News Releases for May 2006
May 15, 2006
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Hoeven Hosts Summit On Expanding Oil Pipeline Capacity In Western North Dakota
BISMARCK, N.D. – Gov. John Hoeven today hosted a summit with legislators, oil industry officials from both the U.S. and Canada, pipeline companies, producers and railroad officials to help address the challenge of increasing oil pipeline capacity in western North Dakota.
Joining Hoeven at the summit were North Dakota legislators; Kevin Cramer of the N.D. Public Service Commission; Lynn Helms, director of the N.D. Department of Mineral Resources; Ron Ness, executive director of the N.D. Petroleum Association; and Robert Harms, president of the Northern Alliance of Independent Producers. Presenting were representatives from the Tesoro Refinery, True Companies, Enbridge Pipeline, and the Dakota Missouri Valley & Western short-line railroad. County commissioners and auditors from McKenzie, Bowman, Golden Valley and Billings counties also participated.
“We’re producing more oil, and we need to be able to get it to market so our producers and mineral owners do not suffer unfair discounts,” Hoeven said. “We’re developing more pipeline capacity and taking other steps to solve the problem. More supply is also how we get the price down at the pump to help consumers.”
Some of the options Hoeven is working on or considering include:
- Enbridge Pipeline expansion.
- Transport crude by rail.
- Expand oil refining capacity.
- Increase the Quality Restriction on the Enbridge Pipeline in North Dakota.
- Access Keystone Pipeline Project.
- Create a Pipeline Transportation Authority.
There are currently 36 rigs in the state, and February oil production, the most recent figure available, was 104,000 barrels per day. Crude oil shipped from the Williston Basin in North Dakota and Montana has incurred discounts because of competition for pipeline space. Reduced capacity is attributed to an increase in production, combined with limited pipeline space and a temporary reduction in refinery capacity. In April, the pipeline system was about 15,000 barrels a day short of needed capacity in western North Dakota; currently, about 6,000 barrels a day are restricted by capacity.
Hoeven has already worked with industry officials to get an additional 30,000 barrels a day online within a year through an expansion of the Enbridge pipeline. He has also worked with other governors, agencies and organizations to help expand pipeline capacity. These include the following:
- Hoeven worked with other governors and the Interstate Oil and Gas Compact Commission (IOGCC) to establish a regional task force to analyze current discounting and to coordinate a multi-state approach to pipeline expansion.
- The Governor has urged the Federal Energy Regulatory Commission to expedite regulatory approval for pipeline enhancements in the multi-state region.
- Hoeven is working to enlist producers to sign up for new pipeline capacity, and thereby encourage new investment.
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