prairie business oct. 2012

www.prairiebizmag.com

October 2012

ALSOHelp WantedStrong local economiesdemand more quality workerspg. 32

Gathering GasNew opportunities in the Bakkenas natural gas production increasespg. 36

GettingBigger

Sanford Health continuesto expand throughout

the regionpg. 28

http://www.prairiebizmag.com

4 Prairie Business Magazine October 2012

|INSIDE|OCTOBER ISSUE 2012 VOL 13 ISSUE 10

FEATURES DEPARTMENTS6 Editor’s Note

BY KRIS BEVILL

Thanks to technology

8 Business AdviceBY MATTHEW D. MOHR

What about EBITDA?

10 FinanceBY RICK CLAYBURGH

Good credit skills putdreams within reach

12 Research & TechnologyBY DELORE ZIMMERMAN

Designing aSTEAM-powered economy

14 Economic DevelopmentBY ALAN ANDERSON

Empowering energy diversity

16 Prairie News

20 Prairie People

24 Business DevelopmentGoogle brings websitemastery to local level

42 Red River ValleyGroundbreaking marksnew beginning for tiny town

44 South DakotaJoining forces

46 Western North DakotaMandan-led consortium gets$9.7 million for business loans

48 Energy

54 Business to Business

Next MonthNovember's agribusiness and higher education issue will explore new energy-related courses and degrees at area colleges. The issue willalso include a profile of a Fargo, N.D., satellite imagery company focused on providing its services to farmers and insurance companies toimprove the efficiency of farming and assist in calculating crop losses.

On the CoverThe Sanford Aberdeen Medical Center isthe first project Sanford Health has builtfrom the ground up. The facility beganoffering services to patients in July.PHOTO: SANFORD HEALTH

28 HEALTH CAREThe Benefits of BiggerSanfordHealth executives discuss how thenation's largest rural health care providermanages quality care across a vast region

JOBSHelp WantedStates and businesses aggressivelyrecruit newworkers to the northern Plains

NATURAL GASPrepare to GatherIncreased natural gas production in theBakken opens up the opportunity for new ventures

32

36

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|EDITOR’S NOTE|

Thanks to technology

Forthoseofuswhocanrememberthedaysbeforesucheverydayconveniencesascellphonesorcom-

puters became engrained inour lives, it isworth it to take a stepback and think about howour jobs

would change without technology. For example, I’m writing this column onmy laptop computer

as I work remotely from themagazine’smain office, a featmade possible by a speedy Internet connection

and an equally speedy information technology (IT) support staff. I checked the latest headlines on my

phone earlier today and tweeted anupdate toourTwitter followers (@PrairieBiz for thoseof younot yet in

the loop),and I’ll be settingup interviewsvia email later today.For journalists, technology enables us to

do our jobs more efficiently and we in turn, are able to provide the world with news at a faster

rate than ever could have been imagined just a few decades ago.

But communicators are hardly the only ones affected by technology. For this issue, I spoke with

executives at Sanford Health, the largest rural health care system in the nation, to learn how the

organization is able to manage its vast network and still provide quality care. Not surprisingly, tech-

nology is a major factor in the organization’s operations. It has invested in developing an electronic

medical records system, which will allow providers at any of the organization’s locations to access a

patient’s chart, thus enabling more efficient, higher quality care, according to Sanford Health lead-

ers,who say the system is well worth themillions of dollars spent to develop it.Additionally, because

the geography of this region often means that small town doctors are serving a large number of

patients with varying afflictions, Sanford Health is utilizing technology to connect physicians in

remote locationswith specialists at larger facilities, allowing patients in smaller towns access to expert

input without necessarily having to travel long distances to visit the specialist in person.

For businesses and economic development agencies, the Internet has become a vital promo-

tional tool. In this issue,we highlight a group of economic development agencies in rural northeast

South Dakota that has embraced technology to spread the word of the area’s business-friendly

offerings through a dedicated website and social media marketing campaign. We also report on

Google’s efforts to increase the creation of websites by small businesses. This summer, the search

engine giant brought its Internet expertise to the area with a series of hands-on training seminars

designed to help small businesses create websites and utilize them to their best potential. While

most consumers turn to the Internet for information related to goods and services, a surprisingly

large number of small businesses still do not have websites. Google aims to help change that.

Of course, reliance upon technology in the workplace also creates a strong demand for IT pro-

fessionals. While IT is just one of many fields in need of qualified workers in our area, both states

project significant growth rates for IT positions over the next several years.

KRIS [email protected]

mailto:[email protected]

7www.prairiebizmag.com

An SBA AwardWinning Publication

MIKEJACOBS, PublisherRONAJOHNSON, Executive EditorKRISBEVILL, EditorTINAFETSCH, Production ManagerBETHBOHLMAN, Circulation ManagerJOEGREENWOOD, Multi-Media ConsultantKRISWOLFF, Layout Design, Ad Design

Sales Director:JOHNFETSCH701.212.1026 [email protected]

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

SHELLYLARSON - eastern ND/western MN701.866.3628 [email protected]

Editor:KRIS BEVILL701.306.8561 [email protected]

Editorial Advisors:Dwaine Chapel, Executive Director, SouthDakota State University Innovation Campus;Bruce Gjovig, Director, Center for Innovation;Lisa Gulland-Nelson, CommunicationsCoordinator, Greater Fargo Moorhead EDC;Tonya Joe (T.J.) Hansen, Assistant Professor ofEconomics, Minnesota State UniversityMoorhead; Dusty Johnson, Chief of Staff forSouth Dakota Gov. Dennis Daugaard’s office;Brekka Kramer, General Manager of Odney;Matthew Mohr, President/CEO, Dacotah PaperCompany;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 inPrairieBusinessaretheir 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|

What about EBITDA?BYMATTHEWD.MOHR

In financial articles, especially those concerning merg-

ers and acquisitions, the acronym EBITDA often is

used. EBITDA stands for “earnings before interest,

taxes, depreciation, and amortization.” Many acquisitions

are often based on this measure because, in practice, it will

approximate the annual cash flow of a stable enterprise.

Before our current financial crisis, when borrowing was

easily available, EBITDA was used to support a request for

a business loan. Unfortunately, if capital improvements

were needed or if costs changed or saleswere not stable, too

much debt was often incurred, especially when “leverag-

ing” a business during an acquisition.

Looking back, it is easy to see that EBITDA was over-

used for business acquisitions and loan support. It seems

foolish today that our financial community thought loans

were safe if a business produced no profits but was theoret-

ically able to support a loan because of depreciation and

the loss of a tax liability. But even though EBITDA may

have once been over-used, it is still a prominent bench-

mark during financial negotiations.

As an entrepreneur seeking financial gain, the objec-

tive is to show growing profits and cash flow, not to carry a

business to “break-even.” Fluctuations in sales, profits and

cash flow occurwith all economic enterprises, and it is very

hard to predict what will occur economically day to day

and over time. EBITDAwill go up and down. Minimizing

debt can help stabilize cash flow over time, especially if the

debt has variable interest rates or is used for operating pur-

poses. Only through positive cash flow over time can debt

be repaid, and investors rewarded with dividends.

EBITDA is a good benchmark and provides useful

information, but understanding true cash flow will lead to

much better decisions, especially in regards to debt and

long-term financial rewards. PBMatthewD.Mohr

CEO, Dacotah Paper [email protected]

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|FINANCE|

Good credit skills putdreamswithin reachBYRICKCLAYBURGH

Ask the average teen what they know about

“credit” and the response is usually something

about credit cards.Yet there’s so muchmore to

credit than simply cards. Young adults need to under-

stand how budgeting plays a role in managing credit

wisely, that reading and understanding their credit

report canmean the difference between landing a job or

holding them back before their career begins, and why

identity protection is everyone’s responsibility.

Today’s young adults are not prepared for finan-

cial responsibilities. Some 48 percent of teens are not

sure how tomanage a credit card and 46 percent don’t

know how to create a budget, according to Junior

Achievement and Capital One. In addition, Charles

Schwab’s 2011 Teens and Money Survey showed only

31 percent of teens know what a credit score is. With

these staggering figures, it is not surprising to learn

that only 13 states require students to take a personal

finance course as a high school graduation require-

ment. Teens are not getting as much of their money

management information in school as they used to.

According to Junior Achievement, in 2011, 58 percent

of teens reported learning how to manage money in

school or from teachers. In 2012, that number

dropped drastically to 24 percent.

To combat this problem, bankers across the

country have taken a proactive approach by partici-

pating for the past 10 years in a program sponsored

by the American Bankers Association called “Get

Smart about Credit Day.” This is a national campaign

of volunteer bankers who help young people develop

responsible credit habits. This year, Get Smart about

Credit Day will be celebrated on Oct. 18, giving

bankers an opportunity to get out of the bank and

into a classroom. Throughout the month of October,

bankers will raise awareness about the importance of

financial education and position themselves as trust-

ed partners in helping young people thrive.

Last year more than 3,300 bankers reached over

122,000 students with Get Smart about Credit les-

sons. Bankers are passing the message along that, no

matter your age or financial stance, it’s never too early

to get smart about credit. Learning the basic funda-

mentals of credit provides students and adults with a

foundation that will prove invaluable throughout

their lives.

There is another statewide organization, the

North Dakota Jump$tart Coalition, whose members

and partners strongly believe that having good finan-

cial skills is vital for a successful and prosperous life.

Established in 2006, North Dakota Jump$tart is

a nonprofit organization that actively works to

improve the financial literacy of the state’s citizens.

Coalition members educate the public through

speaking engagements and workshops, provide finan-

cial literacy resources and training materials, and col-

laborate with public and private organizations and

lawmakers on projects throughout the state. The

coalition can provide tools and connections for assis-

tance in personal or business money management as

well as classroom education. Anyone can join the

organization. For more information, visit

www.ndjumpstart.org. PB

Rick ClayburghPresident and CEO,

North Dakota Bankers [email protected]

http://www.ndjumpstart.org



|RESEARCH & TECHNOLOGY|

Designing aSTEAM-powered economyBYDELOREZIMMERMAN

Apple’s ascendancy to the pinnacle of the busi-

ness world comes as no big surprise to me. I’ve

been using Apple products since the 1980s,

starting with the ill-fated LISA computer at work and

myMcIntosh 512k, now tucked away in the basement at

home. Today I have bonded with my iPad and eagerly

await the next must-have from Apple — the iPhone 5.

The reasons for Apple’s staying power and success

in the techno-communications-entertainment world

are complex. Apple survived several mammoth fail-

ures, including the Next computer and the Newton

PDA. Under the leadership of former CEO Steve Jobs,

Apple institutionalized a culture and practices that fos-

ter relentless innovation.

