BERTHOLD — In the world of cowboy cliches, it’s said the best cross-breed with cattle is an oil well.
In Berthold, the best cross-breed with oil is wheat.
The half farmer-owned Berthold Farmers Elevator, a modest grain house, is partnered with Enbridge, the biggest pipeline shipper in the Bakken.
It’s what Enbridge’s business developer Kelly Wilkins calls “the perfect story for North Dakota. We’re meeting the Berthold Farmers Elevator rail operation with our crude.”
Enbridge operates a major pipeline terminal right at the edge of Berthold, about 30 miles west of Minot on U.S. Highway 2.
Last year, when rain prevented planting and harvest, the elevator started looking for a sideline to improve its finances.
The result is a deal whereby Enbridge is greatly expanding the elevator’s BNSF Railway access and the elevator will hire a crew of
40 to load both grain trains and oil tanker trains.
The facility will be Enbridge’s first Bakken railroad load out, an increasingly lucrative means of getting oil moved to market.
Wilkins said oil shipped by train can go to end points that aren’t already glutted with pipeline oil, reducing the steep discounts traditionally associated with Bakken crude.
He tried taking visitors on a tour of the new railroad loop west of the elevator where Enbridge will bring in a small trunk off the main pipeline. A hard driving rain made it too messy on the construction site, but the scale of earthworks is impressive.
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When construction wraps up in January, unit trains of 100 cars will be loaded in a single day.
In the meantime, trains will loaded by truck starting in September. Wilkins said, like everyone else in the oil field, Enbridge is anxious to get those semis off the road.
Dan DeRouchey, elevator general manager, said the deal is good for the elevator because the elevator will be paid for every barrel of oil it loads on the unit trains.
He expects the deal will double the elevator’s net revenue to about $5 million annually. The elevator is a co-op, so farmers share the profits. Half the elevator is owned by Columba Grain, of Portland, Ore.
As if being in an area rich with oil development isn’t enough, DeRouchey said the wheat crop around Berthold in the Bakken’s northern tier is one of the best ever.
More producers are growing corn, too, and Friday’s welcome rain might mean an outstanding corn yield, he said.
There’s some truth to another cliche for Berthold: When it rains, it pours.
With the Berthold rail project, Enbridge will be capable of shipping 475,000 barrels of oil per day. That’s about two-thirds of all the oil produced in North Dakota.
Wilkins said Enbridge has plans to double its pipeline capacity with the proposed Sandpiper line paralleling the existing line to a distribution point in Clearbrook, Minn.
Public Service Commissioner Kevin Cramer said the state Legislature passed new rules that make it easier for pipelines to get projects sited within existing corridors.
“No one dreamed of anything this big,” Cramer said of the Sandpiper line. He called Enbridge the state’s “legacy pipeline — it’s grown and grown fast.”
The Canadian-based company expects to file a letter of intent with the PSC for the project in 2014.
Reach reporter Lauren Donovan at 220-5511 or firstname.lastname@example.org.