Category Archives: Pipeline transport

Bakken Crude, Crude By Rail, Oil Industry, Pipeline transport

Fewer Bakken oil trains when major new pipeline is operational

Repost from the Chronicle Times, Cherokee, IA
[Editor: Significant quote: “Currently, almost 100% of the 944,000 barrels of crude oil produced daily from western North Dakota oil fields moves out over the U.S. railroad system.”  – RS]

Energy Transfer sells share of Bakken Pipeline

By Loren G. Flaugh, Wednesday, August 31, 2016
Rail shipments to lessen when pipeline operational

(Photo)According to an Energy Transfer Partners, L.P. (ETP) website, ETP and Sunoco Logistics Partners, L.P. announced they had signed an agreement to sell 36.75% of the Bakken Pipeline Project to MarEn Bakken Company, LLC. Marathon Petroleum Corporation and Canada based Enbridge Energy Partners, L.P. jointly own MarEn Bakken.

Marathon Petroleum and Enbridge paid $2 billion in cash for the minority share of the Dakota Access Pipeline (DAPL) and its sister pipeline, the Energy Transfer Crude Oil Pipeline (ETCOP).

The DAPL consists of approximately 1,172 miles of 30-inch diameter pipeline from western North Dakota’s Bakken oil production region to the petroleum storage hub at Patoka, Illinois. The ETCOP is roughly 700 miles of existing, 30-inch diameter pipeline already converted from carrying natural gas to carrying the light sweet Bakken Crude oil. That converted pipeline starts at Patoka and terminates at Nederland, Texas near Houston.

Energy Transfer said the sale to Marathon Petroleum and Enbidge is to close in the 3rd quarter of 2016 and it’s subject to certain closing conditions. ETP will receive $1.2 billion and Sunoco will receive $800 million in cash when closing is finalized.

Energy Transfer said they plan to use the proceeds from the cash sale to pay down debt and to help fund their current growth projects.

Energy Transfer/Sunoco will own 38.25% of the DAPL. MarEn will own 36.75% and Phillips 66 will continue to own the remaining 25%. Energy Transfer will continue to oversee the ongoing construction of the approximately $3.8 billion pipeline project. Once the pipeline becomes operational later this year, Sunoco will be responsible for day-to-day operations of the pipeline.

Energy Transfer will quickly initiate another open season process and solicit additional shippers on its common-carrier crude oil pipeline to increase the daily flow rate from the current design capacity of 450,000 barrels per day to just under 600,000 barrels per day. The tariffs that ETP will assess petroleum companies that ship oil on the pipeline will pay off construction costs and provide revenue for day-to-day operations

A large subsidiary of Marathon Petroleum has already committed to participate in this upcoming open season and will make a long-term commitment to ship a large volume of Bakken crude oil to the Patoka petroleum hub. Enbridge owns crude oil storage tanks at Patoka and existing pipelines that go in to and out of this vital petroleum transshipment hub.

When ETP proposed the DAPL back on June 25, 2014, the pipeline was designed for transporting 320,000 barrels of light sweet Bakken crude oil per day. Energy Transfer said that they would solicit additional shipper interest to increase the daily flow rate. Additionally, Energy Transfer said they were in discussions with Sunoco to seek their participation in a potentially significant equity partnership.

Then on September 22, 2014, Energy Transfer announced that they intended to initiate an Expansion Open Season to acquire additional crude oil transportation services on the DAPL. This Expansion Open Season was successful when additional shippers signed long-term commitments increasing the daily throughput to 450,000 barrels per day.

With the pending ETP open season in the coming weeks, this anticipated flow-rate increase of upwards of 570,000 barrels per day will result in the DAPL moving a substantial volume of the daily crude oil produced from western North Dakota’s Bakken/Three Forks petroleum production areas.

According to the North Dakota Bakken Daily Oil Production News website, the daily production level of Bakken crude oil stood at 994,727 barrels per day as of May 31, 2016. This is a small increase from the previous month. However, both production figures are down significantly from June 30, 2015 when the Bakken oil field was producing at the rate of 1,153,000 barrels per day. The Bakken oil fields had been yielding almost 1,200,000 barrels per day in 2014 when prices for crude oil were much higher than today.

The U. S. Energy Information Administration (EIA) recorded a price for crude oil at $105 per barrel in June of 2013. It was in July of 2014 when oil prices dropped below $100 per barrel. One year ago, in June of 2015, the EIA reported a price per barrel of around $60. Earlier this year, in February, the price per barrel plunged to just above $26 per barrel. Today’s price per barrel is around $40 and still expected to fall more.

The daily production rates for crude oil in the Bakken oil fields are rising and falling right along with the fluctuating prices for crude oil and will continue to due to the current over-supply of crude oil in the world oil markets.

Currently, almost 100% of the 944,000 barrels of crude oil produced daily from western North Dakota oil fields moves out over the U.S. railroad system. That is because there are no significant crude oil pipeline systems originating from the Bakken region currently available for moving this huge volume of light sweet crude oil into the broader U.S. pipeline distribution system.