Beyond the user-friendly gadgets, the technologi-

cal breakthroughs and the potent business model,

Apple’s key to success — the magic if you will — is its

genius for design. Apple’s logo is recognized every-

where on the planet, but what Apple’s customers most

fervently look forward to is the cavalcade of thrilling

innovations in “minimalist design plus unusual style.”

Technology and art go hand-in-hand. Apple has

proven that elegant design results in highly marketable

products, which in turn has meant higher profit mar-

gins and a company that is a global force for change.

There’s considerable discussion here in the region

and across North Dakota about taking our economy to

the next level. An important part of that discussion is

about intensifying efforts to prepare people for careers

in science, technology, engineering and math (STEM).

Since the competitiveness of every economy — from

the local to the national level— will rely on developing

or attracting a STEM-prepared workforce, this issue

must be a centerpiece of our strategies and invest-

ments. Fortunately our region has been at the forefront

of STEM initiatives, including the nationally recog-

nized Great Plains STEM Education Center at North

Dakota’s Valley City State University.

But as the success of Apple demonstrates, a flair

for and competency in the design arts can mean the

difference between a functional technology product

and one that generates excitement among a devoted

customer base spanning decades and continents. A

STEAM-powered economy, one that integrates the arts

with STEM, can generate high-impact benefits. Studies

show that training in the arts and music boosts atten-

tion, cognition and working memory; it leads to tangi-

ble improvements in math and reading fluency.

Participation in the arts can improve teamwork.

We are fortunate in this region to have many

vibrant arts programs at a time when other parts of the

country are forced to put theirs on the chopping block

because of fiscal constraints. A recent story on Scientific

American’s website characterizes such cuts as “educat-

ing young Americans out of creativity,” and being

short-sighted for any growth-oriented economy.

Continuing to make the arts a priority in our

schools and communities and becoming more inten-

tional about integrating the creative and design arts

into our products and services will yield meaningful

advances in innovation and competitiveness. By

enhancing these two essential pillars of a robust econ-

omy and society we will be able to go full STEAM

ahead into the 21st century. PB

Delore Zimmerman

President, Praxis Strategy Group

Executive Director, Red River Valley Research Corridor

[email protected]



|ECONOMIC DEVELOPMENT|

Empowering energy diversityBYALANANDERSON

Partnerships between traditional energy indus-

tries and the emerging renewable industries are

a central component of North Dakota’s

approach to energy development. This strategy recog-

nizes that in order tomeet our state and country’s ener-

gy needs, all players in the energy industry need to be

engaged in the process together.

Prior to the establishment of Empower North

Dakota, a comprehensive energy policy strategy, each

energy sector would show up at the Capitol with their

legislative agenda every other January and, often times,

conflict would occur, resulting in less than perfect legis-

lation for everyone.With EmPower, these groups are at

the same table on a regular basis, learning and ques-

tioning each other on best practices and how to work

together to deliver better results for North Dakota.

Because of this approach, energy projects resulting in

significant investments in all sectors of the energy

industry are underway across the state. Following are a

few examples:

• North Dakota is the second largest oil-produc-ing state in the nation with production of 660,000 bar-

rels per day as of June 2012.

• The state supports 4,000 megawatts of ligniteand other coal generation at seven locations providing

low cost, reliable electric power to 2 million customers

in North Dakota, South Dakota, Minnesota, Montana

and Iowa. North Dakota is one of the country’s top 10

coal producing states,mining approximately 30million

tons every year since 1988, which results in an annual

economic impact of $3.5 billion and 17,000 direct and

indirect jobs.

•NorthDakota leads the nation in the productionof nine different agricultural commodities, including

two commodities used for liquid fuels.

• From 2007 to 2010, North Dakota increased its

energy production by 65 percent and is well on its way

to doubling statewide production by 2025.

• North Dakota continues to develop a thrivingethanol industry, which contributes more than $300

million annually to the economy and supports more

than 10,000 direct and indirect jobs.

• By the end of 2012, natural gas processing inNorth Dakota will have increased 383 percent over six

years. With the addition of a facility coming on-line

later this year, there will be 17 plants processing Bakken

natural gas.The state, through theOil andGasResearch

Council and its private partners,has investedmore than

$2 million in new technologies to capture and use nat-

ural gas at well sites.

• In 2012, North Dakota ranked tenth in thenation in installed wind energy capacity. The North

Dakota Public Service Commission has permitted over

2,900 megawatts of wind generation.

• The state’s only oil refinery has expanded by 20percent or 10,000 barrels per day. In addition, three new

refineries were announced and are at various stages of

planning, permitting and construction.

North Dakota is proactive and aggressive in

addressing energy development and serves as a model

for America in fostering innovative, long-term energy

development to meet our nation’s growing energy

demand and need for energy security in an environ-

mentally responsible manner. PB

AlanAnderson

Commissioner, North Dakota Department of Commerce

[email protected]



Prairie News Industry News & Trends

Cirrus signs strategicaircraft supply deal

Cirrus Aircraft has agreed to become a key

strategic supplier partner for Southern

California-based sport plane manufacturer

ICON Aircraft. As part of the agreement, Cirrus

will produce composite airframe components for

ICON’s A5 amphibious light sport aircraft exclu-

sively at the Cirrus factory in Grand Forks, N.D.

Productionwill begin at the end of 2012.The first

production aircraft is scheduled to be completed

next summer.

Dale Klapmeier, CEO of Cirrus Aircraft, says

his company believes light sport aircraft and sport

pilots are “critically important” to the growth of

aviation. “Cirrus and ICON share the common

vision that exciting, innovative and safe new air-

craft are a key to unlocking the enormous poten-

tial within our industry,” he said in a statement.

NDSU alumnusprovides $1 million gift

North Dakota State University alumnus

Harry McGovern has given $1 million to the uni-

versity’s development foundation to support the

NDSU Alumni Center, which will bear his name

in honor of the donation.

McGovern earned a bachelor’s degree in civil

engineering from NDSU in 1966 and is now the

co-owner of MCM Construction Inc., a major

bridge and highway contractor with offices in

Sacramento and Los Angeles, Calif. The company

has constructedmore than 1,500 bridges through-

out California and consistently ranks within the

top 200heavy engineering contractors inAmerica.

TheNDSUAlumniCenter is a 30,520 square

foot facility that houses Alumni Association

offices, a banquet facility and other various con-

ference rooms and offices. It was officially dedicat-

ed on Oct. 8, 1999.

Minnesota facility gets grantfor home med study

The Minnesota Department of Human

Services has awarded PioneerCare of Fergus Falls

a $116,000 grant to assemble a community collab-

orative and study electronically monitored med-

ication management. The grant will allow 100

participants in west-central Minnesota to trial the

MedSmart Home Medication Management sys-

tem for three months. The system can be loaded

with medications and programmed for up to six

doses per day and can transmit dispensing histo-

ry through a phone line. It was designed as a

strategy to help elderly people stay in their

homes rather than move to nursing homes,

according to PioneerCare.

$1 million grant to aid NDrural health care efforts

The Health Resources and Services

Administration has awarded $1 million to the

Department of Family and CommunityMedicine

at the University of North Dakota School of

Medicine and Health Services to fund curriculum

development, learning enhancement and faculty

development to train physician’s assistants who

provide care for rural communities. The goal of

the grant is to help faculty develop curriculum

that will enrich and expand the knowledge and

skills of graduates to deliver high-quality primary

care in rural and underserved areas of the state.

Nearly 95 percent of North Dakota counties

have been deemed as either health professional

shortage areas or medically underserved areas,

SanfordHealth has provided a $20mil-

lion donation to the University of South

Dakota to assist in building a 6,000-seat bas-

ketball and volleyball area that will serve as

the cornerstone of a $70 million project.

When complete, the complex will include

track and field and soccer facilities, and foot-

ball and basketball practice facilities. The

project cost also includes planned renova-

tions to the DakotaDome. As of early

August, the university had received commit-

ments totaling $9 million for the project in

addition to Sanford’s donation. A portion of

Sanford’s $20million gift will be used to sup-

port scholarships, faculty and the university’s

health services program.

Sanford Health will also serve as the

exclusive sports medicine provider for the

university’s athletics programs for the next

15 years. It has been the university’s sports

medicine provider since 2005.

Sanford Health gives $20 million to University of South Dakota

PHOTO: UNIVERSITY OF SOUTH DAKOTA


|PRAIRIE NEWS|indicating that patients must travel signifi-

cant distances to receive health care services.

SD tourism departmentselects marketing firms

Sioux Falls, S.D.-based Lawrence &

Schiller and Kansas City-based MMGY

Global have been selected to serve as themar-

keting firms for the South Dakota

Department of Tourism. Lawrence &

Schiller’s three-year contract, up to $5 mil-

lion, includes development of the depart-

ment’s overall creative strategy, production of

traditional media and traditional media

planning and placement. MMGY Global’s

three-year contract, up to $2.5 million,

includes digital marketing strategy and place-

ment, market research and communications

strategy. Each contract includes the option of

two, one-year renewals.

Minot, ND, cliniccompletes expansion

St. Alexius Medical Clinic in Minot,

N.D., has completed an expansion and reno-

vation project, increasing itsmedical space by

50 percent. The clinic now houses 21 patient

rooms and has increased its services to

include technology to test for osteoporosis

and ultrasound capabilities. The clinic has

also hired two additional providers, bringing

the total number of providers to seven.

Eide Bailly addscost segregation practice

Certified public accounting and business

advisory firm Eide Bailly LLP has acquired

Minneapolis-based Cost SegAssociates LLC, a

cost segregation practice. Rod Axtell, certified

public accountant and managing partner of

Cost Seg Associates, has joined Eide Bailly as a

partner.OtherCost SegAssociates staff joining

the firm include Robert Lehmann, business

development senior manager; and Kris

Peacock, Travis Mlodzik and Joe Sawatske,

construction engineers.

Eide Bailly has previously provided cost

segregation services to its clients, but the

addition of Cost Seg Associates will provide a

higher level of services to clients by bringing

those services in-house, according to Ron

Hecht, head of Eide Bailly’s national tax

office. A cost segregation study can improve

a client’s cash flow and minimize their taxes

through proper tax planning, he says.

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|PRAIRIE NEWS|

Unit train crude terminalopens in Trenton, ND

Savage, a Utah-based supply chain solutions company, has com-

pleted work on a crude petroleum terminal near Trenton, N.D., that

will connect directly to Burlington Northern Santa Fe Railway Co.’s

main line track. The terminal has been transloading crude from truck

to rail on a manifest basis since December 2011, according to Savage.

The fully complete terminal is now capable of loading unit trains and

will operate 24 hours per day. A double-loop track at the terminal can

hold two 118-car unit trains. The terminal also provides inbound gath-

ering access through truck receiving stations, pipeline connections and

crude oil tankage.

The terminal has been designed and constructed with future

expansion plans in mind. Savage says the terminal will grow to accom-

modate continued Williston Basin expansions and the increasing need

for receiving and handling.

