ND regulators approve route for oil pipeline that will be biggest from Bakken

InForum ^ | Jan 20, 2016 | Mike Nowatzki

[thackney]

orth Dakota regulators granted a route permit Wednesday for what will be the largest crude oil pipeline out of the state's fruitful Bakken oil field, leaving Iowa as the only state left to approve the $3.8 billion Dakota Access Pipeline.

Public Service Commission members Julie Fedorchak and Brian Kalk voted to grant the permit for Dakota Access LLC, a subsidiary of Dallas-based Energy Transfer Partners, which plans initially to ship up to 450,000 barrels of oil per day on the 1,168-mile pipeline from the Bakken and Three Forks regions in western North Dakota.

"This is a massive infrastructure construction project, and it's really extremely important to the long-term future of North Dakota's oil industry," said Fedorchak, who chairs the commission.

Commissioner Randy Christmann abstained from voting, having recused himself from discussions on the pipeline last week after learning that the revised route will cross his mother-in-law's property and that she's negotiating an easement with Dakota Access.

Dakota Access also has obtained permits from regulators in Illinois and South Dakota. The Iowa Utilities Board is expected to decide in February on the request.

With a maximum capacity of 570,000 barrels per day, the mostly 30-inch pipeline will start near Stanley and cross South Dakota and Iowa on its way to Patoka, Ill., where crude will be shipped to Midwest and Gulf Coast refineries. The North Dakota leg will stretch 358 miles and account for $1.4 billion of the cost.

The company - which has already staged pipe along the route - anticipates starting construction this quarter and having the pipeline in service by the fourth quarter of 2016, depending on regulatory approvals, spokeswoman Lisa Dillinger said via email.

Fedorchak said the pipeline will provide a safer alternative to moving oil by train or truck. About 41 percent of oil produced in the Williston Basin, or 520,000 barrels per day, was shipped by rail in November, down from a high of about 60 percent in late 2014, according to the state Pipeline Authority.

Energy Transfer Partners issued a statement saying it was pleased with the PSC's decision and hopes to achieve a similar outcome in Iowa.

"Dakota Access Pipeline is an important energy infrastructure project that will provide a more direct, cost-effective, and safer manner to transport the currently constrained supply of light sweet crude oil out of the production areas in North Dakota to refining markets around the country," it said.

The PSC conducted an "exhaustive" review of the project and addressed concerns about reclamation and routing, Fedorchak said, noting there were more than 17 reroutes, many at the request of landowners.

Kalk said approving the pipeline route was "the right decision" to keep improving the nation's transportation system for commodities.

Still, the project hasn't been without controversy. Some landowners complained early on about the company using strong-arm tactics, and one property owner in Iowa alleged that an agent offered to pay for a prostitute to entice him to allow for pipeline right-of-way.

Dillinger said Dakota Access has secured voluntary easement agreements on 85 percent of properties along the four-state route, including 92 percent in South Dakota, 78 percent in Iowa, 86 percent in Illinois and 88 percent in North Dakota - though PSC officials said the North Dakota figure is up to 95 percent, which Fedorchak said "indicates that a vast majority of the landowners that the company's working with are satisfied that their needs are being met by this project."

Bismarck attorney Derrick Braaten is representing 35 to 40 landowners who represent about 10 percent of the mainline route in North Dakota. There was initially frustration from individual landowners when dealing with Dakota Access and its agents, but after landowners banded together, it was "a much more amicable negotiation, and I think our members are happy with the result," he said.

"Within the next few weeks we should have most of our members signed," he said.

Half a dozen union workers in the audience broke into applause after the vote. Steve Cortina, representative for the Local 563 Laborers Union, which has about 11,000 members in North Dakota and Minnesota, said the pipeline is expected to create 300 to 500 construction jobs in North Dakota and will allow workers finishing other pipeline projects to remain in the state.

"It's a huge boost," he said.

Dakota Access still needs U.S. Army Corps of Engineers approval for those two Missouri River crossings, where the pipe will be bored 35 feet and 64 feet under the riverbed. The pipeline will cross waterways seven times in all and remove about 37 acres of land from agricultural production, primarily because of six tank terminals.

A control center in Houston will continuously monitor the pipeline and be able to remotely shut valves in the event of an emergency, Fedorchak said.

She noted Dakota Access will pay an estimated $40 million in state sales tax, $1.7 million in local sales tax, $1.5 million in state income tax and $13.4 million annually in local property taxes.

