ENERGY: Moving oil to market

BISMARCK, N.D. — By the end of 2012, it is estimated that 700,000 barrels of oil per day will be produced in the Bakken formation in western North Dakota. By 2019, that number is expected to increase to 1.1 million barrels of oil per day. The export capacity of all pipelines and rail facilities would reach about 1.8 million barrels per day if everything that is being proposed is built, says Kevin Cramer, public service commissioner.

Since Enbridge Pipelines LLC acquired its North Dakota system in 1996 it has invested more than $1 billion in new projects and infrastructure. Through enhancements, the North Dakota system has expanded from 80,000 barrels per day in 1996 to 275,000 barrels per day in 2011.

“With the future growth plan on the Enbridge system, the Bakken producers will have access to more refining markets; and more refineries in the United States will have access to high-quality, domestically produced Bakken crude oil, which can mean less reliance on expensive foreign crude oil shipped into the U.S. from other parts of the world,” says Mark Sitek, vice president, major projects execution for Enbridge.

Construction on Enbridge’s Bakken expansion project is expected to be completed in January, allowing the shipment of another 120,000 barrels per day out of the oilfield. After all the expansions are completed, Enbridge’s total pipeline capacity will be 475,000 barrels per day by January 2013.

Enbridge expects to complete construction of a rail facility in Berthold, N.D., by January, which would enable them to transport another 80,000 barrels per day

Enbridge continues working with its shipper to find additional transportation options. Future project plans that are currently in development, could add an additional 300,000 barrels per day by the end of 2015.

Enbridge has one of six oil pipeline projects at different stages of development that pass through North Dakota. They include Oneok Partners, High Prairie Pipeline, Butte Pipe Line, Keystone XL, Enbridge Sandpiper and a Baker, Mont., to Billings, Mont., project proposed by Plains All American Pipeline.

“All five with the exception of Keystone XL are working with the industry to get commitments,” says Justin Kringstad, director of the North Dakota Pipeline Authority. “Pipeline projects can’t move forward unless they have adequate commitment terms. Keystone XL has commitments to move forward, but now is in the regulatory process.”

The state’s Public Service Commission regulates oil pipelines. This includes handling applications for corridor certificates and route permits and ensuring efficient use of resources and continued system reliability.

Cramer says pipelines are the most economical, efficient and safe way to move petroleum products to market. Pipelines also relieve traffic on roads.

“We work hard to keep the regulatory lag short for pipelines. The biggest factor is becoming the landowner. As landowners grow more fatigued by the frantic pace of development, it is getting harder for companies to get signed easements,” he says. “In western North Dakota, we almost never have landowners oppose pipelines. Our hearings are generally very uneventful in terms of landowner issues. The companies do a good job of preparing their cases.”

Tags: energy