Altru pledges $10 million to UNDAltru Health Systems will provide $10 million to the University of

NorthDakota over 30 years to support a newUNDathletics complex on

the university campus and replace the football turf at the Alerus Center

in Grand Forks, N.D. According to UND, $9 million of the gift will be

dedicated to the new sports complex, which will include a practice and

training facility for football, track and field and soccer teams, a student-

athlete academic center and sportsmedicine space for all UNDAthletics

teams. The facility will also serve as a host site for youth athletics camps

and college and youth track and field meets.

Altru has served as UND’s sportsmedicine provider formore than

20 years.The indoor sports complexwill include space for academic and

clinical studies on human performance and conditioning, which UND

President Robert Kelley says will enhance both the university’s and

Altru’s roles in sports medicine.

SD to fund air base water treatment plantSouth Dakota’s Board of Water and Natural Resources has

approved a $16million low-interest loan to the South Dakota Ellsworth

Development Authority to construct a regional wastewater treatment

system.The systemwillmeet the needs of both EllsworthAir Force Base,

located about 10miles northeast of Rapid City, and the nearby commu-

nity of Box Elder, according to state officials.

Existing separate wastewater treatment facilities at the air base and

Box Elder are in need of upgrades to comply with surface-water dis-

charge standards. The decision was made to construct a regional facility

after a feasibility study concluded that about $8 million in cost savings

could be had by building one regional water treatment compared to

constructing and operating two separate systems.

The state loan will cover the total estimated cost of the treatment

facility. Financing is being provided by the state’s clean water revolving

fund,which provides loans for wastewater, stormwater, and non-point-

source pollution abatement projects.

TheAudubonNationalWildlife Refuge has received a 2012 Federal Energy

andWaterManagement award from the U.S.Department of Energy in recogni-

tion of the building’s outstanding performance in energy efficiency and use of

renewable energy.

Completed in 2010, the $6.1million visitor center and office building uses

40 percent less energy than buildings of similar size and use. It features a 37-ton

hybrid ground-source heat pump system that includes passive solar elements.

Hot water is provided by the systemwith an electric back-up.Mechanical venti-

lation is treated separately by an energy recovery unit that contributes to the

energy savings.

Widseth Smith Nolting, a multi-disciplined firm with offices in Grand

Forks, N.D., and Alexandria, Baxter, Bemidji, Crookston, East Grand Forks, Red

Wing and Rochester, Minn., led the design team as the architect for the project

and provided various engineering and land surveying services. Fargo-based

MartinMechanical Design Inc. designed the heating and cooling systems.

The buildingwas certified LEED(r) Gold in 2011.Deb Parrott, an architect

withWidseth Smith Nolting managed the LEED administration process.

The Audubon National Wildlife Refuge is located near Coleharbor, N.D.,

approximately halfway between Bismarck and Minot along U.S. Highway 83 in

the Prairie Pothole region of North Dakota.

Audubon National WildlifeRefuge receives energy award

PHOTO: WIDSETH SMITH NOLTING


|PRAIRIE NEWS|

Air medical equipmentmanufacturer recognizedfor job growth

Fargo, N.D.-based Spectrum

Aeromed, a designer and manufacturer of

custom air medical and air ambulance

equipment for fixed and rotor wing air-

craft, has been named to the Inc. 5000

Fastest Growing Companies list for the

second consecutive year. In 2011, the com-

pany was recognized for having achieved a

nearly 800 percent growth rate in three

years. Company President and CEO Dean

Atchison said in a statement that recogni-

tion on the list proves customers in the

fixed wing and rotorcraft markets

throughout the world continue to demand

SpectrumAeromed products.

The Inc. 500/5000 list ranks privately

held, U.S.-based companies that have a

revenue of more than $2 million in 2011

by overall revenue growth over a three-

year period.



|PRAIRIE PEOPLE|

Avera exec earns fellow statusRochelle Reider, vice president of patient

services at Avera Queen of Peace Hospital in

Mitchell, S.D., recently became a fellow of the

American College of Healthcare Executives, a

national professional society for healthcare leaders.

Reid fulfilled multiple requirements to obtain fel-

low status, including passing a comprehensive

examination, meeting academic and experiential

criteria, earning continuing education credits and

demonstrating professional and community

involvement. As a fellow of the society, she will

undergo recertification every three years and has

committed to ongoing professional development.

Chamber names BruceFurness 2012 legacy leader

Former Fargo mayor Bruce Furness is the

recipient of the Fargo Moorhead West Fargo

Chamber’s 2012 Legacy Leader award. The award

recognizes and emphasizes the important role

and contributions of long-time local leaders in

shaping and serving the chamber, the community

and the region.

Furness served as the mayor of Fargo from

1994 to 2006 and is the city’s fourth longest-serv-

ingmayor.During his time asmayor, Fargo under-

took the redevelopment of its downtown and

endured the Red River flood of 1997.

Houston Engineeringadds employees

Houston Engineering, an engineering, con-

sulting and environmental consulting firm based

in Fargo,N.D., has added two new employees to its

Fargo office.

Sean O’Brien has joined the company as a

geographic information system (GIS) technician.

O’Brien worked previously as a GIS intern in the

planning and economic development department

for St. Paul,Minn.He earned a bachelor’s degree in

geography and a master’s degree in GIS from the

University of Minnesota–Twin Cities.

Joe Talago has joined the firm as a designer.

Talago is a certified professional engineer in North

Dakota, Wyoming and Indiana. He previously

worked for the North Dakota Department of

Transporation, Yellowstone National Park and the

Indiana Department of Transportation.

Rochelle Reider

Bruce Furness

Mike Schumacher

David LandeckerGary McDaniel Aaron Skattum

Eileen Hess

Ulteig welcomes 4 new hiresEngineering, surveying and consulting firm

Ulteig recently added four new employees at two

of its eight offices.

David Landecker has been hired to serve as

market leader in land services in the Fargo office.

He is a licensed professional land surveyor in

North Dakota and Minnesota and previously

owned his own business.

GaryMcDaniel is a survey technician in land

services in the Bismarck, N.D., office. McDaniel

worked previously for the North Dakota

Department of Transportation after spending sev-

eral years as a high school science teacher.

Aaron Skattum accepted the position of

land surveyor at the Fargo office. He is a licensed

professional land surveyor in the Dakotas and

worked previously for Kadrmas, Lee & Jackson.

Eileen Hess has taken on the role of market

development manager — power industry in the

Fargo office.Hess has more than 20 years of pro-

fessional technical sales experience in industrial,

commercial, utility and construction industries.

Bismarck Cancer Centerappoints board of trusteesmember

Mike Schumacher recently joinedMedcenter

One in Bismarck, N.D., as the chief financial offi-

cer and has been appointed as the newest member

to the Bismarck Cancer Center board of trustees.

He replaces Paul Morth, who retired from his

position as the vice president of finance at

Medcenter One in July after 29 years of service.

Schumacher previously worked for Eide Bailly

LLP in Fargo, N.D., for 21 years, serving most

recently as an audit partner for the firm.

The Bismarck Cancer Center, a radiation

therapy center, is a cooperative venture of

Medcenter One and St. Alexius Medical Center.

Sean O’Brien

Joe Talago


|PRAIRIE PEOPLE|

AE2S adds to staffAdvanced Engineering and Environmental

Services Inc.(AE2S) recently addedengineers at threeof

its offices inNorthDakota.

Sanford Case joined the firm as a senior project

manager andwill be based at its headquarters inGrand

Forks.Casepreviouslyworked formore than20years as

a vice president and senior project manager at Huitt-

Zollars Inc. inDallas.He is a licensed professional engi-

neer in 15 states and is Leadership in Energy and

Environmental Design certified.

Jared Heller has joined the firm’s Fargo office as a

project manager and will be responsible for overseeing

several projects in Fargo-Moorhead, Minn., as part of

the firm’s water group. Heller specializes in hydraulic

modeling and water infrastructure management issues

and worked most recently at Moorhead Public Service

as a water distribution engineer.

Alec Bry will serve as an engineer in the firm’s

Williston office. Bry will be a part of the firm’s western

area water supply project team and will be responsible

for performing construction observation and design.

Bry recently earnedabachelor’sdegree incivil engineer-

ing fromNorthDakota StateUniversity and interned in

Florida, where he participated in the construction and

upgrade of a water reclamation facility.

Sanford Case

Jared Heller

Alec Bry

Member FDIC

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|BUSINESS DEVELOPMENT|

As consumers’ lives become increasingly

entwined with technology and the

Internet,havingawebsiteversusnothav-

ing one can be the difference between success and

failure for a business. Given that most people use

the Internet every day, the number of businesses

that have yet to embrace the technological age is

surprisingly high. Research funded by Internet

powerhouse Google recently determined that

while 97 percent of consumers search online for

information about products and services,

nearly 60 percent of businesses nationwide

do not have websites.

Armed with those statistics, Google

launched a state-by-state program known as

Get Your Business Online about a year ago

with the goal of assisting small businesses in

improving their web presence. This summer,

Google brought its road show to the prairie,

hosting events for a total of about 800 partici-

pants in Bismarck, N.D., Sioux Falls, S.D., and

Bemidji, Minn. Attendance at the events

exceeded Google’s expectations, according to

Joe DeMike, head of small business advocacy

at the company, who attended the Sioux Falls

event and has been involved with Google’s

BYOB events in all 50 states. In Sioux Falls,

both sessions were standing room only, total-

ing more than 300 attendees. Bismarck’s

event also provided training to about 300

business owners.

According toDeMike, the primary reason

Googlebringswebsitemastery to local levelInternet giant offers state-by-statewebsite training for small business ownersBY KRIS BEVILL

Google representatives offer hands-on website training to small business owners at a Get Your Business Online event in Sioux Falls, S.D., in August.PHOTO : GOOGLE

continued on page 26


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small business owners don’t have websites is

because they think they don’t have enough

time to do it. However, by not having a web-

site, the business is also virtually shutting the

door on a large customer base. “If you are a

small business without a website, you become

invisible to people who could potentially pur-

chase from you,”DeMike says.Many business

owners also believe establishing and main-

taining websites will be too complicated, or

that if they choose to hire an agency to com-

plete those tasks it will be too expensive. “So

we designed the program literally to be fast,

easy and free in order to counteract those

things,” he says.

Each event lasts about three hours and

includes information on search engine opti-

mization, search engine marketing, analytics

and cloud computing.Ninetyminutes of each

session is devoted to providing attendees with

hands-on help to build websites. Paul Ten

Haken, president of Sioux Falls, S.D.-based

online marketing, website design and digital

strategy firm ClickRain Inc., assisted in pro-

moting Google’s South Dakota event and says

he found the hands-on training to be themost

unique aspect of the session. “It’s one thing to

sit by your computer and watch tutorial

videos and try to figure this stuff out, but for a

small business owner to actually have some-

one standing over their shoulder, pointing at

the screen, saying ‘This is how this works,’… I

think that was pretty cool,” he says. “You just

don’t see that kind of personal interaction

from such a large brand very often.”

