Increased pipeline capacity may help North Dakota oil producers avoid discounts as high as $30 a barrel when selling their crude, along with giving them more shipping options, two industry officials say.

New pipelines designed to bring Canadian oil to Midwestern refineries also may ease pressure on an important east-west pipeline that many North Dakota producers rely on to transport their oil, said Lynn Helms, director of North Dakota's Department of Mineral Resources.

The issue has drawn more attention as the state's oil production has risen, from about 100,000 barrels a day two years ago to more than 123,000 barrels.

Output has been buoyed by high prices and recent success in coaxing oil from the "middle Bakken" geologic formation in northwestern North Dakota.

Helms and Mark Makelky, director of the state's pipeline authority, discussed the state's distribution network for crude oil, gasoline and diesel fuel Wednesday at a meeting of the state Industrial Commission. The commission oversees the authority and the mineral resources agency.

In a seven-page analysis of North Dakota's crude oil transportation options, Makelky said the situation has improved from a year ago, when refinery shutdowns and competition for pipeline space meant North Dakota oil producers sometimes were paid much less than market prices for their crude.

The Enbridge pipeline, which runs across North Dakota's northern tier en route to a terminal in Clearbrook, Minn., expects to increase its capacity from 75,000 to 110,000 barrels per day by year's end, Makelky's report said. Enbridge recently announced plans to raise it still more, to 155,000 barrels daily.

Improvements to a separate pipeline, called the Belle Fourche line, will provide two pipeline shipping options for oil producers in North Dakota's southwestern corner.

"As pipeline capacity constraints work themselves out, we see the capacity bottleneck moving downstream" to refineries, Makelky said.

TransCanada Corp.'s Keystone pipeline, which is designed to ship 590,000 barrels of oil daily from Hardisty, Alberta, to Illinois and Oklahoma, and Enbridge's planned expansion of two lines that carry oil from Hardisty to Clearbrook, Minn., should open up space on North Dakota's pipeline network, Makelky said. Some of that oil, along with production from eastern Montana, now competes for North Dakota pipeline space, he said.

"For our regional interest, it's probably best to urge (new Canadian pipelines) to proceed as far south as possible to the refining centers in the Gulf Coast area, and kind of let us have our space around here," he said.

Makelky and Helms said the Pipeline Authority also would press for an expansion of the North Dakota network that carries gasoline, diesel fuel and other refined products.

Helms said areas of the state rely on only one pipeline supplier, which can leave them vulnerable to higher prices and fuel shortages.

"The goal … is to make sure that every barrel of crude oil has at least two markets that it can be sold into, and every terminal, every refinery in the region has two pipes that it can put its product into," Helms said. "That way, competition really works."

Reaching that goal will take at least five years, Helms predicted. Obtaining investors and permits for the pipelines takes time, and there is prodigious demand for steel pipe, he said.