 1 building on the UND campus, is

another company that has found being located near a university a blessing

when developing its products.Avianax is researching and developing antibod-

ies for treatment of viral and bacterial diseases and possibly cancer.

Avianax has been doing research since 2006 and currently has four

employees, along with the use of six other UND researchers.

“It has become a cooperative venture,” says Richard Glynn, chief operat-

ing officer of Avianax.“Avianax is trying to make this into commercial sales in

animal and human markets.”

Avianax is collaborating with the UND Medical School and receiving

advice and guidance on how to carry through with this project,Glynn says.“It

is becoming a trend to go to universities to develop these types of products

because of the facilities that are available,” he says. “The key components are

labs and people that understand the process. In addition, there are knowledge-

able research staff and access to a wealth of information and trained people.”

Glynn adds it is important to work with universities because biotech

companies are different than other types of companies and take specialized

knowledge and facilities to move forward; something that universities have

on campus.

Partnering is keyJohnson says a big reason why companies are looking at universities is

because they areplaceswhere companies can find a lot of smart people.“When

you partner with a university you find faculty members that have knowledge

or skills to help you solve a particular problem or move your business for-

ward,” she says. “Universities also have sophisticated equipment and people

that operate that equipment and interpret the results. Some companies could-

n’t buy that type of equipment because it wouldn’t be used enough.”

At NDSU, the campus has been seeing a high volume of companies

involvedwith research and technology for at least a decade. In the last six years,

NDSU has developed more than 330 research contracts with the private sec-

tor and more than 1,800 federal contracts. In addition, there are significant

numbers of students involved in some type of research with companies on

campus.

Boudjouk says that the major benefit for universities working with pri-

vate companies in research is that students have an opportunity to get a degree

anddiscipline plus experiencewith the commercial aspect of the business dur-

ing courses they are taking at the school.

“Twenty years ago the research portfolio was less than one-half of what

it is now,”Boudjouk says.“Companies are on a growth path in North Dakota

andNDSUcan contribute to that success.The state has become amore attrac-

tive place for companies. NDSU’s scientific capabilities, its technology, faculty

and students are key partners in that success.NDSU is among the top 108 uni-

versities in the country with very high research activity, as determined by the

Carnegie Commission on Higher Education.”

In Brookings, SDSU is seeing an increase in research also with a more

than 30 percent increase in research expenditures since 2005. In 2005,

SDSU had $17 million in expenditures in research. In 2011, that increased

to $70 million.

SDSU has increased its research capabilities in ag technology, ag

biotechnology, renewable energy, pharmaceutical sciences and electrical

engineering. SDSU currently works with 70 to 100 companies on various

researches.

“South Dakota has had the highest research rate increase in the country

for the last several years,” says Kevin Kephart, vice president for research at

SDSU. “A lot of it has to do with our willingness to work and connect with

these organizations.”

Kephart says organizations such as the South Dakota Wheat

Commission help to fund the university’s research efforts.

Future challengesFunding, facilities, competition and maintaining a skilled workforce are

perennial challenges for businesses. They are areas in which universities and

industry can partner for mutual benefit, Boudjouk says.

NDSU is adding 35,000 square feet of scientific labs to an existing

Research 1 building in 2013 to assist in bringing university research discover-

ies to the commercial sector.

The National Institute for Standards and Technology and a North

Dakota Centers of Excellence enhancement grant are funding the additional

labs. Research in the addition will augment activities in seven existing public

and private company buildings in the NDSU Research and Technology Park,

which opened in 2011. Park tenants directly and indirectly generate an esti-

mated $10.9 million per year for state and local governments.

SDSU is infrastructure restricted, but is working to increase that for

research capabilities. The campus is converting some of its labs for research

space, updated its agricultural halls, developed a new dairy plant for research,

and new chemistry and pharmaceutical labs and a new building and labs for

electrical engineering. In the past three to four years, SDSUhas spent nearly to

$100 million in investments for research.

Universities have also had to educate faculty in learning how to protect

intellectual property.“In the past people would have an idea or invention and

start working with a private company without any written agreement. This

opens you up to the possibility that the company would take the idea,make a

profit and the university wouldn’t get anything from it,” Johnson says. “Now

our faculty has a better idea of what they do in those situations—come to the

tech transfer office andmake sure there is an agreement between company and

university. This protects both the companies’ confidential info and any contri-

butions the university makes.” PB

AlanVanOrmer

Advertorial


|WORKFORCE DEVELOPMENT|

Tracking theJob MarketAg, energy, health care,social media marketing andwelding popular areas ofstudy at tech schoolsBY ALAN VAN ORMER

Lake Area Technical Institute in

Watertown, S.D., has seen

enrollment increase more than

50 percent during the past seven years

and more than 1,700 students are now

taking various two-year courses.