In addition to hands-on training, web-

sites have been created for each state —

northdakotagetonline.com; southdako-

tagetonline.com; minnesotageton-

line.com, etc.— that offer a full year of com-

plimentary website training for any interested

business person.

Google doesn’t track the types of busi-

nesses that register for its events, but DeMike

has noticed a mix of service providers, prod-

uct developers and typical Main Street busi-

nesses at each event. About half of the atten-

dees already have websites, he says, but they

want to learn how to improve them and

increase traffic to their sites.

Google plans to return to communities

approximately every six months to offer simi-

lar training, according to DeMike, so he

expects to return to the northern Plains this

winter. “These events are not just a one-time

thing,” he says. “We want to stay a part of the

community.” Google partners with local and

national groups for each event, including

Intuit Websites, SCORE, which is a nonprofit

association focused on providing education to

entrepreneurs, and small business develop-

ment centers. PB

Kris BevillEditor, Prairie Business

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Health care mergers can be scary prospects for communities but the

fears associated with merging are oftentimes unwarranted. Such is

the case with Sanford Health, according to the organization’s lead-

ers. The blue lights of Sanford Health have become a common sight on an

increasing number of buildings across the northern Plains in recent years as

the organization steadily expands its network, often through mergers with

existing health care providers. But while the deals may have been met initial-

ly with contention by some community members, the mergers have so far

proven to be beneficial to those communities.

Hesitation and skepticism are natural reactions to health care mergers

considering the emotional investment communities make in local health care

facilities, says Dave Link, senior executive vice president at SanfordHealth.And

health care facilities are often the largest employer in a community so it is

important that communities make the right decision. Becky Nelson, chief

operating officer at Sanford Health, compares concern with health care merg-

ers to the concern often displayed when small schools consolidate. “People’s

financial and emotional attachment in schools in communities is significant,”

she says. “And there is a misconception that ‘we’re going to merge so we’re

going to lose our identity.’”

But in fact, when it comes to health care mergers, communities are often

enhanced by the change because a large system allows for operational enhance-

ments that wouldn’t otherwise be possible. In Fargo, N.D., for example, nearly

$20 million has been saved in supplies and services since the merger between

The Sanford Aberdeen Medical Center is the first project SanfordHealth has built from the ground up. The facility began offeringservices to patients in July. PHOTO: SANFORD HEALTH

|HEALTH CARE |

The Benefitsof BiggerSanford Health executivesdiscuss how the nation'slargest rural health careprovider manages qualitycare across a vast regionBY KRIS BEVILL


|HEALTH CARE|

Sanford Health and Meritcare in 2009. “It’s

been our experience in all of the communities

that we’ve been a part of throughout the region

that we can provide more services to these

communities over time by leveraging the value

of our entire health system,” Link says.

Keeping it LocalSanford Health is the largest rural health

care provider in the nation and the largest

employer in the Dakotas. The vastness of the

region which it services also makes Sanford the

largest health care system in contiguous geog-

raphy in the country, encompassing more than

200,000 square miles and 126 communities.

Despite its size, Sanford Health is committed

firmly to retaining health care services in small

communities. “We really mean it when we say

we want to keep health care close to home,”

Nelson says. “We believe that health care is

every community’s asset. As a health care sys-

tem, we don’t need everything in the larger

towns. It’s just fine to be in the small commu-

nities. That’s what we’re about.”

Servicing such a widespread region may

be Sanford Health’s greatest commitment but

it is also its biggest challenge. Nelson says the

organization has developed a unique structure

to bring all of the separate pieces under one

umbrella, the cornerstone of which is technol-

ogy driven. “We couldn’t do what we do today

without that electronics connectivity,” she says.

Video conferencing and telemedicine pro-

grams are utilized to connect doctors in outly-

ing areas with specialists at larger facilities, for

example. The connectivity also allows hospital

leadership to share ideas and operational

updates with ease.

Another technological feat being carried

out by Sanford Health is expected to revolu-

tionize the way health care is provided

throughout the area. The organization has

been rolling out its electronic medical records

(EMR) system for the past five years. The sys-

tem basically creates one electronic chart for

each patient and can be accessed at any Sanford

facility. Earlier this year, Sanford Health per-

formed what Nelson calls “the big bang” in

Fargo— everyone was brought into the system

simultaneously. The system is expected to

improve the quality of health care by stream-

lining themethod in whichmedical records are

stored and accessed. Gone will be the days of

patients carrying x-rays from room to room or

caregivers at one facility having to spend time

tracking down the history of care given to a

patient at another location.“It’s going to have a

profound change on what’s available to the

patient,” says Nelson, who compares the signif-

icance of the switch to EMR with the move

from landlines to cell phones.

The technological advancement doesn’t

come without a hefty cost, however. Sanford

Health’s annual IT (information technology)

budget weighs in at more than $100 million,

which is another reason why consolidation

can benefit smaller communities, Nelson adds.

The significant financial investment necessary

to make EMR a reality is simply beyond the

reach of smaller organizations, but by being

part of a large system, they can gain access to

the latest advancements.

Construction andConsolidation

To date, the majority of Sanford Health’s

growth has come in the form of mergers. The

most recent consolidation has been in

Bismarck, N.D., where Sanford and Bismarck-

Mandan-based MedCenter One celebrated

their merger on Aug. 29 with a celebration and

unveiling of the 228-bed hospital’s new sig-

nage, symbolizing the final step of a union that

was officially forged earlier in the summer.

Sanford Health plans to make Bismarck-

Mandan the epicenter of western expansion

for the organization as providers work to keep

pace with oil and gas-related development

activities. The organization plans to break

ground on a super clinic in Dickinson, N.D.,

this fall, a project which Nelson says stems

from energy industry growth in the area,

adding that the expansion is being made

easier by the recent merger in Bismarck. A

completion date for the super clinic had not

been set by mid-September, but preliminary

infrastructure work was being conducted at

the site.

Despite its massive size, new construction

is a fairly new undertaking for the organiza-

tion. Sanford Health’s network includes 34

hospitals, but the first project to be built from

the ground up just opened in July. The Sanford

Aberdeen Medical Center, a $60 million proj-

ect, opened July 16 in Aberdeen, S.D., after

approximately two years of construction. The

48-bed medical center connects to Sanford

Health’s previously existing clinic and has

exceeded the organization’s expectations since

opening, according to Nelson. The center plays

a key role in connecting the system’s offerings,

serving as a convenient halfway point between

the organization’s dual headquarters in Sioux

Falls, S.D., and Fargo.

In Fargo, Sanford Health made headlines

earlier this year when it held an official ground

Updates at Sanford Health's existing Fargo medical center are expected to be carried out afterconstruction of the organization's new medical center is complete in 2016.PHOTO: SANFORD HEALTH



|HEALTH CARE |

breaking ceremony for what is said to be the largest private construc-

tion project in North Dakota’s history. In 2016, the Fargo Medical

Center is expected to open its doors to serve more than 4,200

patients each day in a facility that will cover 1.3 million square feet,

equivalent in size to 22½ football fields. The project is estimated to

cost $541 million and will employ 2,000 staffers when finished.

While construction in Fargo is just beginning, another $60

million medical center is further along in Thief River Falls, Minn.

That facility will include a 25-bed critical access hospital and will

expand upon services offered at the organization’s existing clinic.

More than 500 people will be employed at the medical center when

it is complete in 2014, according to the organization. In September,

Sanford Health also began constructing a 45,000-square-foot clinic

in Moorhead, Minn., which is scheduled to open in July 2014. That

facility is set on 27 acres of land along Interstate 94 and will include

lab services, a pharmacy, gift shop and deli, in addition to various

medical services and programs.

Various projects are being undertaken elsewhere in Sanford

Health’s network. A 160,000 square foot sports complex known as

The Pentagon is being constructed at the Sanford Sports Complex

in Sioux Falls. Billed as a “game-changing destination,” the five-

sided facility will house nine basketball courts of varying sizes and

will serve as the epicenter of the larger complex that includes foot-

ball, tennis and soccer amenities.

In Bemidji, Minn., Sanford Health broke ground April 12 for

an orthopedics and sports medicine center which is expected to

open in the spring. The $9million construction project encompass-

es a two-story expansion to the existing hospital. When complete,

integrated services and clinicians from applicable departments will

be centrally located within the hospital. The medical center also

recently received a $100,000 donation from Friends of Sanford

Health which will be used to support the facility’s advanced cardi-

ology program by establishing a dedicated cardiology suite and

allowing for 24-hour cardiac care.

Globally, the organization is also expanding.On Jan. 1, it began

operating its first clinic in Cape Coast, Ghana, Africa. By next sum-

mer, Sanford Health expects to have five clin-

ics in operation at locations throughout

Ghana. In West Dublin, Ireland, a children’s

clinic is expected to be operational in 2013,

also as part of Sanford Health’s world clinic

initiative. A children’s clinic in Israel is sched-

uled for completion in 2014.

A total of $1 billion in construction

projects are planned over the course of the

next five years, according to the organization.

Nelson says Sanford Health will continue to

evolve and grow domestically as needed,

although no additional consolidation proj-

ects are in the immediate plans. “We’ve had a

lot of inquiries because it’s happening in the

industry,” she says, adding that health care

systems across the nation are realizing that

consolidation can achieve necessary economies of scale in order to

control costs. Sanford Health does not seek out consolidations,

however, according to Nelson, who says the organization instead

simply “answers knocks at the door.” From there, merger discus-

sions continue depending on the circumstances of each unique sce-

nario. “Sometimes we ask them to stay for dinner, sometimes we

don’t,” she says.

Sanford Health President and CEO Kelby Krabbenhoft said

recently that the organization’s $3 billion in annual revenues allow

it to take on the long list of development projects. The organization

also benefits from a sizeable piggy bank provided by its namesake,

Denny Sanford, who has donated nearly $700 million since 2007,

and holds the title of delivering the largest gift ever to a U.S. health

care organization— $400million in 2007. Sanford’s donations have

enabled the expansion of the Sanford Research division, which

employs about 230 researchers focusing on specific areas including

diabetes, breast cancer, cardiovascular health, children’s health,

sports medicine and health outcomes and prevention. Researchers

working on The Sanford Project, a quest to cure Type 1 diabetes,

recently completed enrollment for a clinical trial which will test two

medicines to determine their effectiveness in controlling blood glu-

cose levels with less or no insulin. Fulfilling enrollment for this

study was a significant milestone because the study required recent-

ly diagnosed children to participate, a demographic which is usual-

ly difficult to fill. The Edith Sanford Breast Cancer Foundation is

dedicated to curing the disease to which Denny Sanford lost his

mother, Edith, when he was a small child.

