BISMARCK--The amount of North Dakota crude oil and natural gas that can be shipped to market has leaped in recent months and continues to improve, Gov. John Hoeven and energy industry officials said Tuesday.
"This is huge capital investment," Hoeven said of the improvements.
Major progress comes because pipeline operators have been expanding capacity of their lines, because new railroad tanker car loading facilities have been built, and gas processing plants have been built and expanded, they said.
The new facilities and improvements are vital because North Dakota's crude oil production continues to grow with no end in sight. State Director of Mineral Resources Lynn Helms and other industry officials said the state's daily production has been growing by 6,000 barrels a day per month.
With the recent improvements marketing infrastructure, Helms said, "For the most part, our crude is moving just fine."
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Hoeven's opponent in this year's governor's race said Hoeven still is doing "too little, too late."
Sen. Tim Mathern, D-Fargo, said the governor isn't showing leadership on the issue, just "fancy charts" at Tuesday's news conference.
Past shortages
North Dakota oil producers have been hurt in the past by shortage of pipeline capacity.
About three years ago, some, particularly in the Bowman County area, were suffering from price discounts because there was a lack of capacity in pipelines. They were forced to sell at $15 per barrel or more below the going rate and truck their product to a pipeline terminal south of Williston.
Mathern said Tuesday that between 2005 and 2007, the state lost $19 million in oil tax revenue because of oil sold at discounted prices.
But two major pipelines that carry North Dakota crude, Enbridge and Butte, have made improvements that boosted their combined capacity from 172,000 barrels per day last year to 214,000 barrels per day now, with more improvements planned, Hoeven and pipeline officials said Tuesday.
And between August and December this year, rail tank car loading facilities in Minot, southwest of Williston, N.D., and near Columbus, N.D., and Ryder, N.D., will have begun shipping 55,000 barrels per day. Very little is being trucked anymore, Helms said.
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Natural gas
Since 2006, natural gas produced in association with crude oil in the state also has been addressed.
Four new processing plants have been built, and three existing ones have been expanded, boosting marketable production 126 percent since 2006.
If a pipeline system and processing plants aren't available to take oil wells' gas, it is burned at the well -- "flared off" -- wasting tremendous amounts of a valuable commodity.
But, Mathern, said, "The bottom line is that our state still lacks the pipeline infrastructure to enjoy a future as an energy exporting state.
Helms and Hoeven didn't call Tuesday's news conference to roll out a "mission accomplished" banner.
Helms said it was to explain the significant progress made.
"There's a lot of work to be done between now and 2011," Helms said after the event, "and we can't take our eye off the ball."
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He said the reason his testimony at a U.S. Senate hearing just a few weeks ago sounded more pessimistic than his remarks Tuesday is that some of the newest transportation improvements had not yet come on line then.
Companies represented at Hoeven's Tuesday event outlined what more they are planning in the coming months and years.
Enbridge's North Dakota manager, Kevin Hatfield, said the company is working on boosting the capacity of its line, which roughly follows U.S. Highway 2 across the state to a Clearbook, Minn., hub, from the current 110,000 barrels per day to 161,000 barrels per day by 2010.
Cole writes for Forum Communications Co., which owns the Herald.