“People are finally figuring it out,”

says Debra Shephard, president of Lake

Area Technical Institute. “Everybody

had a friend or relative that left and

pursued a degree (at a college or univer-

sity) and didn’t finish that degree but

see people going to a technical school

and coming out after two years and get-

ting good jobs. People are starting to

understand that this is not a second-

rate choice.”

One of Lake Area Tech’s founda-

tion programs of study is agriculture. It

has become one of the largest in student

population. There are eight different

options and more than 200 students are

enrolled. In the fall of 2013, a $10 mil-

lion agriculture center will be complet-

ed to accommodate the growth and to

house three other programs.

“The ag industry is booming,”

Shephard says. “There are excellent jobs

and there is a demand for the workers.

Seven or eight years ago there weren’t as

many ag opportunities and students

were concerned about entering that

field. Now it is exciting to see students

able to sustain that industry.”

Lake Area Tech continues to diver-

sify its ag program. For example,

because of a demand for employees in

the agricultural commodities area, Lake

Lake Area Technical Institute in Watertown, S.D., addeda commodity merchandising degree in response to agrowing demand for people who can understand com-modity markets.


Area Tech responded by adding a commodi-

ty merchandising degree. “The ag industry

needs people that can understand the mar-

kets and can buy and sell,” says LuAnn Strait,

director of institutional relations.

Other growing programsAt Bismarck State College in Bismarck,

N.D., one of the fastest growing programs is

the school’s bachelor of applied science

(BAS) in energy management. The program

is geared toward students with an associate

degree in an energy technical field who want

to advance in their career to become a man-

ager or supervisor. BSC’s two-year associate

degree program allows graduates to work in

a power plant, refinery, ethanol plant or

other similar facilities.

“The BAS program was added in 2008

because of workforce needs in the energy

industry,” says Kari Knudson, vice president,

National EnergyCenter of Excellence at BSC.

In addition, BSC added a petroleum

production technology program in 2011 in

response to the growing needs of oil and gas

companies in western North Dakota and

began a petroleum engineering technology

program in January 2012.

“The new petroleum programs will

prepare students to work for an oil compa-

ny, service company or others associated

with oil and gas development,” Knudson

says. “We anticipate strong demand for our

energy programs. Many people are starting

to retire and as the economy strengthens and

the stock market does well, there will be a

growing need for entry-level and mid-level

positions in energy companies.”

Western Dakota Tech in Rapid City,

S.D., is starting a socialmediamarketing pro-

gram in the fall. It is expected that as many as

25 students will be in that first class.

“We’ve done research that shows

social media marketing is one of the fastest

growing career fields in the country,” says

Steve Buchholz, marketing director for

Western Dakota Tech. “As businesses start

to expand their marketing efforts, the web

is where it’s at. Businesses are seeking

trained experts to help them take advantage

of those marketing opportunities.”

Buchholz adds there is a need for well-

trained people for social media marketing.

“The new generation is growing up as digi-


|WORKFORCE DEVELOPMENT|

tal natives,” he says. “It’s exciting for stu-

dents to think about careers using YouTube

and Facebook.”

Western Dakota Tech offers 25 differ-

ent one- and two-year programs with

major emphasis on health care, transporta-

tion, energy, general education and tech-

nology. More than 1,000 students take

courses at the school.

Health care continues to grow in popu-

larity. The school offers 10 programs in

health care. The largest is practical nursing

where 54 students take courses that allow

them to assist registered nurses and physi-

cians in hospitals and clinics.

Welding is also popular. The number

of welding jobs correlates with work in the

coal fields of Wyoming, oil fields of North

Dakota and industry growth in western

South Dakota. There are 45 students in the

program this year.

“Students see that and are seeking

training so they are qualified for those jobs,”

Buchholz says.

Keeping up withdemand

Like most two-year schools, Lake

Area Tech is always scanning and

tracking business trends. They have

developed advisory councils for all

their programs to help keep up with

the trends. Businesses also will request

programs be developed to meet work-

force needs.

Two-year schools also have

learned to re-tool programs, as indus-

try and business evolve. At Lake Area

Tech, diesel technology has always been

one of the stronger programs size-wise.

This fall there will be 145 students

enrolled,overfilling their newdiesel lab,

which opened in January 2010. When

the ag center is completed, diesel will

gain additional lab space so the pro-

gram can continue to expand.

