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Businessweek - ND Governor Urges Speedy, Safe Pipeline Building

News Article

Location: Bismarck, ND

By James Mac Pherson

Gov. Jack Dalrymple urged pipeline industry officials Thursday to quickly -- and safely -- expand North Dakota's pipeline network to keep pace with record production in the state's booming oil patch.

Increasing the number of pipelines in North Dakota would dramatically reduce truck traffic, curb natural gas flaring and create more markets for the state's oil and natural gas, Dalrymple told an audience or more than 100 industry and government officials at conference he organized in Bismarck.

"No single thing will do more to reduce human impacts of rapid oil development than pipelines," Dalrymple said. "Build more. … Do it as fast as you can."

But the governor cautioned companies to pursue the projects safely and correctly.

"You've got to handle this right," Dalrymple said. "One bad situation will create a lot of problems."

North Dakota, the nation's No. 2 oil producer behind Texas, is on pace to double its oil production by 2015 to more than 1 million barrels a day. About one-quarter of North Dakota's daily oil production is shipped by rail, and some by truck, due to the lack of pipeline capacity in the state, Justin Kringstad, director of the North Dakota Pipeline Authority, told The Associated Press.

The governor also addressed the natural gas being lost by the state's oil industry. More than one-third of the natural gas produced during oil drilling in North Dakota is burned off as a byproduct of the state's escalating oil production, state statistics show.

The amount of natural gas wasted daily could heat more than 2,300 homes in the state for a year, officials have said.

"Waste bothers North Dakotans," Dalrymple said. "It bothers me."

About $3 billion in infrastructure improvements are planned to process natural gas and move it to the market. Six major oil pipeline projects also are proposed to help move crude out of the rich Bakken and Three Forks formations in western North Dakota, Kringstad said.

Dalrymple said if all proposed projects are built, the expanded pipeline network would have the capacity to move about 1.5 million barrels to out-of-state markets daily.

The projects include TransCanada Corp.'s Keystone XL project, a controversial Canada-to-Texas pipeline that would carry Canadian tar sands oil and 100,000 barrels of crude daily from North Dakota and Montana.

Alex Pourbaix, TransCanada's president for energy and oil pipelines, told the AP that the company "is very, very confident this project is going to go," despite objections from environmental groups and others.

"Pipelines are much, much safer than rail and incredibly safer than trucks," he said.

"If you don't like flaring, you have to like pipelines," said Gene Veeder, a rancher and executive director of McKenzie County Job Development Authority. "If you don't like trucks, you have to like pipelines."

Veeder, 56, said an oil pipeline has been on his family's ranch in western North Dakota for as long as he can remember. Veeder said five more pipelines are being built near the ranch.

He said pipeline companies must deal with landowners fairly and that the projects need to be built with safety in mind.

"If you have one bad player, it trips over to all of you," Veeder said.

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