The process of getting Bakken crude oil from North Dakota to refineries in Oklahoma has improved, but getting full value for this state’s resources remains a challenge. The good news last week came in the form of a proposed 462-mile pipeline from southwest of Williston to Guernsey, Wyo., where it would flow into the Pony Express Pipeline that makes its way to Cushing, Okla.
The 12-inch pipeline has an estimated $300 million price tag, an initial capacity of 50,000 barrels a day and could be completed by August 2014. The capacity could eventually be doubled.
A representative of Hiland Crude, a subsidiary of Oklahoma-based Hiland Partners and the company behind the Double H Pipeline, was in Wyoming last week speaking to the Converse County Commission in Douglas about a proposed route for the pipeline. The company continues to negotiate with landowners along the route.
Turning a proposed pipeline into reality faces enormous hurdles. The route crosses parts of several states and will need to meet siting requirements from each. In addition, it appears the pipeline will have to cross the Yellowstone River, which has already experienced a high-profile ruptured pipeline.
Pipelines remain the safest, most efficient way to transport crude oil for long distances. It’s likely North Dakota’s oil future will depend upon a bundle of pipelines, rail connections and long-haul trucking firms to succeed.
The proposed pipeline will begin at Dore, a small community and energy hub on the Montana-North Dakota border. Guernsey is almost due south. Most of the country in between is dry, short-grass prairie.
The Double H Pipeline, at full capacity, would move as much Bakken crude as the Keystone XL pipeline. Most of that controversial Canadian pipeline will be dedicated to lower grade tar sands oil. The Guernsey-to-Cushing stage is already in development and also is expected to be completed next year.
If the Double H Pipeline is completed, it will give North Dakota oil producers a better option for getting crude to the Oklahoma area. Right now, North Dakota oil is moving by rail to refineries in the west and east, as far away as Washington and Pennsylvania. Existing oil pipelines are at capacity. In the future, there will be local value-added options — refineries at Dickinson and near New Town.