“That program is popular

because people see the opportunities in

that industry,” Shephard says. “It is

interesting how savvy students are

becoming. They are coming with a

plan,doing their homework and know-

ing what kind of job they want. They are

seeking out schools that are emphasizing the

hands-on skills.”

Technical schools are also focused on

training and are driven by the marketplace.

Partnerships are essential and two-way com-

munication is important. In addition, high

school counselors and parents are more

aware of the opportunities that two-year

schools can provide.

In South Dakota, technical schools

adhere to a policy of no unnecessary duplica-

tion of instructional programs. Programs

with a high need for graduates, such as diesel

technology, are offered at more than one of

the tech institutes. Other programs might be

unique to only one location.

Also, a majority of the students going

to a technical school are from the region

where the school is located and many

remain in the state after graduation. For

instance, Lake Area Technical Institute

draws 90 percent of its students from with-

in a 100-mile radius and 91 percent of its

graduates stay in South Dakota.

Government downsizing and decreased

budgets are a major concern for two-year

schools. Up-to-date equipment acquisitions

are the biggest challenge to staying current.

For example, at Lake Area Tech, 10 years ago

the automotive technology programwas able

to purchase a car for training purposes annu-

ally and the auto manufacturers frequently

donated vehicles for training purposes, but

that doesn’t happen anymore.

The current equipment budget for

2012 to 2013 at Lake Area Tech is $232,000.

“That doesn’t even touch it for what we

need,” Shephard says. “Some partners have

stepped up to help,which is invaluable to us,

and we need them to continue to step up if

we are going to create the workforce South

Dakota needs.” PB




|TECHNOLOGY|

Game-ChangingTechnologyHydraulic fracturing andhorizontal drilling drivingprofits in the Oil PatchBY ALAN VAN ORMER

The combination of hydraulic frac-

turing and horizontal drilling has

opened up the Bakken oil field in

westernNorthDakota inways that couldn’t

even be imagined a dozen years ago.

Lynn Helms, director of the North

Dakota Department of Mineral

Resources, says it all has to do with the

geology. “Rocks we are producing oil

from cannot produce at economic rates

without hydraulic fracturing,” he says.

Susie McMichael, spokesperson for

Halliburton, says hydraulic fracturing is a

game-changer in oil and natural gas pro-

duction. “It, along with horizontal

drilling, is driving the oil boom,” she says.

“Without the combined technologies,

companies would not be able to econom-

ically produce the oil and natural gas that

is providing millions of well-paying jobs,

billions in state and federal revenue and a

real path to a more affordable energy

future.”

Halliburton performed the first

experimental fracturing operation for

Stanolind in 1947, followed by the first

commercial fracturing operating in 1949,

McMichael says.

Today, Halliburton performs frac-

turing treatments in both the Bakken and

Three Forks formations throughout the

Williston Basin in northwest North

Dakota and northeast Montana.

Technology increasingproduction

Before 1990, when oil companies

drilled vertical wells and attempted

hydraulic fracturing, those initial wells

produced 35 barrels of oil per day and

one out of 10 were making money. In the

1990s, horizontal drilling became avail-

able and thewells drilled during that time

frame produced approximately 150 bar-

rels of oil a day and one out of four wells

were making money.

Then about a dozen years later, oil

companies found out how to marry

hydraulic fracturing and horizontal

drilling, Helms says. That increased the

volume to 1,000 barrels per day and

three out of four wells were economi-

cally viable.

“That means you can really drill aHalliburton performs a hydraulic fracturingoperation in the Bakken formation of North Dakota.PHOTO: COURTESY OF HALLIBURTON


|TECHNOLOGY|

lot of wells because three out of four are making

money,” he says. “That technology evolution

took us from 35 barrels of oil per day to 1,000

barrels of oil per day and less than one well out

of 10 making a profit to three out of four wells

making a profit.”

McMichael says the oil and gas industry has

long known that shale formations contain vast

amounts of oil and natural gas, but it was

extremely difficult and expensive to extract it

using traditional drilling and production meth-

ods, due to the low relative permeability of the

reservoir rock.

“When fracturing and horizontal drilling

technologies were first combined in the Barnett

shale in North Texas in the mid-1980s, it opened

up drilling and production in many unconven-

tional reservoirs, including the Bakken,” she says.