A devotion to research and advancement is evident elsewhere

throughout the Sanford Health network, notably among some of the

device inventions achieved by staff physicians. Earlier this year, Corey

Teigen, chairman of Sanford Health’s interventional radiology

department, performed the first abdominal aortic aneurysm stent

graft in the U.S. at Sanford’s Fargo medical center using a device he

developed. Teigen had been developing the device for years, prior to

the Sanford-Meritcaremerger, but he says Sanford has been very sup-

Workers unveil the new Sanford Health signage at the former MedCenter One building inBismarck, N.D., on Aug. 29, marking the final step in the health care providers' merger.PHOTO: SANFORD HEALTH

|HEALTH CARE |

portive of the research since the organization

entered the pictutre.

Link, who oversees Sanford Health’s

research division, says the organization’s com-

mitment to research and advancing overall care

helps to attract and retain the most talented

physicians, resulting in improved care and qual-

ity for the patient. Additionally, because the

research centers are closely connected to treat-

ment facilities, there is less lag time between

break throughs and implementation, allowing

patients more access to cutting-edge procedures.

Despite the size of the network and the

growing number of services and specialties,

Nelson and Link both say the mantra of the

organization is quite simple: provide the best

care to people in the areas where they live.“We

don’t grow big just for the sake of growing

big,” Nelson says. “We focus on our core busi-

ness and areas that are important to the peo-

ple we serve.” PB

Kris Bevill

Editor, Prairie Business






|JOBS|

We’reall familiarwith thesaying,“goodhelp

is hard to find.” In our region, that senti-

ment has never been truer. The recent

period of economic activity in the upperMidwest has

spurred significant job creation, but the number of

available workers in sparsely populated states like

North Dakota and South Dakota hasn’t been able to

support the number of available jobs, leaving some

employers struggling to fill vacant positions. To cope

with this unique situation, businesses, organizations

and government agencies are employing a variety of

methods to attract not just any candidates to the

region’s workforce, but the right ones.

S.D. WINSSouth Dakota’s leaders view the state’s short-

age of adequately skilled workers as a long-term

issue. This year, state agencies began implementing

policies to address the workforce situation in the

Mount Rushmore State. In January, Gov. Dennis

Daugaard announced the launch of these initia-

tives, known collectively as South Dakota WINS,

with the goal of attracting and developing a

stronger, better-educated workforce. “Just as much

of the rest of the country is experiencing, our pop-

ulation is aging and retiring from the workforce,”

says Daugaard policy advisor Kim Olson. “That

trend, in combination with South Dakota’s strong

business growth and economy, means we have

more jobs than workers. It’s a good problem to

have, but we recognize the need to fill the gap to

assist further business growth.”

Twenty programs are housed under the S.D.

WINS umbrella, each categorized into one of four

goals: preparing youth, skilled jobs training, rural

health occupations and recruiting new South

Dakotans.The programs are geared toward alleviat-

ing ongoing shortages in sectors that are expected to

be most in need of workers — engineering, finan-

cial services, health care, information technology

(IT),manufacturing and STEM (science, technolo-

gy, engineering and math) teachers. Some of the

programs required legislative action during the

2012 session and so were not launched until the

new budget began in July, according to Olson, but

all programs presented to legislatorswere approved.

HelpWantedStates and businessesaggressively recruitnew workers to thenorthern PlainsBY KRIS BEVILL


|JOBS|A variety of approaches are being taken to

make the initiative successful, but money always

talks, so a number of the programs will utilize cold

hard cash to achieve their goal. For example, under

the Preparing OurYouth program, the state award-

ed six university-public school partnerships with

about $50,000 each to improve science and math

education.The state also plans to offer bonus pay to

STEM teachers. To improve the skills of available

workers, approximately $1 million of South

Dakota’s federal Community Development Block

Grant allocation has been distributed to fund local-

ized job training efforts.

Other recruitment strategies have more of a

grassroots feel. Former state residents, people

who were raised in South Dakota but moved

away for college or a job opportunity, for exam-

ple, were an early target group for potential

recruitment so the South Dakota Department of

Labor and Regulation created

www.DakotaRoots.com, a website designed to

entice out-of-state workers to return home. This

summer, the labor department also collaborated

with South Dakota universities to issue a mailer to

alumni who have moved out of the state, remind-

ing them that jobs are available in South Dakota.

Response to both campaigns has been impressive.

DakotaRoots.com boasts more than 13,000 regis-

trants since its launch, representing individuals

from every state in the nation. Traffic to the website

nearly quadrupled after the alumni mailer, accord-

ing to Dawn Dovre, public affairs director at the

state labor department. Of the registrations

received as of early September, approximately 2,500

people had accepted positions in the state, she says.

But considering that the average age of employees

being placed in jobs through the program is 36, it is

likely that the returning workers are bringing fam-

ilies with them, thus boosting the state’s population

and future workforce pool even further.

The labor department has also targeted older

workers and stay-at-home parents as existing

groups that could contribute to the workforce.

South Dakota is projected to have more jobs than

workers through 2020, according to Dovre, so

every nontraditional groupwithin the state is being

examined for its potential.

Dovre and the governor’s office suggest that

businesses in need of employees utilize the state’s

resources to help them fill the positions. They rec-

ommend posting job openings with the labor

department and reviewing the department’s list of

job seekers to find a potential match. Olson says

many South Dakota businesses also work directly


http://www.DakotaRoots.com


|JOBS|

with post-secondary schools to ensure students

are receiving adequate training for fields in need

of workers.

Another S.D. WINS program, called 1,000

New South Dakotans, provides a unique opportu-

nity for businesses to recruit neededworkers in the

areas of manufacturing, IT, engineering and finan-

cial services. The state contracted national recruit-

ment firm ManpowerGroup to fill 1,000 jobs in

those sectors by May 2014, focusing on in-state

recruitment for the first 30 days of a job listing and

expanding the searchnationwide afterward, specif-

ically targeting surrounding states and areas with

depressed economies. By early September the firm

had recruited more than 1,200 possible workers

and submitted 655 people for potential positions,

according toClintonBrown,programmanager for

Manpower’s Sioux Falls office.

Brown says the biggest hesitation for out-of-

state workers considering South Dakota is simply

relocation. However, once the firm provides peo-

ple with an analysis of wages and cost of living

comparisons between their current location and

South Dakota, “we’re usually pretty successful at

that point,”he says. Brown,who is himself a trans-

plant to SouthDakota, believes strongly that when

people do make the decision to move to the state,

they don’t regret it. “Midwest states have great

benefits, (such as lower income tax rates) andonce

people come here and realize the quality of life,

they stay,” he says.

In his experience as a recruiter, Brown has

found the companies that are the most successful

in attracting new employees are those with creative

perks. Insurance packages and flex accounts are

pluses, but other benefits can tip the scale in the

employer’s favor. For example, Brown says several

Manpower clients have addedhealth centers to their

facilities; others offer relocation plans. “Any extra

thing you can do in this environment can go a long

way,” he says. “Companies are realizing that if they

have some good fringe benefits along with a good

wage, they will attract good employees.”

If South Dakota is to meet its need for work-

ers, an increasing number of people need to be con-

vinced that the move will be worth it. The number

of nurses and IT positions in the state is expected to

increase by 20 percent from 2010 to 2020.

Manufacturing jobs, financial positions and engi-

neering professions are also expected to increase

significantly over the next decade.

Manpower is predicting similar scenarios in

some of the same sectors on a wide-spread scale.

“There is a talent shortage that is global and it will

continue that way,” Brown says. He attributes the

long-term issue to inadequate education. There

may be enough people in the U.S. to fill the short-

ages, but they lack the necessary skills for the avail-

able jobs. “You can’t just go to high school and

think that you’re going towork these jobs,”he says.

“You’re going to have to get the skills necessary to

work in those jobs.”He commends SouthDakota’s

efforts to boost offerings at technical colleges to

train workers for in-demand jobs and says its ini-

tiative to address the overall workforce shortage

situation sheds light on an issue other state leaders

are choosing to ignore.

‘The First Fargo’The growing technology sector was the spe-

cific focus of a recent gathering in Fargo, N.D.

The one-day conference, subtitled “The Next

Generation of Jobs in North Dakota,” was hosted

by the Fargo Moorhead West Fargo Chamber of

Commerce and included speakers from several of

the metro area’s cutting edge technological com-

panies who offered their insights into recruiting

employees in the highly competitive technology

jobs market.

Speakers at the event agreed that despite the

challenge of recruiting workers, Fargo is an attrac-

tive location for businesses because it offers

employees a quality of life not found in other states

and has a strong economy to support business

activities.An increasing number of technology and

biotechnology firms are basing their operations in

Fargo, a scenario which can assist in recruiting

qualified workers to the area, according toMichael

Chambers, president and CEO of biotechnology

firm Aldevron. “It’s hard to bring people in if

there’s only one game in town,”he said.

Manycompany leaders saidFargo’s closeprox-

imity to multiple universities assists their recruit-

ment efforts and they like that they are able to work

directly with the colleges to groom new crops of

workers for the industry. They also utilize social

media, specifically theprofessionalnetworkingweb-

site www.LinkedIn.com, to quickly and cost-effec-

tively spread the word when seeking new employ-

ees. Jim Traynor, director of client management at

health care software firm Intelligent Insites, said

social media sites such as LinkedIn are a great way

for the company to connect with people who may

have left the state and want to return. His compa-

ny is aggressively recruiting new employees to its

Fargo headquarters using a variety of methods,

including social media. Traynor said the firm has

doubled in size to about 70 employees since the

beginning of the year and expects to employ more

than 100 workers next year.

Sen. JohnHoeven,R-N.D., co-sponsored the

daylong event and offered words of praise for the

state during his welcome speech, noting that

North Dakota has succeeded in building a strong

legal, tax and regulatory environment that is

attractive to businesses. He credited the energy

industry in the western part of the state for a large

part of the state’s economic growth, but said the

eastern part of the state boasts a healthy technol-

ogy sector with ample potential for growth.

Companies at the event represented a “glimpse

into the technology development that is driving

this country,” he said. “This really is the future.”

Many South Dakota counties are in need of more workers to meet growing demands from businesses.State officials and recruitment specialists agree that while the state may be losing some prospectiveworkers to North Dakota’s oil and gas industry, it also gains workers who have been in the Bakkenregion and want to escape the rigorous demands of oil field work.IMAGE: SOUTH DAKOTA DEPARTMENT OF LABOR AND REGULATION

http://www.LinkedIn.com

|JOBS|

Jeff Davis, manager of enterprise evan-

gelism for Google, told the event’s 300 atten-

dees that as technology advancements are

more readily incorporated into businesses, the

most desirable qualities in potential employ-

ees are also changing. Jobs are faster-paced

than they used to be and often require a

“mash-up of skills,” which increases the value

of a person’s creativity and problem-solving

skills versus an educational degree, he said.

