More than $3 billion in private money is committed to building North Dakota’s natural gas infrastructure, including building pipelines, such as this 10-inch line near Watford City.
Matthew Staver, Bloomberg News
A pipeline crew worked on a 10-inch gas pipeline outside Watford City, N.D., late last fall. Much of the gas now is being burned off at many wells, but state officials want it piped.
Matthew Staver , Bloomberg News
North Dakota is hoping to get oil into pipes, out of trucks
- Article by: DAVID SHAFFER
- Star Tribune
- June 14, 2012 - 11:26 PM
Now that oil is gushing in North Dakota, state officials are hoping for another boom -- in pipelines.
North Dakota has surpassed Alaska to become the nation's No. 2 oil-producing state behind Texas. It has more than 6,000 producing wells, pumping out 600,000 barrels per day, a fourfold increase in five years.
But the pipeline capacity hasn't kept up. Three-fourths of the state's crude oil now must be trucked from wellheads, clogging local roads. And natural gas is burned off, or flared, at one of every five wells because of the lack of pipelines.
"You can't go too fast getting the gathering systems built, getting the pipelines hooked together and getting them operational," Gov. Jack Dalrymple told pipeline company executives Thursday at a webcast "Pipeline Summit" he hosted in Bismarck.
"No single thing I can think of ... can do more to reduce the human impacts of rapid oil development than pipelines," the governor added.
He also encouraged pipeline companies to quickly expand natural gas pipelines because North Dakotans don't like to see it squandered. "They see a flare, and they see waste," the governor said.
State officials acknowledge there has been steady progress, with billions of dollars invested in pipeline projects coming online this year and in early 2013.
Oil wells can jam up local roads with crude-carrying trucks. A six-inch pipeline linking the well to a major pipeline or rail terminal eliminates 70 trucks a day, said Niles Hushka, CEO of Kadrmas, Lee & Jackson, an engineering, surveying and consulting firm based in Bismarck.
"If you don't like truck traffic, you have to lay pipelines," added Gene Veeder, economic development director of McKenzie County, one of the centers of oil exploration in the western part of the state.
Getting it from here to there
Eight pipeline companies, including Enbridge Energy, the nation's largest crude oil pipeline operator (which also has a major presence in Minnesota), described an array of projects in the works to process and ship crude oil and natural gas from North Dakota -- much of it through Minnesota.
One large project, called Sandpiper, described by Mike Moeller, director of Enbridge's North Dakota operations, would ship Bakken oil into a terminal at Clearbrook, Minn., 90 miles east of Grand Forks, and then pipe it on to Superior, Wis., where it would connect to other pipelines heading east and south.
Moeller said Enbridge is prepared to expand the congested Clearbrook-to-Superior line -- part of the company's main pipeline route from Canada -- to handle crude from North Dakota. Enbridge also has reversed the flow of three pipelines to the Gulf Coast and into Canada, allowing North Dakota's light crude to be shipped and marketed to refineries in Canada and along the Gulf.
High Prairie Pipeline, which operates about 250 miles of pipelines in North Dakota, is planning a $650 million pipeline to move Bakken oil to Clearbrook. The company has been unable to strike a deal to link with Enbridge's main line and recently launched a legal battle to force the company to allow it.
Yet another proposed pipeline costing up to $1.8 billion would transport Bakken crude 1,300 miles south to Cushing, Okla., another major terminal. The builder, OneOk, also plans a separate line that would be the first out of the Bakken field dedicated to carrying the valuable liquid components stripped out of natural gas.
"Obviously, it's a good time to be in the pipeline business in North Dakota," said Barry Haugen, chief operating officer of WBI Energy, which is working on several gas and oil projects, including a diesel-production venture in North Dakota.
One controversial pipeline, Keystone XL planned by TransCanada through Nebraska and other states to the Gulf Coast, would carry some Bakken crude and would free up capacity on an existing Keystone line through North Dakota to carry more, said Alex Pourbaix, president of TransCanada energy and oil pipelines.
Keystone XL was held up last year by the Obama administration over environmental concerns. It is designed mainly to carry Canadian tar sand crude oil.
More than $3 billion in private investment is committed to North Dakota's natural gas infrastructure, including natural gas processing plants and connecting pipelines such as the proposed 80-mile Tioga project planned by Alliance Pipeline near Sherwood, N.D.
"It will move that gas to market and reduce the flaring situation," said Mike McGonagill, the company's chief operating officer.
David Shaffer • 612-673-7090
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