Nearly nine out of 10 onshore wells —

natural gas and oil — require fracture stimula-

tion to remain or become viable. Hydraulic

fracking uses water and sand and thousands of

pounds of pressure, along with additives to

create tiny fissures in the rock. The flow of

the water helps the sand hold the cracks

open and creates a passageway in which nat-

ural gas and oil can travel to the wellbore

where it is captured. It takes on average three

to 10 days.

UND providing expertiseNow that the technology is being used in

the Bakken, oil companies need experts in

handling the hydraulic fracturing and hori-

zontal drilling techniques. The University of

North Dakota in Grand Forks has started a

petroleum engineering department that

includes hydraulic fracturing and horizontal

drilling methods in the course work.

Steve Benson, chair of the petroleum

engineering department, says the need for

petroleum engineers is increasing due to an

expansion of the industry and retiring petro-

leum engineers.“The opportunities for petro-

leum engineers are expanding, their work

includes exploration, production, transporta-

tion and refining,” he says. “We haven’t spent

time marketing the program and the program

is growing.We are currently hiring faculty and

developing laboratories.”

In the hydraulic fracturing technology

program, students study the mechanical proper-

ties of rocks, learn the strength of rocks and how

the rocks behave under different forces that are

applied to them.The study also includes opening

up pores in the rocks to let the oil flow out.

In the petroleum engineering program,

students can receive a bachelor’s degree in petro-

leum engineering, amaster’s degree in geological

engineering and a doctoral degree in engineer-

ing with petroleum tracks.

The bachelor’s degree program started in

2010 and there were less than 10 people partici-

pating. The first graduates are expected in the

spring of 2013. Today, there are almost 100 stu-

dents taking courses in the program.

“After graduation they will have the skills

to work in jobs ranging from exploration to

refining,” Benson says. “They can work with

geologists to help oil companies understand the

rock formation and to optimize drilling tech-

nology, become part of a hydraulic fracturing

crew to understand and enhance the fracturing

of the formation, completions and the produc-

tion side and can also work to move products to

the market.”

Benson says the industry is supporting

UND. “They are giving us advice on what the

needs for students are and helping us with cur-

riculum development and funding for faculty

and equipment needs.”

Helms says the UND engineering pro-

gram is the future of Bakken production. “A 1

percent increase in recovery factor will yield 3

billion barrels of oil,”he says.“Our hope is that

the engineers at the petroleum engineering

program will find those techniques that give

those 1 percent increases.

“It is mind-boggling how valuable some-

thing like this is,” he adds. “We need a lot of tal-

ent, but a very few extremely talented people will

make a big difference.” PB


701- 371-9578, [email protected]


Red River Valley in the ‘cloud’Microsoft’s Fargo, N.D., campusanticipates growth over the next five yearsBY ALANVAN ORMER

With Microsoft focusing on cloud com-

puting, the Fargo,N.D., office anticipates

growth over the next five years to help

with this transformation in several areasof technolog-

ical expertise in the region.

Microsoft’s Fargo campus site leader Don

Morton says there will be new jobs created but at

this point the company is not sure exactly what

types of jobs. “We know there is going to be a

tremendous premium on customer service,” he

says. “We know there is going to be tremendous

premium on cloud engineering.”

Over the past several years, Microsoft has

gradually incorporated cloud computing into

its system. Many Microsoft products are avail-

able in the cloud today; with the option to also

use the products on-premise if customers prefer

this model.

“Wewill continue to see technology that inte-

grates better.Wewill continue to see new function-

ality and new features that allow you to do more,”

Morton says. “Deployment via the cloud makes it

so much easier.”

According to a new study by the analyst firm

IDC, spending on public and private information

technology (IT) cloud services will generate near-

ly 14 million jobs worldwide from 2011 to 2015.

The research, commissioned by Microsoft, also

found that IT innovation created by cloud com-

puting could produce $1.1 trillion a year in new

business revenues.

Locally, cloud computing is driving growth

and causing the Fargo office to begin to consider

various expansion options to accommodate the

projected employee growth. Currently, there are

1,700 employees and vendors in Fargo. When the

Microsoft campus is fully built-out it will have the

capacity for up to 2,700 people on its campus in

southwest Fargo along Interstate 29. Today, infra-

structure is in place for an additional two buildings

if needed.

James Gartin, president, Greater Fargo-

Moorhead Economic Development Corp., says he is

not concerned about workforce issues because

Microsofthas sucha strongability to attractworkers.

“This reinforces Microsoft’s commitment

to this market,”Gartin says. “They feel this facili-

ty offers some outstanding opportunities for

them. They have always told me that the biggest

positive is the workforce that they have here.

They can get a lot accomplished with the work-

force that they’re able to attract.”