From the employee’s perspective, Davis

said research has shown that while salary and

benefits may have traditionally been the main

drivers for employment, thenext-generationof

employees rank access to technology, such as

smart phones or other devices, over salary

when choosing an employer.

Doug Burgum, entrepreneur, venture

philanthropist and founder of Great Plains

Software-turned-Microsoft campus, deliv-

ered a keynote speech on how to utilize tech-

nology and make companies more attractive

to future employees. He encouraged busi-

nesses to confront assumptions related to

business structures and re-evaluate those

ideas. For example, many businesses assume

that when a new employee is hired, that per-

sonmust have space within an office. In fact,

that employee may not need to work in an

office setting because technology exists to

maintain connectivity and collaborative

efforts fromanywhere.Hewarned employers

that the younger generation is inherently

more tech-savvy and urged business leaders

to embrace advancements or“be run over by

the next generation.”

Following Burgum’s speech, his son,

Joe, who also happened to be the youngest

attendee of the conference, askedwhat Fargo

can do to make itself known in the technol-

ogy realm as “the first Fargo” rather than a

second Silicon Valley. Burgum cited the

state’s wealth and supportive leaders as being

two unique aspects, but settled on the

strengths of the people living andworking in

the area as being its most valuable assets.

“We have an opportunity to think about cre-

ating our own future,” he said. “But we can’t

be complacent.We need risk takers.” PB

Kris Bevill







|NATURAL GAS|

Prepare toGatherIncreased natural gasproduction in the Bakkenopens up the opportunityfor new venturesBY KRIS BEVILL

Just as businesses and residents of

western North Dakota were begin-

ning to catch their breath after half a

decade of unprecedented petroleum-

related development and settle in for an

anticipated two decades of boom times, a

recent study predicts that the nextwave of

development is soon on its way in the

form of natural gas production.

According to energy market ana-

lysts at Bentek Energy LLC, the amount

of natural gas produced at well sites in

the Williston Basin could triple in the

next 10 years, making vital the need for

expanded gas gathering pipelines and

processing facilities throughout the

area. The needed expansion work will

likely usher in a new period of opportu-

nity for construction projects, service

providers and fossil fuel energy workers.

Because the supply of gas will be so

abundant, it also provides the opportu-

nity for demonstrations of ingenuity by

those developing unique ways to utilize

natural gas. North Dakota is ready for

this new challenge, says state

Agriculture Commissioner Doug

Goehring, who points to a history of

self-sufficiency and the innovative

nature of Midwesterners as proof that

new strategies are likely to be

deployed in order to put the abundant

resource to its best use. “We are truly

pioneers in many respects, so I think

there are opportunities and I think

people will continue to look for areas

we can improve upon,” he says. “The

sky’s the limit.”

Goehring, along with the governor

and attorney general, serves on North

Dakota’s three-member Industrial

Commission, a group tasked with over-

seeing certain state interests, including

the renewable energy program, the lig-

nite energy program, oil and gas

research and the North Dakota Pipeline

Authority. Earlier this year, the Pipeline

Authority and the Industrial

Natural gas is flared at an oil well in Williams County, N.D.SOURCE: AMY DALRYMPLE/FORUM COMMUNICATIONS


|NATURAL GAS|

Commission asked Bentek to analyze future natural gas

productivity in the region and explore what pipeline

infrastructure, if any, would be needed to accommodate

the supply. Justin Kringstad, director of the North

Dakota Pipeline Authority, says the commission’s inter-

est in a natural gas study was prompted by increasing

natural gas ratios currently being experienced at older

Bakken oil wells in Montana. North Dakota leaders

wanted to know if the younger oil wells in their state

could be expected to perform the same. “The conclu-

sions came back that, yes, we can expect to see growing

gas-to-oil ratios as these wells age, and that has a significant impact once

you start looking at another 30,000 wells in North Dakota,” Kringstad

says. “The volume adds up very quickly and so the infrastructure — the

number of gas plants and pipelines — will be affected greatly.”

Connecting the SitesNatural gas processing infrastructure already lags behind the supply

simply because of the nature of the production process.Of the twomajor

sources tapped at well sites — gas and oil — oil is the more desirable

product and can be captured and trucked from the well site to process-

ing facilities whereas natural gas, which is considered a secondary prod-

uct, cannot be gathered for processing without pipelines. Therefore, wells

are initially drilled for oil and if the well is fruitful, pipelines are put in

place later to handle gas production in response to supply and demand

metrics. While dry natural gas prices are at historic lows, the Bakken’s

natural gas is “liquids-rich,” meaning it contains other valuable liquids

such as propane and ethane, and therefore commands a higher market

price, making infrastructure investments worth the cost. However, it

takes time to install natural gas gathering pipelines once a well site has

been deemed worthy and oil wells have been drilled at a rapid pace, cre-

ating a situation which has made gas flares a common sight in the west-

ern North Dakota sky. If there are no pipelines to collect the gas, pro-

ducers simply burn it off.

Thousands of miles of small-diameter gathering pipelines are

already in place in areas of theWilliston Basin, but they do not stretch far

enough into all areas of the region to adequately handle increased pro-

“We are truly pioneers inmany respects, so I thinkthere are opportunitiesand I think people willcontinue to look for areaswe can improve upon. Thesky’s the limit.”

- North Dakota AgricultureCommissioner Doug Goehring

A map of existing natural gas plants and pipelines in the Bakken region offersan indication of what areas have yet to be developed and will likely becometargets for expansion. SOURCE: NORTH DAKOTA PIPELINE AUTHORITY



|NATURAL GAS|

duction rates. According to Kringstad, the sheer size of the area is the

industry’s biggest challenge as it begins to expand its gathering and

processing capabilities. “We’re looking at an oil field that is 15,000

square miles,” Kringstad says. “Prior to the Bakken, that was simply

unheard of, to have an oil field of this size.” The harsh climate of the

northern Plains also means that construction activities are difficult to

execute during the winter months. Additionally, in order to place

pipelines companies must negotiate with landowners for easement

areas, some of whom may have become skeptical of further develop-

ment if they have had bad experiences with oil and gas developers in

the past. Goehring says he is sympathetic to landowners’ concerns and

encourages companies to limit their impact on the land as much as

possible, but he also reminds landowners that increased pipeline infra-

structure will limit the amount of flaring at wells and will add to North

Dakota’s growing role in providing energy for the entire nation.

Kringstad also emphasizes reduced flaring as a positive aspect of the

growth, pointing out that as more pipelines are put into place, new oil

wells may not flare gas at all because there will be an existing pipeline

network to gather gas, allowing for the immediate hook-up to freshly

drilled wells.“We’re getting the snowball rolling down the hill,” he says.

“As this footprint grows, as we expand our reach of these gathering sys-

tems, each new well drilled in the future is going to be that much clos-

er to a pipeline system.”

Investors at the ReadyNorth Dakota’s current natural gas processing capacity rests at

about 900 million cubic feet per day. As of August, proposed

projects were expected to boost that capacity to approxi-

mately 1.4 billion cubic feet per day by 2014. However, the

Bentek study found that as much as 3 billion cubic feet of

natural gas could be produced each day in the region by

2025, suggesting that natural gas processors must expand

their capabilities even further. “That’s what the industry is

working on right now — trying to understand the produc-

tion growth, what the timing would need to be for new

plants or infrastructure,” Kringstad says. “We don’t need

enough plants today for 3 billion cubic feet, but when is the

appropriate time to get these projects moving forward?

That’s one of the big questions right now.”

Oklahoma-based ONEOK Partners LP currently oper-

ates four natural gas processing facilities in the Williston

Basin and is the largest operator of natural gas gathering and

processing facilities in the area. It is expected to bring three

additional processing plants online by 2014 and will install

additional pipeline infrastructure to gather the gas, increas-

ing its total processing capacity to 490 million cubic feet per

day and bringing its total investment in the region to

approximately $4 billion. “We’re there for the long term and

will be there as long as our services are necessary,” company

spokesman Brad Borror says. Borrer admits the industry is

always playing catch-up to accommodate natural gas pro-

duction and says the Bakken region is no different than

other gas plays in the nation in that respect. “We work with

producers to time it as best we can to connect to their rigs as they

come on-line,” he says. “Sometimes there’s a delay.”

ONEOK is no doubt one of many processors evaluating the need

for expansion in the Williston Basin. Established players such as

ONEOK may have some advantage for future projects, but Kringstad

says he’s seen a few new players enter the field recently and he expects

more to come. “It’s very competitive,” he says. “There are numerous

companies that are looking for opportunities in North Dakota.” The

industry’s anticipated new investment in natural gas pipelines and

processing plants over the next few years is already approaching $4 bil-

lion, he says.

Unique OpportunitiesPerhaps the most intriguing aspect of increased natural gas pro-

duction, according to those involved at the state level, is the opportu-

nity for value-added production projects. Goehring says he has had

multiple conversations with companies interested in producing vari-

ous products derived from the liquids in natural gas, such as plastics

or polyurethanes. “There are so many things that can be done with

petroleum products,” he says, adding that he is encouraging of those

types of projects but none have moved beyond preliminary discus-

sions at this time.

Two proposals that are on the table, however, would utilize gas for

fertilizer production. Proponents of the projects say fertilizer plants are

a perfect fit for the area because they can utilize some of the ample gas

supply to create a product that is in high demand locally at a more

The current capacity of North Dakota’s natural gas processing facilities isapproximately 900 million cubic feet per day. As of August, proposed projectsfor the Bakken region will bring that capacity up to about 1.3 billion cubic feetper day by 2014. However, a recent study suggests that the amount of naturalgas produced in the region could be more than double that amount by 2025,leaving a significant gap for processors to fill.SOURCE: NORTH DAKOTA PIPELINE AUTHORITY

continued on page 40


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|NATURAL GAS|

affordable price than current options. One of the

projects is being spearheaded by Northern Corn

Development Corp. and calls for a $1 billion

investment from the region’s farmers to establish

a cooperative-type plant in the Oil Patch that

could produce enough dry product fertilizer per

year to service 10 million acres. So far the state

has provided two small grants to assist in the

development of this project. Another proposal,

suggested by N-Flex LLC, would utilize natural

gas at the wellhead by locating mobile processing

units at sites to produce up to 3.3 tons of anhy-

drous ammonia per day per unit. The product

could be sold within a small radius of the plants,

reducing transportation costs and lessening traf-

fic on overworked Oil Patch roads. Company

founder Neil Cohn has requested a $1 million

grant from the Industrial Commission to offset

some of the costs of the initial unit. The unit

would need to be modified to accommodate

North Dakota’s harsh winter climate, therefore

the first few mobile processing plants could cost

more than $4million each, but future units could

cost closer to $1 million as the design process is

perfected, according to Cohn. The Industrial

Commission had not yet approved Cohn’s

request for funding by late August but the state

was supportive of the project and Cohn expected

to eventually receive the green light to commence

development.“We’re pretty confident this project

will move forward and we’re very confident that

this project makes sense,” he said.

