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N. Dakota oil pipeline capacity limited as production, imports climb

Oil & Gas Journal

The subcommittee's chairman, Byron L. Dorgan (D-ND), said that he convened the hearing because he wanted to determine what steps will need to be taken to transport and refine the increasing amount of crude being produced from the Bakken Shale formation in western North Dakota.

"With the current infrastructure, it is a challenge to transport the oil from wellhead to refineries, both in and out of state, without experiencing a bottleneck. As this new oil is produced, we need to make sure the transportation infrastructure exists so that future oil production is not limited," he said.

Already increasing
Williston Basin oil production within the state and imports from Canada already put pressure on pipeline capacity, Kelliher said. North Dakota's oil production rose from 125,000 b/d in 2007 to 147,000 b/d in March, he noted. Existing pipelines are operating at full capacity, requiring that they apportion that capacity among shippers, he said.

Meanwhile, crude oil imports from Canada also have risen, according to Kelliher. Annual Alberta Basin oil production levels for 2007 published by the province's conservation board showed a 3% increase from 2006 to 1.86 million b/d, he said. "Significantly, Canadian imports are projected to reach 3.4 million b/d by 2017," he indicated.