Business in the cloudCloud computing is changing the way com-

panies do business. Microsoft’s business model

has changed along with this industry shift. In the

past customers only could purchase Microsoft

solutions for deployment on-premise. The soft-

ware was purchased and paid for upfront. Now,

Microsoft also offers hosted options, deploying

the software through the cloud and billing cus-

tomers for a monthly subscription. Customers

now have a choice of deployment options and can

pick the option that works best for their company.

Morton says under the on-premise scenario

companies would have the option to upgrade their

solutions every 18 months to two years. “When

large corporations go through major upgrades it is

a significant investment for the corporation,” he

says. “With the cloud there are continuous

upgrades that should be seamless to the customer.

The latest technology, latest features and latest func-

tionality are made available and easily deployed

through the cloud which will lead to productivity

gains. IT professionals can focus on strategic tech-

nology that adds value to their business.”

What it means to the employees on the

Microsoft campus in Fargo is an even greater focus

on customer service. “The Fargo campus has a

great reputation for delivering outstanding cus-

tomer service,” Morton says. “Locally we have

teams that touch every part of the cloud solution

life cycle.”

Microsoft’s Fargo campus is home to teams

developing thenext,cloud-enabledversionsof sever-

al of Microsoft’s enterprise resource planning (ERP)

products, and components of Microsoft Visual

Studio, and Microsoft Windows Phone. Sales teams

based in Fargo work with customers interested in

signing up for free trials of Microsoft’s cloud-based

solutionsandworkwith themduring thepurchasing

process. Operations teams in Fargo manage the

billing process once customers choose to purchase

any of the cloud services Microsoft offers and has

support teams in Fargo who work with customers

using cloud-based solutions in order to make sure

they have the best possible experience.

“We are re-engineering our existing products

to enable them to be deployed via the cloud,”

Morton says. “We are building new functionality

and features specifically designed for both on-

premise and cloud deployment and streamlining

our customer service processes to support the

cloud model.”

Morton adds that cloud computing is mak-

ing it easier for the businesses to deploy technolo-

gy solutions to increase business productivity and

to add features and functionality as it becomes

available instead of having to wait for the next

major upgrade.

“Anytime you can increase productivity, get

people to embrace new technology, new features

and new functionality, your people become much

more valuable employees,” Morton says. “Because

of the increased speed of diffusion of these tech-

nology innovations you are going to generatemore

revenue without having to add people.” PB



|RED RIVER VALLEY|

Don MortonCampus Site LeaderMicrosoft, Fargo N.D.


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|SOUTH DAKOTA|

Avera plans to expandCorporate complex to be developedon 82 acres in Sioux FallsBY ALANVAN ORMER

As the health care industry continues to grow, Avera Health

System is purchasing land in Sioux Falls, S.D., to develop a

corporate complex and other building needs specific to

keep pace with the ever-changing health care atmosphere.

An estimated 82 acres of land is being aquired in south Sioux

Falls adjacent to Avera Heart Hospital and Avera Behavioral Center.

Purchase of the land is expected to be completed in September.

Daryl Thuringer, vice president of marketing and public rela-

tions for Avera Health System, says having property adjacent to each

other provides a nice flow for patients and customers who come to

Avera for administration or medical care needs.

“It provides both patients and employees easy access to admin-

istration in the other facilities,” he says.

Dick Molseed, senior vice president for strategy and governance

at Avera Health, says there will be more pressure on health care in the

future and Avera needs to find areas that it can become more efficient

and productive.

E-services growingOne of those changes is occurring in e-services. Avera is active in

e-services. This includes e-emergency where at the push of a button in

hospitals across the regionphysicians andnurses immediately respond.

There is also e-pharmacy. Regulations state that when a physician

orders a drug for a hospital patient it has to be viewed by a pharmacist.

Many hospitals in the region do not have pharmacists and e-pharma-

cy allows immediate notification to a clinically trained pharmacist.

“Right now we are developing a central location for e-services,”

Molseed says. “Moving into the future, e-services could find a unique

home on our corporate campus.”

The land will allowAvera to add other buildings to the corporate

campus. “The Sioux Falls metro area and southeast South Dakota is a

strong growth area andhas been for years,”Molseed says.“Our campus

is just about full and this gives us an opportunity in the other part of

the city to expand our clinical services if we decide that is necessary.”

The Avera McKennan campus, at Cliff Avenue near downtown

Sioux Falls, housesmany of the health care networks programs,which

includes the main hospital and specialty clinics.

