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THEIR OPINION: N.D. crude bottleneck is starting to open

BISMARCK -- Getting North Dakota energy production to market has been a problem for the petroleum industry, as well as producers of electricity, whether by coal-fired power plant or wind farm. Pipelines and transmission lines had been maxed out, ...

BISMARCK -- Getting North Dakota energy production to market has been a problem for the petroleum industry, as well as producers of electricity, whether by coal-fired power plant or wind farm. Pipelines and transmission lines had been maxed out, while production has continued to increase. All of that's starting to change.

The Enbridge Pipeline, running from northwestern North Dakota to Clearbrook, Minn., began operating at a 161,600 barrel per day capacity on Jan. 1. The company, which has Canadian links, had beefed up its 11 pumping stations, increasing the capacity of its pipeline by nearly 50 percent or 51,000 barrels per day. The improvements cost about $120 million.

EOG Resources Inc. of Houston shipped its first 100-car train made up of oil-tank cars from a new terminal near Stanley to a terminal at Cushing, Okla., on Jan. 4. The daily unit trains will carry about 60,000 barrels of crude oil.

North Dakota sweet crude sells for about 10 percent less a barrel on the New York Mercantile Exchange than crude from other areas primarily because of transportation issues. These two expansions in crude-oil shipping capacity should improve the price of North Dakota production by $3 to $4 per barrel, said Lynn Helms, director of the state Department of Mineral Resources.

In mid-January, EOG will finish a $45-million pipeline that will feed North Dakota natural gas into an existing line that moves gas to a Chicago hub.

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Minnkota Power Cooperative, which operates the Milton R. Young stations near Center, closed a deal recently with Minnesota Power of Duluth, which will lead to the construction of a new transmission line from Center to Grand Forks. The new line will be 250 miles in length. The deal also contemplates the development of a wind farm near Center. The proposed line, which if approved by regulators, could be completed by 2013. Estimates are it will cost $300 million.

Pipelines, transmission lines and rail terminals are all responses to market forces. The solutions have taken time and a great deal of capital.

The bottleneck that North Dakota has faced in exporting energy has begun to open. The means for getting crude oil to refineries and natural gas and electricity to urban markets has improve. That's a good thing for North Dakota's energy industries and the state's economic future, whether the source is traditional or alternative energy resources.

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