North Dakota oil refining study to kick off in January

A $450,000 study on whether or not the state needs an additional oil refinery is scheduled to begin in January and officials say an additional refinery could boost oil income throughout the state.

Funding for the study was secured by Sen. Byron Dorgan, D-N.D., through a U.S. Department of Energy grant.

With that funding, an industry-led advisory board and a steering committee were formed, which are comprised of members from various agencies, including industry experts, and is a bi-partisan group of contributors.

The steering committee is co-chaired by state Sen. Rich Wardner, R-Dickinson, and state Rep. Kenton Onstad, D-Parshall.

A refinery in Mandan can handle about 50,000 barrels of oil a day, but Dorgan said he feels there needs to be more refining.

“The fuel shortages we’ve seen demonstrate North Dakota needs more refining capacity,” Dorgan said. “The Tesoro refinery in Mandan is a great refinery, and I’ve encouraged them to expand. However, more refining is needed. I think this study will provide a lot of interesting information on how and under what conditions we might be able to get some additional refining capacity in North Dakota, which we really need.”

Dorgan said an additional refinery could help with future oil prospects.

“We’re going to produce a lot of oil and it would be great if we could have more value added to that by refining in North Dakota and shipping the refined product off,” Dorgan said.

The study, which will be done in two parts, is set to begin in January and results are expected at the end of June. It will examine the costs and benefits associated with the expansion of refining capacity in the region, said state Rep. Shirley Meyer, D-Dickinson, who is a member of the advisory board for the study.

“They are going to be doing this study and their focus will be on a 100,000-barrel-a-day refinery,” Meyer said. “Unless and/or they can prove a larger, or smaller for that matter, refinery would be a better fit.”

A firm to conduct the study has not been chosen, she said.

The first portion of the study will examine whether or not a refinery is feasible. If it’s determined feasible, the second half will examine other factors, such as water usage, pipeline capacity and location, Meyer said.

The final report will be delivered to the DOE.

Meyer said the North Dakota Association of Rural Electric Cooperatives will be administrating the study.

Adding more value to the state’s crude oil is important, she said.

“We see such big discounts on our oil, it just shouldn’t be happening,” Meyer said. “That’s what we’re trying to correct here. We want to get rid of these huge discounts. Every barrel of our oil is discounted and it shouldn’t be. It’s premium oil and we should be paid a premium price for it, and that’s what we’re trying to accomplish.”

Meyer said she’s confident in what the study will show.

“There’s no doubt in my mind that this study will show that we have the oil that we need for a refinery to continue and that it will be very beneficial for North Dakota and the United States,” she said.

Tags: dickinson nd, oil, refinery, daily updates