Molseed adds that the health care industry is continuing to grow

at a rapid pace and with Avera developing a futuristic plan, it needed

space to work.“This was one of the very last tracts of land that size,”he

says. “We think it is imperative to have because it allows us to respond

to changes in the future.”

Avera is just starting the process of looking at how to develop

the land once it is purchased. “Once we have the land we can start

asking questions on what we want to go into it,” Molseed says. “We

have to make sure we control the land and it is zoned the way we

need it to be.” PB




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|WESTERN NORTH DAKOTA|

Housing/businessproject planned inwestern N.D.$300 million complexwill be built in Watford CityBY ALANVAN ORMER

To keep up with housing demand in the Oil

Patch, Bakken Housing Partners is develop-

ing a project called Fox Hills Village in

Watford City, N.D. The $300 million project, which

will require more than 300 acres, will consist of 10

apartment complexes, townhomes, a shopping cen-

ter, full-service hotel and office buildings.

Construction of the first two apartment com-

plexes is expected to start in September. The project

will be built in eight phases over the next four years.

Mark Bragg, president of Bakken Housing

Partners in Watford City, says the speed of the proj-

ect depends on the demand. “There has been a lot of

interest, but we have been fairly low-key about it,” he

says. “When we start building there will be more

interest. People know about the project, but don’t

know our plans or our schedule.”

Gene Veeder, executive director for the

McKenzie County Job Development Authority, says

the community needs more housing for its residents.

“That is what is hindering retail growth, our com-

mercial growth and our workforce,” he says. “This is

a multi-project combination of everything we need

to expand. These types of projects can actually dou-

ble or triple the size of our community.”

Great locationBakken Housing Partners chose Watford City

because it is in the geographical center of the Bakken,

Bragg says. Watford City is at the crossroads of two

major arteries — Highway 85 that runs north and

south and Highway 23 that runs east and west. Fox

Hills Village will be located near the airport and

across from the city’s golf course.

“It makes it an easy commute in any direction

for long-term workers,” Bragg says. “Our whole

objective is to provide family housing.We’re satisfied

that the demands for long-term community family

housing are strong.”

Bragg adds that the demand is obvious. “So

many folks are living in temporary housing,” he

says. “The town was really welcoming about the

prospect of having long-term housing.”

The first phase of the project will consist of 10

apartment units. Each unit will have 47 two-bed-

room apartments. The mass grading and infrastruc-

ture, which have to be built first, will be started with-

in the next month.

Bragg says that once construction on the apart-

ments starts it will move quickly.

The second phase will be 250 townhomes.

Phase three is expected to be a shopping center that

will include a bowling alley, rifle, pistol and archery

shooting range, grocery store, clothing store, dry

cleaner, department store and restaurants.

Subsequent phases of the project are yet to be

determined but will include 1,200- to 2,500-square-

foot single-family homes with private garages, stor-

age and backyards. There will also be a build-to-suit

office building with 400- to 14,000-square-foot

options, conference area and technology center.

Bragg says the final phase will be a 200-suite hotel. PB




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North Dakota has an opportunity to help

lead the way in renewable fuels, however,

a lot still depends on whether Congress

can develop a long-term energy policy that includes

renewable fuels.

Phyllis Cuttino, director of the Clean Energy

Program for the Pew Environment Group, who

provided the keynote address at the 2012

Renewable Energy Action Summit in Bismarck,

N.D., says there are opportunities in renewable

energy for North Dakota and the country.

Cuttino says these opportunities include the

production of advanced biofuels and wind energy.

“This region of the country is good for wind,” she

said in an interview after her address. “All you need

is transmission. I’m seeing a lot of advances in effi-

ciencies across transmission lines.”

As the director of Pew’s Clean Energy

Program, Cuttino advocates for national policies

that promote the economic, environmental and

national security benefits of the clean energy

economy.

Cuttino told themore than 250 people present

at Bismarck State College that renewable fuels

investors are looking for a policy that is transparent,

has longevity and is consistent. “Crafting an energy

policy can be difficult because all states have differ-

ent interests,” she said. “North Dakota has multiple

resources here. Whatever kind of comprehensive

energy strategy (is developed) will be a mix incen-

tivizing different kinds of energy sources.”

Sens. John Hoeven, R-N.D., and Kent

Conrad, D-N.D., and North Dakota Gov. Jack

Dalrymple kicked off the sixth annual conference

that included renewable energy leaders from

around North Dakota and the country.

