BAKKEN BREAKOUT WEEKLY
BAKKEN NEWS BISMARCK TRIBUNE EDITIORIAL Options evolving for oil in N.D. Market forces and increased oil production in
western North Dakota are combining to expand the state’s options for getting crude oil to out-of-state refi neries and begin petroleum refi ning within the state. With these options come opportunities for business in North Dakota, and to continue to diver- sify the state economy. Tulsa-based Oneok Partners LP announced it
would pursue a 1,300-mile crude oil pipeline from the oil fi elds of North Dakota to a hub in Oklahoma that distributes raw material to oil refi neries in that region. It would handle 200,000 barrels a day and cost between $1.5 and $1.8 billion to build. That brings to six the number of pipelines pro-
posed to link the state’s oil patch to processing centers closer to major U.S. markets. It means oil companies in the state will have better transportation choices. State oil production has increased well beyond any
existing pipeline capacity, forcing oil companies to develop rail shipping operations. Presently, a quarter of the nearly 550,000 barrels of oil produced each day in North Dakota is shipped out of state by rail. Crude oil produced in North Dakota pays a pen-
Refi nery, pipeline projects proposed
alty in price because of transportation costs between oil fi elds and refi ning operations. Shipping by pipe- line is considered the most effi cient and safest means of moving oil to market. Once in place, pipelines are expected to reduce, if not eliminate the penalties or discounts. The Keystone XL pipeline delayed by President
Barack Obama was to carry about 100,000 barrels of North Dakota crude a day, and the company has shippers committed beyond that capacity. Oneok’s Bakken Crude Express Pipeline has just begun to sign up suppliers.
The Oneok line, because it does not cross an in-
ternational border like the Keystone project, does not require State Department approval. Crude oil shipping options are being developed
for North Dakota, and that benefi ts everyone in the state. At the same time, three refi nery projects being
developed would produce diesel fuel. North Dakota, because of its farm economy, has always been a big consumer of diesel fuel, and it’s not unusual at plant- ing and harvest for state diesel suppliers to run short. In addition, the oil boom in western North Dakota, to a large extent, runs on diesel fuel that powers genera- tors and fuels trucks. Producing diesel in North Dakota would be an
important step forward. And, with three projects in development, it also promises to give the state choices when it comes to refi ning — choices mean competi- tion.
That’s a universal benefi t. The maturing of the oil industry in North Dakota
continues to give the state new options, which in- crease economic fl exibility for individuals, businesses and communities in the state. Eventually, it will give local interests more control
over development and the good and bad impacts of crude oil production in the state.
Thursday, April 19, 2012 ■ Page 13
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