Goehring says both projects offer potential

to benefit the entire region. The projects will

produce different fertilizers which are both in

high demand from farmers in the area. The

Northern Corn Development project would

service a massive area, which makes it desirable

for the agriculture industry throughout the

northern Plains and into Canada, whereas the

N-Flex project offers reduced environmental

impact because it isn’t reliant upon pipeline

infrastructure. “That’s a big plus because if we

don’t have time to get gathering lines into wells,

this provides an opportunity to immediately

reduce flaring, collect the gas, turn it into fertil-

izer and create revenue for the mineral owner

and the state,”Goehring says.“It has a lot of pos-

itive attributes to it.” PB

Kris Bevill



continued from page 38



On Aug. 25, agriculture equipment manu-

facturer Horsch Anderson LLC broke

ground on a 100,000 square-foot manu-

facturing facility in Mapleton, N.D., marking the

start of what is expected to be a time of significant

growth for the town of about 800 people.

“This company is going to be a game chang-

er for our town,” says Mapleton Mayor Eric

Hillman.“It’s one of the things we’ve been work-

ing on for some time, is to get somebody in that

can help our city grow.”

Mapleton is a bedroom community for

nearby Fargo and has experienced some difficul-

ty retaining its individual identity over the past

several years. The town’s school, which has about

100 students in grades kindergarten through 12,

has narrowly avoided the chopping block three

different times, according to Hillman. Now, the

potential for an increasing population means the

school may need to consider expanding in a few

years as opposed to shutting down. Indeed, with

an anticipated workforce of up to 300 in five

years, Horsch Anderson has the potential to pro-

vide a major boost to the town and would be

considered a “get” for a city of any size, Hillman

says. “Fargo is even jealous,” he adds.

Workers at the Horsch Anderson plant

could live in Fargo and commute the five miles to

Mapleton, but Horsch Anderson President Kory

Anderson hopes his company will breathe new

life into the small town. “We want to be a part of

their growth and development,” he says.

Anderson began his relationship with

Mapleton last year when he purchased an exist-

ing manufacturing business to serve as a parts

manufacturing plant for the current Horsch

Anderson assembly facility in Andover, S.D.

When Horsch Anderson determined the criteria

for an additional location — proximity to a

major city with available skilled workers, conven-

ient interstate access and good visibility — he

knewMapleton was an ideal candidate.“It’s right

off the interstate [I-94] and it’s only a few miles

west of Fargo so it’s kind of the perfect situation

for having a business,” Anderson says.

Anderson informed Hillman of his compa-

ny’s interest in Mapleton and the city formulated

a tax increment financing package to assist with

infrastructure costs for the $12 million project.

Now that construction has begun, the project

should move ahead quickly. Some management

positions have already been filled and the plant is

expected to begin production by June 1. The

facility will initially employ 40 to 50 workers but

will quickly ramp up to 80 full-time employees.

In the first year of production, Anderson expects

400 machines could be produced in Mapleton,

increasing the company’s sales by 50 percent

from 2011’s total of $20 million. The company

expects to expand the facility within a few years

and employ 200 to 300 workers.

Anderson attributes Horsch Anderson’s

steady growth to innovative products that

increase farmers’ profitability and efficiency.

When the company was launched in 2000

through the combined efforts of Anderson

Industries, Germany’s Horsch Maschinen GmbH

and Harper Industries of Harper, Kan., its initial

focus was air seeding equipment,which ismarket-

ed mainly to small grain farmers in the Dakotas

and Canada. The introduction of a tillage tool

called the Joker in 2009 expanded the company’s

market area and is responsible formuch of its cur-

rent rate of growth. “It really expanded our busi-

ness into new markets and has taken off very

quickly in the past few years,”Anderson says. “We

have a huge demand right now for our production

and we have to make a move quickly to increase

our production to keep up.”

Anderson, whose family farms 5,000 acres

near Andover, says farmers have become more

interested in innovative equipment as land

prices have skyrocketed in recent years. “When a

farmer has to pay so much more for his land or

the cash rent, he has to do everything possible to

maximize his efficiency and his profitability so

he can make money farming that land,” he says.

Even in down times, such as nationwide

droughts, “farmers are still going to be farming

and the successful farmers are still always look-

ing at ways to be more efficient and maximize

their profitability.” PB

Kris Bevill



|RED RIVER VALLEY|

Groundbreakingmarks newbeginning fortiny townAg equipment manufacturerexpands to Mapleton, NDBY KRIS BEVILL

Company and government officials participate in a ceremonial groundbreaking Aug. 25 at thesite of Horsch Anderson LLC’s 100,000-square-foot manufacturing facility in Mapleton, N.D. Leftto right: Kory Anderson, president, Horsch Anderson; Traugott Horsch, director, HorschMaschinen GmbH; N.D. Gov. Jack Dalrymple and Mapleton Mayor Eric Hillman.PHOTO: HORSCH ANDERSON LLC



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|SOUTH DAKOTA|

Joining forcesEconomic development groups launch regionalwebsite to attract and expand businessBY KRIS BEVILL

For rural community leaders, the task of promoting their

towns to prospective businesses in a global landscape can

easily make one feel as though they are the needle in the

proverbial haystack. There may be a number of project developers

and businesses seeking compatible sites that would make a great

fit with the community, but drawing site selectors’ attention to

lesser known regions of a state with minimal resources can be a

gargantuan challenge. Many economic development divisions in

rural communities consist of just one person working with a tiny

operating budget. How can they compete with more populated

regions of a state and stand out from the crowd?

In northeastern South Dakota, 16 small communities stretched

across 30 counties and GROW South Dakota have come together to

combat that challenge through a collaborative web-based economic

development portal designed to entice site selectors to their region. The

SouthDakotaPrairieGatewaywebsite—www.SDPrairieGateway.org—

provides informationrelated toreal estate,availablework forceand incen-

tives packages for the entire region aswell as for each individual commu-

nity. It is believed to be the first project of its kind in theU.S. to promote

anentire region through the combinedefforts of the area’s communities.

Communities involved represent an extremely rural region of

the state. Aberdeen, with an approximate population of 25,000, is the

largest community affiliated with the project. Funded in part by a

$149,000 grant from the USDA Rural Development agency, South

Dakota Prairie Gateway’s mission is to attract and expand businesses

in areas thatmay not otherwise have themeans to effectively promote

their strengths to prospective businesses, according to Paula Jensen,

funds development director for GROW South Dakota.

GROW South Dakota served as the project developer for

SDPrairieGateway.org. Little Falls, Minn.-based Golden Shovel

Agency was selected to create andmanage the website and social mar-

keting plan. Jensen says Golden Shovel won the project because it is

focused solely on economic development. “Golden Shovel has a net-

work of national and regional economic development partners, years

of experience in the industry and tailor their web development to eco-

nomic development organizations,” she says, adding that because the

majority of site selectors seek initial information about communities

from the Internet, a website is a community’s most important busi-

ness recruitment tool.

Social media has become a crucial aspect of a web marketing

plan and that phase of South Dakota Prairie Gateway’s project began

in late July with the launch of a Facebook page and Twitter account.

In late August, Jensen said the impacts of those efforts had been

growing weekly.

Ultimately, Jensen and others involved the Prairie Gateway proj-

ect would like it to serve as a model for other rural regions of the

prairie to emulate. “It’s obviously something that can be replicated,”

she says. Prairie Gateway developers are willing to provide guidance

and documents to economic development groups in other regions to

give them a head start with their own plans. “There’s no need to cre-

ate the wheel again,” she says. PB

Kris Bevill



· Aberdeen Development Corporation· Absolutely! Aberdeen· Campbell County Economic Development· Clark County Economic Development· DeSmet Economic Development Corporation· Deuel Area Development Inc.· Eureka Community Development Company· Faulkton Economic Development· Glacial Lakes Area Development· Grant County Development Corporation· GROW South Dakota· GROW Spink· Ipswich Community Economic Development· On Hand Development Corporation· REED Fund· Sisseton Economic Development Corporation· Webster Area Development Corporation

Membersof SouthDakotaPrairie Gateway include:

Development agencies in rural northeast South Dakotahave joined to promote the area's overall businesspotential. SOURCE: SOUTH DAKOTA PRAIRIE GATEWAY

http://www.SDPrairieGateway.org%E2%80%94



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|WESTERN NORTH DAKOTA|

Mandan-ledconsortium gets$9.7 million forbusiness loansFunding designed forbusiness owners withgood credit, lack of equityBY KRIS BEVILL

By December, businesses in at least 38 municipalities through-

out North Dakota will have the opportunity to apply for a

small business loan program that could, for some, make the

difference between starting up and giving up.

The State Small Business Credit Initiative, signed into law in 2010,

is a $1.5 billion federal program designed to provide support for small

businesses by awarding states funds for programs which can be used to

assist credit-worthy small businesses that may not qualify to receive

loans on their own. InAugust, a consortium of municipalities led by the

city of Mandan finalized an agreement to receive $9.7 million from the

U.S. Department of the Treasury under the program. The Lewis and

Clark Regional Development Council in Mandan will serve as the pro-

gram administrator and is currently putting the finishing touches on

the details, according to Ellen Huber, business development and com-

munications director for the city of Mandan.“We anticipate having the

loan participation program up and running and available to business-

es no later than the beginning of December,” she says.

Eligible businesses must have no more than 750 employees and

emphasis is given to businesses with 500 or fewer employees. “It does

exclude some North Dakota businesses, but the vast majority of our

existing businesses and start-up businesses would be eligible,” Huber

says. Funding can be used for any aspect of business, including prop-

erty purchases, expansion projects, operating expenses or inventory

costs. The average loan amount is anticipated to be about $100,000,

but the program is able to accommodate loans ranging in size from

$10,000 to $1 million.

Both start-up companies and potential expansion projects can

apply for funding through the federal program. However, it can be

especially helpful to start-ups because those business owners often do

not have the equity banks require in order to approve loan requests,

Huber says. Banks typically ask business owners to provide 30 percent

equity. This program can reduce that amount to just 10 percent.

Huber expects that up to 265 loans could be awarded before the

federal portion of the program ends in 2017. However, the program is

designed so that municipalities could continue to provide funding past

the federal end date if they choose to do so.“As long as the funds are used

responsibly, the program could go on in perpetuity,”Huber says, adding

that the program also does not require matching funds from the local

community, which made it attractive to consortium organizers.