Renewable increaseThe North Dakota leaders said that in 2001

the state had less than one half a megawatt of

wind power generation. By the end of 2011, how-

ever, North Dakota had grown to more than

1,400 megawatts, and today ranks ninth among

states in wind-generated electricity. Further,

North Dakota now produces 12 percent of its

electricity from wind annually, ranking the state

second in the nation.

Similarly, a decade ago, the state produced

only about 30 million to 40 million gallons of

ethanol a year at two small facilities and produced

no biodiesel at all. Today, North Dakota has five

ethanol plants with a rated annual capacity of

more than 400 million gallons, and a large diesel

facility with a capacity of 85 million gallons a year.

That’s a 10-fold increase in biofuels production.

Mike Seminary of Kadrmas, Lee & Jackson,

says that renewable fuels have a long-term role in all

these energy options in our country.

“The choices the consumers have are still a

struggle,” he says. “At the end of the day consumers

measure the effectiveness of the program and how

much it costs them.”

He added that without the federal govern-

ment providing effective incentives, renewable fuels

will struggle. “We have a very significant long-term

role and very important role as we move forward,”

Wind,ethanolcapacityincreasingLong-term energypolicy should includerenewable fuelsBY ALAN VAN ORMER


Seminary said.

Kari Knudson, vice president of the

National Energy Center of Excellence at

Bismarck State College, says the renewable

energy action summit was a good opportunity

to showcase the renewable fuels industry.

“North Dakota is positioned to respond

to all types of energy,” she said.

During the keynote address, Cuttino

said that since 2004 there has been a 600 per-

cent increase in global clean energy invest-

ment including a record $263 billion invested

in 2011. Of that number, the United States

has invested $48 billion followed by China

and Germany.

Cuttino said there aremore opportunities

for the U.S. because rising energy development

presents export opportunities and 80 percent

of the future energy generation will come from

developing nations.

There were four breakout sessions that

discussed wind energy as a pathway to sustain-

ability, geothermal energy as an underground

technology for the future, ethanol as a fuel for

today and tomorrow and biomass as a renew-

able fuel that leaves no potential energy source

unturned.

During the discussion about wind energy,

three challenges were brought to the forefront.

They included the need for timely construction

of transmission lines, tight markets and the

need for those same markets to recognize the

environmental benefits of wind energy.

In the geothermal discussion it was

noted that there are 147 confirmed projects

in the United States; two in North Dakota.

There is potential for as much as 4,500

megawatts of geothermal energy mostly in

California and Nevada.

The major challenges for the ethanol

industry involve educating the public about the

benefits of ethanol, marketing access and how

to get the fuel to market. PB




|ENERGY|

Natural gas firm pumpingbillions into western N.D.Company building threeprocessing plants and two pipelinesBY ALAN VAN ORMER

ONEOK, a Tulsa, Okla.-based natural gas

gathering and processing company, will

invest up to $3.7 billion for natural gas,

natural gas liquids and crude oil infrastructure in

the Bakken Shale in western North Dakota in the

next three years.

“There has been tremendous drilling

activity by oil producers recently,” says Brad

Borror, supervisor for external communica-

tions for ONEOK. “Currently, there is not the

available infrastructure to capture all of the

natural gas and natural gas liquids.”

The company’s plans include the con-

struction of three natural gas processing plants,

a natural gas liquids (NGL) pipeline — the

BakkenNGLPipeline— fromSidney,Mont., to

northern Colorado and a 1,300-mile crude oil

pipeline — the Bakken Crude Express Pipeline

— from the Bakken toCushing,Okla.Each nat-

ural gas processing plant and related gathering

system is expected to employ approximately 100

workers.

“The Williston Basin is called a liquids-

rich shale play,” Borror says. “The driving activ-

ity is oil production.Natural gas and liquids are

associated with the oil production.”

ONEOK is the sole general partner and

owns 43.4 percent of ONEOK Partners LP, a

publicly traded limited partnership engaged in

natural gas gathering and processing, natural

gas pipelines and NGL.

According to a press release from North

Dakota Gov. Jack Dalrymple announcing the

start of ONEOK’s first natural gas plant,

between January and November of 2011,North

Dakota’s production of natural gas increased 53

percent, to a record 521 million cubic feet per

day. That’s enough natural gas to heat 1.3 mil-

lion homes. By the end of 2012, the state’s

capacity to process natural gas is expected to

reach 1.1 billion cubic feet per day.

Capture incentivesTo promote the processing of natural gas,

the state of North Dakota provides sales and

use-tax exemptions that may be applied toward

the purchase of building materials, production

equipment and other property used in the con-

struction or expansion of a natural gas process-

ing plant, the press release says. In addition,pur-

chases of machinery and equipment needed to

complete environmental upgrades may also

qualify for tax exemptions. The state, through

the Oil and Gas Research Council and in part-

nership with private industry, also has invested

more than $3 million, researching new tech-

nologies to expand the capture of natural gas.