[thackney]

http://www.daplpipelinefacts.com/

The Dakota Access Pipeline Project is a new approximate 1,134-mile, 30-inch diameter pipeline that will connect the rapidly expanding Bakken and Three Forks production areas in North Dakota to Patoka, Illinois.

It will transport approximately 450,000 barrels per day with a capacity as high as 570,000 barrels per day or more – which could represent approximately half of Bakken current daily crude oil production. Shippers will be able to access multiple markets, including Midwest and East Coast markets as well as the Gulf Coast via the Nederland, Texas crude oil terminal facility of Sunoco Logistics Partners.

[thackney]

Maps to specific location in counties.

http://www.daplpipelinefacts.com/resources/project-maps.html

[Moonman62]

So this gets approved but Keystone doesn’t. There must be more to Keystone than what is being told.

[Cletus.D.Yokel]

SO, is Patoka, IL a refinery, tank-farm or an interconnect hub?

If a hub, where does the crude go from there (along existing lines)?

[thackney]

The Keystone XL pipeline crosses the US border and requires approval from the State Department. It would move mostly oil from Canada.

[thackney]

http://www.pipeline101.com/where-are-pipelines-located

Fairly significant interconnect point. I’m sure there are multiple regional tank-farms due to that.

Much more detail available at:

http://www.eia.gov/state/maps.cfm?v=Petroleum

Refineries connected by pipeline East, West and to farther away locations.

[thackney]

Found a map with Refinery capacities listed, reasonably up to date.

[central_va]

Unrelated but do you know why I am paying $0.45 more per gallon for 93 octane? That is a pretty big spread historically, usually it is much smaller difference may 15-20 cents.

[thackney]

Increased demand.

Premium gasoline remains a small volume of the overall US gasoline market. Sales through the first five months of the year, the most recent period available, were 10.8pc of total US gasoline supplied, according to the Energy Information Administration (EIA). Demand for premium gasoline remains well below highs seen in the early 2000s.

But premium gasoline demand through that period was 12.2pc higher than the same months of 2014 and 14.5pc higher than the ten-year average for the period, according to the EIA. Regular gasoline demand, by comparison, was 3.2pc higher than year-ago volumes and just 0.2pc more than the ten-year average.

http://www.argusmedia.com/pages/NewsBody.aspx?id=1080960&menu=yes

Which surprises me. I would expect more people to quit accepting vehicles that require more expensive fuel without greater mpg.

[vette6387]

“There must be more to Keystone than what is being told.”

There is, his name is Warren Buffett. Ole Warren owns the railroad that currently hauls the oil that would run in the Keystone Pipeline. Warren is a capitalistic communist!

[thackney]

Actually, Buffettt’s BNSF Railway Company has far more competition with this pipeline, the Dakota Access, than the Keystone XL.

https://www.bnsf.com/customers/oil-gas/interactive-map/pdfs/BNSF-OG-Overview-Map.pdf

http://www.bnsf.com/customers/oil-gas/

[Moonman62]

I’m thinking that American oil drillers would be opposed to it.

[thackney]

Why would drillers be opposed to more take away capacity in North Dakota? It has been under a pipeline bottleneck for year.

Because of that, they get fewer dollars for their oil. This will help, not hurt the oil producers.

[SVTCobra03]

I would expect more people to quit accepting vehicles that require more expensive fuel without greater mpg.

If you love to drive cars like the Shelby GT500, Camaro ZL1 or Challenger Hellcat, then the price of fuel is irrelevant.

[Moonman62]

My statement was concerning Keystone.

[thackney]

And that was my point.

Warren Buffet's railroad is not in Canada, where most of the Keystone XL pipeline brings in its oil. The Keystone XL doesn't even enter North Dakota.

This pipeline, Dakota Access, directly competes with BNSF rail loading of oil in North Dakota.

[EternalVigilance]

It will go through my county, maybe eight miles or so from my house.

[albertabound]

y’think..possibly big campaign contributions to Obie from the oil companies with substantial mid-east holdings that would lose market share to Cdn. oil...

[PAR35]

Keystone was to cross an international border, giving Obama additional leverage that he doesn’t have for this one. He can still try to stall the CoE approvals.

[doldrumsforgop]

“y’think..possibly big campaign contributions to Obie from the oil companies with substantial mid-east holdings that would lose market share to Cdn. oil...”

Any of those companies you refer to would most likely be state-controlled entities that would have appreciable amounts of ME oil so as to block a Canadian-based oil pipeline.

IN other words, not likely that is happening.