North Dakota's Public Service Commission has granted permits allowing an existing oil pipeline in McKenzie County to operate as a transmission line after its owner converted it from a gathering line without first obtaining approval from state regulators.
The 20-mile line operated by Belle Fourche Pipeline Co. became a transmission line after the company built a different pipeline in 2017 that connects to a common facility. The project led to changes in pressure and storage, causing the 20-mile line to fall under PSC jurisdiction.
The commission regulates transmission pipelines, which tend to be larger than the gathering lines that collect oil from well sites. Transmission pipelines often carry oil from gathering systems to facilities such as refineries.
“They should have acted in a more timely manner and actually gone through that regulatory process before the conversion occurred in the field,” Commissioner Julie Fedorchak said at Wednesday’s PSC meeting, where all three commissioners voted to grant the permits.
She said commission staff will likely continue conversations with Belle Fourche, which is a subsidiary of Wyoming-based True Companies, to further inquire about why the company did not first seek approval before the conversion took place. The company has a history of spills in North Dakota, including a major one in 2016 that affected a tributary of the Little Missouri River.
A spokesman for Bridger Pipeline, another subsidiary of True Companies, said the company wants to comply with all regulations.
“There was some confusion on our part on whether or not the conversion needed to happen,” spokesman Bill Salvin said. “Upon review, we realized we did in fact need to convert the line.”
Fedorchak said the commission tries to approach situations like this by bringing companies into compliance, but additional sanctions such as a penalty could follow.
“We want to make sure there’s a deterrent to companies doing this,” she said. “They need to take it seriously that this is what the law requires.”
The conversion did not require any new construction.
The line, however, must comply with PSC rules for transmission pipelines, including a requirement that they be placed farther than 500 feet from a residence. The Belle Fourche line is too close to two homes, so the company had to secure waivers from the owners.
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At a hearing in June, Karl Rockeman, director of the North Dakota Department of Environmental Quality's Division of Water Quality, requested that a third party evaluate the pipeline’s leak detection system, given the company’s track record of spills.
Belle Fourche has had 17 oil spills in the state since 2009, according to a document filed with the PSC. The list includes a spill in Billings County in 2016 that leaked 12,615 barrels of oil, which is about 530,000 gallons.
The U.S. Pipeline and Hazardous Materials Safety Administration is already conducting an audit of the company’s leak detection procedures. Rockeman said that could satisfy his request for an outside review.
A spokesman for the federal agency did not immediately respond with an update on the audit’s timeline.
Meanwhile, cleanup continues on the 2016 spill that leaked into Ash Coulee Creek, a tributary of the Little Missouri River. Belle Fourche has recovered just over one-quarter of the oil, Rockeman said. The company first focused on removing oil from the creek and has since installed steel sheets that act as a dam by collecting oil from groundwater that runs down the hill where the leak occurred.
The leak detection system on that pipeline had been malfunctioning. A landowner reported the leak several days after it occurred, prompting the company to take action.
Fedorchak said the company has since recalibrated the meters it uses to detect leaks and conducted a review of its equipment and procedures.
The converted 20-mile transmission line will be regularly inspected, and it’s monitored by a remote system that can shut down parts of the line in case of a leak, Salvin said. The company also is installing a more robust monitoring system on its pipelines that uses artificial intelligence.
The 20-mile pipeline is 8 inches in diameter and it’s made up of two segments, one built in 1978 and another in 2012. It can transport up to 43,000 barrels of oil per day.
Belle Fourche also is seeking state approvals for another transmission line in a similar situation. The pipeline runs 18 miles in Stark, Dunn and Billings counties and used to operate as a gathering line.
The commission has not yet made a permitting decision because the company is waiting to secure a waiver from residents who live within 500 feet of the line. Salvin said the company will keep working with the landowners to secure a waiver.