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In North Dakota, getting oil and gas out of the ground is the easy part.
Getting it out of the state is where things get tricky.
North Dakota Gov. Jack Dalrymple hosted a summit Thursday morning to discuss one of the state’s most pressing questions: how to move hundreds of thousand of barrels of crude from its oil fields every single day?
The state’s pipeline network, like so much of its infrastructure, has been overwhelmed by the recent oil and gas boom. That’s pushed oil onto trucks, which has led to a big increase in traffic and wear and tear on roadways. Natural gas, meanwhile, is commonly being burned off due to lack of pipeline access.
(Popular Mechanics had a good visual guide the other day on how oil gets out of North Dakota.)
Dalrymple said he supports plans to expand the state’s pipeline network, which will reduce truck traffic and gas flaring and better connect the state to markets in the south and east.
“We continue to expand our pipeline capacity so that we can significantly reduce truck traffic on our roads, reduce flaring, other impacts and at the same time expand our market opportunities,” Dalrymple said.
About 100 people attended the pipeline summit, and more watched online via webcast.
Six proposed pipelines, along with expansion of existing ones, are forecasted to increase the state’s pipeline export capacity from 413,00 barrels per day in 2011 to more than 1.5 million barrels per day in 2015. It’s also planning a major upgrade of rail shipping infrastructure that could boost export capacity well beyond 2 million barrels per day.
In total, the investment between 2011 and 2013 will exceed $3 billion in the state.
“I think it will catch up,” says Tony Straquadine, manager of government affairs for Alliance Pipeline, which is proposing a 79-mile pipeline from the Williston Basin to its mainline that runs to Chicago.
“These things never match up perfectly,” he said. One reason: “Most pipeline companies do not build pipelines on a speculative basis.”
Part of Thursday’s event was a refresher course for pipeline developers on landowner relations. It’s been a few decades since the state saw a significant expansion of its pipeline network.
Justin Kringstad, director of the North Dakota Pipeline Authority, said even after the local bottlenecks are fixed, there are more potential challenges to be addressed. The pipeline system is set up to deliver oil from North Dakota to the Great Lakes region, where there is congestion and oversupply. The state is strategizing ways to move exports by rail or alternative pipelines to other parts of the continent.
They’re issues that won’t be going away anytime soon.
“We know that crude oil and natural gas production are going to continue to grow for the next number of years,” Kringstad said. “We are just at the beginning right now.”