North Dakota’s pipeline summit addresses pipeline system growth

Governor Jack Dalrymple urged industry and government officials yesterday to build more pipelines to keep pace with the breakneck speed of North Dakota’s oil production.

Increasing the number of pipelines will reduce truck traffic, curb natural gas flaring and create more markets for the state’s oil and gas, Dalrymple told about 200 people gathered for a conference he organised in Bismarck about the future of pipelines in North Dakota.

The state has 17 500 miles of oil and gas pipelines, and is adding about 2500 miles of pipelines annually. The state is the nation’s second biggest oil producer, behind Texas. It produces approximately 1 million bpd, with 70% of it currently being moved by rail.

The summit

State leaders, energy companies and regulators discussed a wide range of issues from the need to reclaim land, as well as the importance of a relationship between a pipeline company and a landowner.

"In the last two years we have essentially more than doubled our pipeline capacity in a short period of time and now as we look ahead, especially after today we see the opportunity to increase another 50% over where we are today," said Gov. Dalrymple.

Democratic Agriculture Commissioner candidate Ryan Taylor and Public Service Commissioner candidates Tyler Axness and Todd Reisenauer, released a statement on the summit, saying that more oversight is needed.

Dalrymple said rail movement is important, but pipelines are essential. “We know over the long haul that pipelines are the safest, most efficient way to go,” the Republican governor said.

North Dakota’s pipeline capacity

North Dakota’s pipeline capacity has more than doubled since 2010, to about 783 000 bpd, Dalrymple said. Pipeline and refinery projects that are proposed for completion by late 2016 would double the current takeaway capacity, he said.

Houston-based Enterprise Products Partners LP unveiled one of the proposed projects at the conference on Tuesday: a 1200- mile pipeline from Stanley, in northwest North Dakota, to Cushing, Okla., the major crude hub where most US shipments are sent.

Pipeline projects

Kringstad, the North Dakota Pipeline Authority official, said there are currently about US$ 9.5 billion in pipeline projects in North Dakota, including US$ 6 billion dedicated to capturing natural gas and moving it to market.

North Dakota drillers currently burn off, or flare, about 30% of the gas because development of pipelines and processing facilities to capture it hasn’t kept pace with oil drilling.

New regulations became effective this month that require oil companies to submit a gas capturing plan with their drilling permits in an attempt to cut down the amount of natural gas that is burned off and wasted as a byproduct of oil production.

A group representing hundreds of companies working in North Dakota’s oil patch has told state regulators that it expects the industry to be capturing 85% of the gas by 2016, and 90% within six years, as more pipelines and processing facilities are built.

“We will reduce flaring in North Dakota,” Dalrymple told those gathered at Bismarck State College’s National Energy Center of Excellence. “It’s just that simple.”

Edited from various sources by Elizabeth Corner

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