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AS I SEE IT

Posted 1/06/10 (Wed)

By Neal A. Shipman
Farmer Editor

By all accounts, North Dakota’s oil industry is poised for one of the best years ever in 2010 as more and more new oil wells are being planned to be drilled into the Bakken and Three Forks Sanish formations.
The continued expansion of the state’s oil industry is vital to North Dakota’s overall economy. Our robust energy sector has been the major factor in why North Dakota’s economy has pretty much been insulated from the recession being felt by the rest of the nation.
So any new developments in the oil patch that increase drilling activity or speed the process of getting the state’s crude oil into a pipeline or other means of transportation to the nation’s refineries is good news.
And last week, North Dakota oil producers got a real shot in the arm when two new systems went online that will help get the state’s oil into the system faster and reduce the discounted pricing that the state’s oil producers were paying to get their oil to market.
According to an Associated Press story, the first improvement was made by Enbridge Pipeline North Dakota LLC’s pipeline expansion project that will increase the shipping capacity of that pipeline by about 50,000 barrels a day.
The second major investment made by a private company to get North Dakota oil to market quickly was also made last week by EOG Resources Inc. of Houston, Texas as the company began rail shipment of oil from their new facility near Stanley to Stroud, Okla. where it will then be sent through a new 17-mile pipeline to a terminal in Cushing, Okla. EOG Resources Inc.’s loading facility will have the capacity to load 60,000 barrels of North Dakota oil onto one 100-car unit train each day.
And these two investments will have a significant impact on the capacity to get North Dakota’s oil to market. According to Lynn Helms, director of the state Department of Mineral Resources, the new pipeline expansion and the rail loading facility will increase the shipping capacity of North Dakota oil by about 110,000 barrels a day. And considering that North Dakota is currently producing about 250,000 barrels a day, these two improvements couldn’t have come at a better time.
A third major development that will go online shortly, according to the Associated Press story, was the announcement by Pecan Pipeline North Dakota Inc, a subsidiary of EOG Resources, that the company is planning for a mid-January completion of a $45 million pipeline that will feed North Dakota natural gas into an existing line that moves the gas to a Chicago hub.
Obviously, when you have major players in the oil and gas business making significant monetary investments not only to drill for the oil and gas, but also investing in getting the product to market, you know that the future of the state’s oil patch is very bright.