Home / News / Bakken News / Keystone XL would have helped N.D. move some of its oil
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Keystone XL would have helped N.D. move some of its oil

The rejection of Keystone XL is a setback for North Dakota’s oil industry, even though falling oil prices and the drop in Bakken drilling and oil production have lessened the immediate need for it.

“It is a good time to say ‘No, we don’t want a pipeline’ when you really don’t need it,” said Rudy Hokanson, a Minnesota-based oil analyst for Barrington Research.

TransCanada’s proposed 1,200-mile crude oil pipeline from Alberta through Montana and South Dakota to Nebraska would have carried mostly Canadian oil sands crude. The takeaway capacity of a planned Bakken leg was 100,000 barrels per day, just under 10 percent of North Dakota’s current production.

But North Dakota officials believe that more Bakken pipelines still will be needed to carry future oil volumes.

“We will be talking to TransCanada and to others to understand how that need can be met,” Justin Kringstad, director of the North Dakota Pipeline Authority, said in an interview.

Both Canadian and North Dakota oil producers are hurting because of persistent low crude oil prices. On Friday, North Dakota reported just 64 active drilling rigs, a 71 percent drop from the peak in May 2012. North Dakota’s production fell 1.7 percent in August in the latest decline since peaking last December.

Kringstad said Keystone XL was one of four proposed pipelines intended to boost the state’s pipeline capacity. Nearly half of that state’s crude oil is shipped by rail, much of it on long oil trains that pass through Minnesota cities, including Minneapolis and St. Paul.

Two proposed projects to transport North Dakota oil are under regulatory review — Enbridge Energy’s Sandpiper pipeline across North Dakota and Minnesota and Energy Transfer Partners’ Dakota Access line via South Dakota and Iowa.

Related: Obama’s Keystone XL decision irks North Dakota US lawmakers

Those projects, as well as Enbridge’s separate plans to replace and expand another Canadian oil sands pipeline through Minnesota, are facing opposition from an anti-pipeline activists who cheered President Obama’s decision Friday on Keystone XL.

“We hope this decision will call attention to whether we will allow the massive expansions of especially tar sands oil to be piped through our state,” said Margaret Levin, state director of the Sierra Club North Star Chapter.

Frank Bibeau, an attorney for Honor the Earth, an environmental group led by Native Americans, said Minnesota now “will become the next important focus” of the anti-pipeline movement.

Enbridge reacted to opponents’ suggestion that Minnesota is the next ground zero for U.S. pipeline opponents.

“Conversation about pipeline and other infrastructure projects is healthy,” Enbridge spokeswoman Lorraine Little said by e-mail. “Support for Enbridge’s pipeline projects in Minnesota is growing. This is evidenced by the fact that 96 percent of landowners have signed easement agreements along the Sandpiper pipeline route and sixty five Minnesota legislators, the majority of the county commissions along the route, dozens of chambers of commerce and farm bureaus and thousands of citizens have adopted resolutions or written letters of support for Sandpiper.”

One worrisome alternative to Keystone XL — an increase in oil trains from Canada through Minnesota — is not playing out. Canadian crude exports by rail have dropped by half in the past year after peaking at 165,200 barrels per day in the third quarter of 2014, according to Canada’s National Energy Board.

“Rail has never been a serious alternative to Keystone XL,” said Rep. Frank Hornstein, DFL-Minneapolis, who has worked on crude-by-rail safety issues. “That has been a talking point for pipeline advocates. It is not based on reality.”

This article was written by DAVID SHAFFER from Star Tribune and was legally licensed through the NewsCred publisher network.

74 comments

  1. Obama did it this time, in his infinite wisdom lol

  2. What about the “Bakken Crude Express” pipeline and the “Dakota Express” pipeline proposals that died on the vine due to oil industry indifference, and the deceased Enterprise Products Partners pipeline project which would have run from the Bakken to Cushing, OK? The pipelines would have had “real” capacity. I must have missed the outrage, when the Bakken oil producers derailed these pipeline projects.

  3. If Obama wants to cut back on oil production why doesnt he stop buying middle east oil?

    • Over 50% of all oil imported by the US comes from Canada and has for decades–
      The K-XL was nothing more than a Canadian export scheme–
      THINK- in the seven yrs that it has been delayed not once has it been needed, not once has Canada had any problem making deliveries of their crude to the US refineries —
      Canada does have one very major problem — only one customer that they can export to –the US. And thanks to internal political problems have no port through which to export– the Canadin oil industry is limited to their own domestic use and what the US imports
      AND when the US export ban is lifted Canadian exports would compete wit US for market share

    • Thad. Blocking the KXL isn’t going to affect Canada’s exporting of oil in the medium term. In fact it will harm US exports of oil to Canada because of the Energy East pipeline which will replace all US exports of oil to eastern Canada

    • Thad, what a Dummy. How many times do you have to be told that exporting to a third country was never a motivation to complete K-XL? If Canada wanted to export from Texas ports, they could do so TODAY, up to 1 million bpd. All Canadian crude entering the US is refined in the US. It will always be so.

    • Thad, you foolishly think that Canadian exports would compete with US exports. THINK, old man! Canadian crude is very heavy, while surplus US crude is very light. They would not compete because they would go to different buyers.

    • Richard Guenther Canada is already sourcing from OPEC for eastern Canada–

    • Start randomly name calling people, Paul Smith… I bet it helps them understand your point better.

