N. Dakota gives OK to crude-oil pipeline By The Associated Press
BISMARCK, N.D. - North Dakota regulators have approved construction of a new McKenzie County oil pipeline to give producers more space to ship their crude east.
The 8-inch pipeline will run for 32 miles from the county's southwestern corner to Enbridge Pipelines North Dakota LLC's facilities near Alexander, where it will hook into Enbridge's network, the state Public Service Commission said. The main Enbridge line carries crude to Clearbrook, Minn.
Belle Fourche Pipeline Co., which is part of the True Cos. of Casper, Wyo., is building the line alongside a separate 6-inch line that it owns. The new line will be capable of delivering about 20,000 barrels of crude daily, along with the present pipeline's capacity of 10,000 barrels.
Until recently, most production from southwestern North Dakota was shipped south to a transfer point at Guernsey, Wyo. Public Service Commissioner Tony Clark said there was more oil than pipeline space, which caused producers to compete against each other for shipping rights. As a result, they got as much as $25 less per barrel than the normal market price for their oil, he said.
"Producers bid against each other for the right to get on the pipeline, and the amount that they receive for their oil is significantly reduced," Clark said. "Somebody gets that (price difference) somewhere along the way, but it is not North Dakota producers."
The commission's order says truck deliveries of the oil that the new pipeline will carry would need 95 tankers traveling 270 miles round trip each day of the year.
The pipeline approval process has been uneventful, in contrast to debate about where to locate the proposed new Keystone oil pipeline in eastern North Dakota, which is intended to carry Canadian crude to Oklahoma and Illinois.
The commission's president, Susan Wefald, said the Belle Fourche project parallels an existing pipeline, and is in a region where residents are used to oil development. The Keystone pipeline is much larger, with a carrying capacity of at least 435,000 barrels daily.