Nov 09, 2008 - 04:05:22 CST
Removing bottlenecks to getting North Dakota's energy surplus to market will require the state's best effort.TransCanada Corp. said last week it has enough contracts in hand to support the construction of a nearly 2,000-mile crude oil pipeline running south through eastern Montana, South Dakota, Nebraska, Kansas and Oklahoma, terminating in Texas. Better news would have had that pipeline, expected to be completed in 2012, running through western North Dakota, so batches of Bakken and other Williston Basin crude could catch a ride to new markets, reducing an estimated 10 percent competitive disadvantage.
Still, TransCanada earlier this fall said it would consider a pipeline spur, connecting western North Dakota oil production with the proposed Keystone XL pipeline in eastern Montana. The Canadian pipeline giant is not saying yes, not saying no.
North Dakota ought not play the waiting game.
North Dakota should to do its best to convince TransCanada that a pipeline connect with the Badlands would be good business.
Gov. John Hoeven has invested time and effort in the Interstate Oil and Gas Compact Commission. He was the IOGCC chairman in 2007, before stepping aside for Alaska Gov. Sarah Palin. That body meets in Santa Fe, N.M., later this month. Every state should be interested in getting North Dakota crude to market so that the nation can be more energy independent. Hoeven ought to find a sympathetic ear in New Mexico.
Meanwhile, the North Dakota Pipeline Authority would like to commission a study that would look at connecting with Keystone XL as a business proposition. Connecting to the TransCanada line could be done by another company. If built, Keystone XL will be regulated by the Federal Energy Regulatory Commission as a common carrier, and would have to accept the North Dakota crude from a third party.
The question is, does building that spur or connection make economic sense?
Before deciding to build Keystone XL, TransCanada made sure it had commitments for 380,000 barrels of oil a day for an average term of 17 years. Anyone building a spur across easternMontana would have the same kind of commitment, although smaller volume. Maybe a study will prove that possible and then the state could shop pipeline building to companies in the pipeline business.
Even without a spur, the construction of Keystone XL will increase the state's ability to get crude to market because the new line will take pressure off existing pipe.
One thing is for certain, North Dakota needs to keep the pipeline building and expansion process going forward.
Delbert Moore wrote on Nov 9, 2008 3:00 PM:
Comments are reviewed for taste, tone and language before posting.
Some comments may be used in the Tribune's print edition.
We value and respect your privacy, but The Bismarck Tribune might
disclose certain information to governmental entities if served with subpoena.