    • When the Canadian tar crude is refined at MOTIVA in the foreign trade zone it competes as refined product against US exports of refined product

    • Wrong, Dummy. Once refined, products from Canadian crude are indistinguishable from American crude or Saudi crude. All products refined by Motiva are commingled and sold to highest paying customers either domestic or foreign.

  4. TransCanada should just build the pipeline up to the border on both sides and then build a rail terminal on both sides. Ship the oil by rail over the border and then when Obama is gone join the two pipelines.

  5. ND has no excuse for not promoting a west to east pipeline to the Illinois hub..
    There is no need to run south for the heavy crude refineries–
    Or was the ND producers planning to use the K-XL as a export conduit when the ban is lifted —

  6. Someday you will learn to read thad, then you will discover that there were 2 train derailments in Wi over the weekend. Next you will dicover that

  7. Obama is protecting his friend buffet who also coincidently owns the railroads.

  8. There have been production tanks that have leaked and found days sometimes weeks later.. What happens when a leak occurs with this pipeline? Even Alaska has had its fair share of issues in regards to trans-alaska pipeline..

  9. And now to “real life” where pipelines leak…

    • Oh ! Heaven forbid !!! Hey how about the dozens of rail derailments over the last 5 years that have burned alive literally hundreds of people, here in the U.S. And Canada ! A pipeline , despite a leak here and there, is WAY safer, more cost effective , and doesn’t line Buffets and Obamas pockets with $$ .! It is a blatant political maneuver by leftists that play the ” environmental”card to arouse the uninformed “sheepeople” that have no knowledge ( or common sense)of the real logistics that keep them and the economy running ! Richard Travis Dumbzelton ( if that is your re real name ) go live in a world where you power your life on ” unicorns farts”…

    • So when a pipeline leaks is it easier to clean up than a railcar?
      The chemical used to move the bitumen through the pipelines is very destructive. Maybe chill on calling everyone uninformed sheepeople. Whatever that is

    • Oh isn’t Mr Steve MacikMack so cute!! When he flails his arms about and jumps around in circles, when he doesn’t get his way?

      Making up new name for my name (in Junior high it was Dick Brazel-Balls or Brazil-Nuts; but, we all can’t be as inventive as the other children).

      I guess if you can’t defend your position with facts, calling names, and acting like a child might get you a hug from your mother; or a slap in the face from your father. Either way, I hope you get the attention you seek.

  10. Yet again if it will be good for America Obama well veto it!

  11. There’s absolutely no reason why we can’t build our own pipelines in ND and America ! We don’t need a Canadian pipeline to transport OUR oil so, better find another excuse other than this one.

  12. Its all government market price fixing !

  13. The Canadian pipeline that had nothing to do with American oil

  14. It would ship Bakken oil just like the southern leg of it already does.

  15. Then why has TC not constructed as far as ND– no presidental approval required

  16. I guess that is a question you would have to ask them. Probably it’s a package deal. And the southern leg was completed a few years ago.

  17. Richard Guenther keystone would not ship Bakken oil

  18. It’s main purpose would be to ship Canadian oil to refineries on the gulf coast. Shipping Bakken oil would be secondary. But regardless… What’s wrong with shipping Canadian oil to refineries on the gulf coast. Better than shipping that oil by rail which is what is happening now.

  19. Richard Guenther LOL– Venezuela would not have any pipelines running across the US for exporting to a third country

  20. Trains in place of the K-XL -imposible THINK
    Through put would be 840,000 bpd, tank car 750 bbl = 1,200 tank cars / 18 miles of train each and every in 24 hre to make way fdor
    And how would the trains be unloaded in 24 hrs to make way for tomorrow’s train – discharge rate 35,000 bph

  21. What about the Sandpiper?

  22. Run a pipeline north into Canada & straight west over the Rockies to port at sea & zero

  23. Canadian tar sands oil is going to market one way or another. My preference pipeline.

  24. If Obama approved the xl we along with great Britain wouldn’t have to buy it from isis.

  25. Leonard Pierce all Canadian crude that the US needs and imports for decades has been delivered without the K-XL and without problem
    The through put for the K-XL being for export would be in addition too so that problem needs to be lrft to Canada in Canada

  26. Trains in place of the K-XL impossible– THINK
    Through put 840,000 bpd / every day,. tank car 750 bbls = 1,200 tank cars/ 18 miles of trains each and every day
    Scare tactic of proponents

  27. Thad without KXL the US will purchase more oil from Venezuela (and our wonderful friends in Saudi Arabia) but hey… If that is where you want your consumer dollars to go, who am I to argue. 🙂

  28. We already ship a lot more oil than that by rail so it’s doable. But Obama will be gone in another year so probably not required.

  29. If Canada runs the pipeline to their west coast the oil will be refined in China. Where do you think there would be less pollution? The answer is simple

  30. Richard Guenther –“already ship a lot more oil than that barsy rail so it’s doable.”
    No here is that much oil shipped to one point in 24 hrs
    And it would involve more than one set of 1,200.. in each 24 hr one train being loaded, one train being unloaded–in transit two day round one train going one train returning
    Minimum of 5,000 tank cars nd then there is 4 locomotives per 100 tank cars = 200

  31. So you are saying we should build a pipeline then Thad? Lol

  32. The US imports 3.2 million bpd of Canadian crude, about 60% more than 2008, thanks to Keystone Phase 1 and Alberta Clipper pipelines.