Municipalities in the Mandan consortium include: Almont,

Beach, Beulah, Bismarck, Bowman, Carson, Casselton, Crosby,

Dickinson, Dodge, Dunn Center, Fargo, Garrison, Glen Ullin, Halliday,

Hazelton, Hazen, Hebron, Hettinger, Killdeer, Lincoln, Linton,

McClusky, Minot, Mott, New England, New Salem, Regent, Sentinel

Butte, Steele, Turtle Lake, Underwood, Watford City, West Fargo,

Williston andWilton.

A total of $13.1 million was available for North Dakota. Funds

were divided between theMandan consortium and a consortium led by

the city of Carrington based on population. PB

Kris Bevill





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In July, Beulah-N.D.-based Coteau Properties

Co. welcomed a new dragline into operation

at the nation’s largest lignite coal mine,

Freedom Mine, north of Beulah. The 13-mil-

lion-pound Bucyrus Erie Model 2570 walking

dragline, dubbed Freedom’s Frontier, had been

purchased in 2003 but sat unassembled for sev-

eral years, patiently waiting to be called into duty

when the need to access deeper seams of coal

required its use. And now its time has come.

Coteau Properties, a subsidiary of Texas’

North American Coal Corp., has operated the

mine since 1983 and supplies 15 million tons of

coal annually to Basin Electric Power

Cooperative’s Dakota Coal Co., which in turn

markets the product to several North Dakota

power plants as well as to the Great Plains

Synfuels Plant in Beulah. Ultimately, those 15

million tons of coal produce a combined 1,600

megawatts of electricity each year as well as nat-

ural gas and other products. Prior to July, two

draglines identical to Freedom’s Frontier had

been able to efficiently move the massive

amounts of clay material at the mine — known

as overburden in the mining industry — to

access the coal that rests below, but shallower

seams of coal have been mined through over the

past two decades and additional equipment has

become necessary in order to efficiently mine

deeper sources of coal.

“We’re getting to a point in time where

demand from Dakota Coal is still at 15 million

tons but the amount of overburden is growing,

so we’ve got to move more earth to get the same

Freedom’s Frontier digs inAdditional dragline at lignite mine allows access to deeper coalBY KRIS BEVILL

Freedom’s Frontier, one of threeidentical massive draglines used atthe Freedom Mine near Beulah, N.D.,to remove the layer of earth abovelignite sources, stands 215 feet talland has a boom length of 340 feet.PHOTO: NORTH AMERICAN COAL CORP.


number of tons out of the ground,” says David

Straley, manager of government and public

affairs at North American Coal. “By far, when

you look at the number of yards that we move,

the best and easiest option is the dragline.”

Each of Coteau Properties’ draglines can

scoop up 150 tons of earth per minute in mas-

sive buckets that hold the equivalent of four

4-wheel drive Suburbans. Without Freedom’s

Frontier, Coteau would need to employ a

truck and shovel fleet or some other type of

moving equipment to remove the additional

overburden, but that option wouldn’t be as

economical, Straley says. He declined to

release the cost of the Frontier, which is not a

new model and was previously used at a coal

mine in Illinois, but says new draglines could

cost as much as $180 million. The two

draglines already in use at Freedom Mine

were purchased for $40 million each in the

1970s, according to Coteau Properties.

Even though shallow seams of coal have

been mined through, Freedom Mine is far

from being depleted of its lignite. According to

Coteau Properties, North Dakota is estimated

to have enough lignite to last 800 years at the

current rate of use. The current 15 million-

ton-per-year supply contract with Dakota

Coal runs through 2035 and the addition of

Freedom’s Frontier will allow Coteau

Properties to meet that demand at the best

cost, Straley says. Life of mine plans offer an

indication of how deep the coal will be 25

years from now and Straley assures it won’t be

a situation where deeper digging is continu-

ously required to meet supply demands. “Even

though it’s deeper than it was in the past few

years, it’s not going to be so deep that it will

make it uneconomical to mine,” he says.

“We’ve got access to coal for as long as they

would ever want.”

Fifteen new employees were hired in

direct relation to the commissioning of

Freedom’s Frontier. Coteau Properties entire

staff includes nearly 400 employees. PB

Kris Bevill



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|ENERGY|

Fracking, the use of hydraulic pressure to

release natural gas and oil from shale,

has the potential to meet energy

demands with U.S. resources and stimulate the

economy. However, the practice also carries

possible environmental and public health

risks, most notably water contamination.

A University of Minnesota research team

is addressing this challenge by developing

innovative biotechnology to purify fracking

wastewater. Headed by Larry Wackett, a pro-

fessor in the College of Biological Sciences,

the team includes Alptekin Aksan, professor

in the College of Science and Engineering,

and Michael Sadowsky, professor in the

College of Food, Agriculture and Natural

Resource Sciences.

The effort has earned a new $600,000

grant from the National Science Foundation’s

Partnerships for Innovation (NSF-PFI) pro-

gram, which pairs academic researchers with

companies to transfer academic knowledge to

the private sector and produce innovative tech-

nologies that benefit the public. This is the first

NSF-PFI grant awarded in Minnesota.

Wackett, Aksan and Sadowksy, as well as CBS

Dean Robert Elde, are co-investigators. Elde’s

role is to lead interaction between the

researchers and the companies. If the project is

successful, the team will be eligible for addi-

tional NSF funding.

The three scientists, all members of the

university’s BioTechnology Institute, are using

naturally-occurring bacteria embedded in

porous silica materials to biodegrade contam-

inants in fracking wastewater, a technology

they originally developed to remove agricul-

tural pesticides from soil and water. They now

have the ability to customize the technology to

degrade chemicals in water used for fracking.

Their goal is to make the water suitable for re-

use in fracking of other wells and significantly

reduce the amount of water used by industry.

The team will work with Tundra

Companies of White Bear Lake, Minn. on sili-

ca encapsulation technologies, and Luca

Technologies of Boulder, Colo. on a related

effort--using encapsulated microbes to recov-

er natural gas from depleted coal beds. Neither

company is involved in fracking. However,

they see a business opportunity in helping the

U.S. meet its energy needs domestically in an

environmentally responsible fashion. The uni-

versity’s role is to further develop a platform

technology that could be used by these and

other companies.

Evaporation and filtration, the current

frack water treatment methods, are expensive.

Moreover, they don’t eliminate chemicals; they

simply reduce them to a concentrated form.

Industrial scale evaporation and filtration are

energy intensive, and both methods leave

behind a chemical residue that presents a dis-

posal challenge.

The research team understands public

concerns about the environmental impact of

fracking, as well as industry concerns about

misinformation related to risks, Elde says. The

University of Minnesota has reached out to the

business community, via its large alumni net-

work, to work together on these issues. “The

University of Minnesota is not taking sides in

the fracking debate, but as a land-grant

research institution, it is uniquely positioned

to carry out necessary and beneficial research,”

Wackett says. “There are many efforts ongoing

to improve the treatment of water used in

fracking and we feel that biotechnology can

play a significant role in the overall effort.” PB

Scientists explorebiotechnology toclean up frack waterFederal grant will assist in development effortsBY UNIVERSITY OF MINNESOTA


|ENERGY|

Otter Tail Corp. is getting out of thewind indus-

try. The diversified energy producer

announced Sept. 6 a deal to sell DMI

Industries, its wind turbine manufacturing division, to

Texas-basedTrinity Industries Inc. for amere$20million.

The sale includes all property, plant and equipment at

DMI’s facilities inWest Fargo,N.D., Ft.Erie,Ontario, and

Tulsa,Okla.

Otter Tail will fill tower orders set for delivery

in 2012 before the sale to Trinity Industries is com-

plete. The sale is expected to close no later than Jan.

3. The transaction for DMI’s West Fargo plant,

which employs more than 700 workers, is scheduled

to be complete in November. Trinity Structural

Towers Inc., a subsidiary of Trinity Industries, cur-

rently operates wind tower manufacturing facilities

at two locations in Texas, as well as locations in

Illinois, Iowa and Mexico.

Otter Tail attributes its decision to exit the

Manufacturersregroup in face ofwind credit expirationUncertainty regarding the future of federalproduction tax credit affects local productionBY KRIS BEVILL

|ENERGY|


industry to the looming expiration of a federal

tax credit for wind turbine production. The

Production Tax Credit provides 2.2 cents per

kilowatt hour for the production of electricity

from wind turbines and was established in 1992

to help wind energy producers compete with

cheaper fossil fuel energy. The credit was meant

to provide assistance until the wind industry

matured and could compete on a level playing

field with other forms of energy. However, while

the industry is not quite there yet, the credit may

be allowed to end this year. According to Otter

Tail, uncertainty surrounding the credit’s future

has reduced demand for wind towers and signif-

icantly impacted the market value for DMI’s

assets, contributing to the company’s decision to

sell and refocus its efforts on utility growth.

“Our decision to divest DMI is consistent

with the course we’ve set to optimize our portfolio

of companies, reduce risk and create a more pre-

dictable earnings stream to support the dividend

and future growth,” Otter Tail President and CEO

JimMcIntyre said in a statement.

The entire wind industry strongly supports

Congressional action to establish a long-term tax

credit. Some manufacturers remain confident that

demand for turbines will continue without the

credit, just not fromU.S. producers.

Denmark-based LMWind Power is one of

those manufacturers. It employs approximately

630 people at its blade production facility in

Grand Forks, N.D., to produce approximately

1,800 blades annually, equating to 20 percent of

the company’s global production. Bill Burga,

head of manufacturing, Americas, for LMWind

Power, says he is “confident” blade manufactur-

ing will continue at the company’s U.S. plants,

although it is adjusting its capacity to reflect

anticipated demand changes. To date, most of

the demand for LM Wind Power’s products has

come from the U.S., Canada and Brazil, but

company officials expect destination markets

will shift elsewhere without the U.S. tax credit.

“In 2012, demand has focused on the U.S. mar-

ket due to the rush to finalize installations before

the end of the year because of the expiration of

the PTC,” Richard Pettifor, commercial director,

says.“In 2013, demand in the U.S. drops bymore

than 80 percent as the PTC expires and key mar-

kets for Grand Forks become export oriented—

Canada, Mexico, Panama, Brazil and Uruguay.”

One potential beneficiary of increased

exports from Grand Forks are the twin ports of

Duluth, Minn., and Superior, Wis., known col-

lectively as the Port of Duluth-Superior. LM

Wind Power has been utilizing the port to export

blades from the Grand Forks facility for several

years, according to Pettifor, who says Duluth’s

port is attractive because it is efficient and can be

less expensive than shipping to Houston. Blades

sent through the Port of Duluth-Superior reach

Brazil in just 16 days shipping time. PB

Kris Bevill



“In 2013, demand in the U.S.drops by more than 80 percent asthe PTC expires and key marketsfor Grand Forks become exportoriented—Canada, Mexico,Panama, Brazil and Uruguay.”

- Richard Pettifor,commercial director,

LM Wind Power




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