Borror says that the estimates on Bakken-

related oil and natural gas change monthly. “If

there is natural gas needing to be captured, and

it makes sense business and economic-wise to

increase our infrastructure, we will evaluate

additional opportunities as they become avail-

able,” he says. “We believe there is currently a

sufficient supply of natural gas to fulfill our

current investments.”

The natural gas stream is separated from

the oil at the wellhead and, through its pipeline

gathering systems,ONEOK sends it to one of its

processing plants to process the natural gas and

send it out to the marketplace where it can be

used for home heating, business or commercial

use or electric generation.

The NGL needs further processing,

which is why a pipeline is being built to north-

ern Colorado that will connect with an exist-

ing pipeline and move the NGL to storage and

fractionation facilities in central Kansas. There


it will be converted into marketable products,

including propane and butane.

In addition, ONEOK is addressing the con-

cerns with natural gas flaring; a waste of a domes-

tic energy source that Borror says can be used

locally and affordably.

“We’re providing services that ultimately

capture that flaring,” he says.

ONEOK’s first plant — Garden Creek Gas

Plant — about 10 miles northeast of Watford

City, N.D., is operating and can process 100 mil-

lion cubic feet of natural gas per day. A second

100-million-cubic-feet plant — Stateline I — is

slated to be finished later in 2012. The third 100-

million-cubic-feet plant — Stateline II — will be

on line in the first half of 2013. Both will be in

Williams County near the Montana and North

Dakota border.

According to a recent press release from Sen.

John Hoeven,R-N.D.,with the new Garden Creek

plant,North Dakota now has 16 plants processing

Bakken Shale and Three Forks natural gas.

The natural gas liquids pipeline is under

construction and is expected to be completed in

early 2013. The crude oil pipeline is also slated to

be completed in 2015.

“Weather is always a challenge in the winter

time,”Borror says.“Our timelines for suitable con-

struction because of theweather have shrunk.The

weather provides its own challenges.”

Borror adds that the Bakken is a tremendous

oil field that has potential to tap natural gas.

“We’re in the natural gas business,”he says.“There

are huge quantities of natural gas and natural gas

liquids available in the Bakken. It makes sense for

us to build out these plants and infrastructure to

get the natural gas to the market.” PB



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Prairie Business magazine’s 40under 40 listing is slated to run inthe December 2012 issue. We areseeking nominations forcandidates from North Dakota,South Dakota and westernMinnesota for this year’s 40 under40. In order to be considered, can-didates must be 39 years old oryounger (and can’t turn 40 untilJanuary 2013 or later).

Do you know a young professionalwho deserves recognition?

Nominate Today!Nominate Today!The 40 under 40 issue ofPrairie Businessmagazine actively supports andcelebrates young professionals. The award honors individuals who strivetoward the highest levels of personal and professional accomplishments,who excel in their chosen field, devote time and energy to their communityin ameaningful way, and forge paths of leadership.

To nominate someone, please send your contact information along with your nominee’s age, name,title, company name and a short bio to editor Alan Van Ormer at [email protected].

Bank shares royaltieswith oil-impacted towns

A bank with mineral interests in western North Dakota

is returning some of its royalty income to communities that

are impacted by oil development.

AgriBank is the finance bank for Farm Credit Services.

The bank will make $500,000 available in grants for infra-

structure, housing, medical facilities, education and other

needs.

The mineral rights were acquired in the bank’s foreclo-

sure activities in the Depression era.

N.D. diesel refinery permit approvedThe Stark County Commission has approved a per-

mit for a proposed $325 million diesel refinery near

Dickinson, N.D.

The commission approved the request to rezone 274

acres of land between Dickinson and South Heart from agri-

cultural to industrial for the refinery’s construction.

A subsidiary of Bismarck, N.D.-based MDU Resources

Group Inc. is planning the refinery that could be completed

in 2014.

Officials have said that it would produce up to 10,000

barrels of diesel per day.

1 2


|BUSINESS TO BUSINESS|PRAIRIE BUSINESS

To Advertise:John Fetsch701.238.9574 • [email protected]

Brad Boyd1.800.641.0683 • [email protected]

Shelly Larson701.866.3628 • [email protected]

Member FDIC


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Ideas. Owned.™

prairie business august 2012

Documents

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states ample energy

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horizontaldrilling key