Once the 600,000 barrel per day DAPL begins commercial operations later this year, it will be the first major pipeline to move Bakken crude oil. However, that still leaves about 400,000 barrels per day for railroad shipment. A 100-car Bakken crude oil unit train can carry about 3,000,000 gallons of oil.

According to North Dakota statistics, Burlington Northern & Santa Fe Railroad (BNSF) hauls out about 75% of the crude oil that leaves the Bakken region. Union Pacific and CSX Corporation are other rail carriers that move Bakken crude oil. Some Bakken crude oil goes north into Canada and is moved east or west to crude oil refineries located as far east as Nova Scotia.

The most recent crude oil unit train derailment happened on June 3, 2016 when a 96-car Union Pacific unit train carrying Bakken crude oil derailed while moving through the Columbia River Gorge near Mosier, Oregon. Fourteen of the tanker cars derailed, ruptured and caught fire. Approximately 42,000 gallons of crude oil spilled. A federal investigation revealed that broken bolts joining two rails caused the accident.

The Iowa Homeland Security and Emergency Management Department tracks how much Bakken crude oil moves through Iowa. According to figures from early 2015, BNSF moves Bakken crude oil through Iowa on one heavily used route through Lyon, Sioux and Plymouth Counties and into eastern Nebraska. Another heavily used BNSF route crosses southern Iowa. When daily North Dakota crude oil production rates peaked in 2014 and 2015, roughly 12 to 18 crude oil unit trains per week used the two BNSF routes.

The Association of American Railroads did a study of U. S. Rail Crude Oil Traffic in November of 2015. Their summary noted; U.S. crude oil production has risen sharply in recent years, with much of the increased output moving by rail. In 2008, U.S. Class I railroads originated 9,500 carloads of crude oil. In 2014, they originated 493,146 carloads, an increase of nearly 5,100 percent. Rail crude oil volumes in 2015 will be lower than in 2014. Additional pipelines will probably be built in the years ahead, but the competitive advantages railroads offer–including flexibility to serve disparate markets–could keep them in the crude oil transportation market long into the future.

Bakken Crude, Crude By Rail, Derailment, Explosion, Oil spill, Oil trains, Pipeline transport

KQED: Oil train traffic is down by more than half — for market reasons

Repost from KQED Marketplace

Oil train traffic is down — for market reasons

By Jed Kim, August 24, 2016 | 11:12 AM
At its peak, in October 2014, trains leaving the Bakken region of North Dakota moved more than 29 million barrels. – FREDERIC J. BROWN/AFP/Getty Images

Oil and its downstream products enable most transportation methods, from the gas in automobile tanks to the rubber in shoes. For oil itself, however, there are only a few methods of movement, and each is controversial. In the U.S., one method that saw a recent boom is now on the decline.

Shale oil pumped in recent years from the Bakken region in North Dakota ramped up production and availability faster than pipelines could be built. Trains filled in the gap in the meantime. At its peak, in October 2014, trains moved more than 29 million barrels.

The most recent data from the Energy Information Administration shows that the amount of oil shipped by rail has fallen dramatically since.

“Within the U.S., we’re moving about 12 million barrels in May, and that compares with last May – the intermovements within the U.S. was 26 million barrels,” said Arup Mallik, an industry economist at the Energy Information Administration.

Several factors have contributed to the more-than-half decline in shipments. One is that the price of U.S. oil has risen to more closely match global prices. That has reduced the amount of oil being purchased and shipped to refineries.

Low global oil prices, meanwhile, have stifled production, thus reducing the amount of oil needing to be moved.

While those factors have led to a temporary reduction in the need for crude-by-rail shipping, the completion of additional pipeline infrastructure around the country has made more of a permanent change.

“New pipelines are still getting built, further pushing down the need for crude-by-rail,” said Adam Bedard, CEO of ARB Midstream, a company that invests in pipelines and rail facilities.

Bedard said the biggest impact to crude-by-rail shipments may come later this year, if construction is completed on the Dakota Access Pipeline, which would move oil east into Chicago.

“Those barrels will have to come from somewhere, and it is our view that a lot of those barrels will come from crude by rail,” Bedard said. “The Dakota Access Pipeline can move up to 450,000 barrels a day.”

In May, the total amount of oil moved by trains in the entire U.S. was 470,000 barrels a day.

The future of that pipeline is being decided. Protests have temporarily halted construction of the Dakota Access Pipeline, partly because of concerns for the safety of drinking water.

Safety issues plague perception of crude-by-rail as well. In the past four years, there have been a dozen significant derailments of trains carrying crude oil in the U.S., spilling more than 1.5 million gallons, according to the Federal Railroad Administration.

Brett VandenHeuvel, executive director of Columbia Riverkeeper, said his organization is fighting to reduce or eliminate the traffic traveling through the Pacific Northwest. An oil train derailed in Mosier, Oregon, in June, spilling an undetermined amount of crude.

“We think oil trains are dangerous,” said VandenHeuvel. “We’ve seen explosions very close to our homes here on the Columbia River and have watched explosions and derailments all over the nation, and we think it’s not a safe way to transport oil.”

The overall decline of oil train traffic in the U.S. doesn’t extend to his region, as the network of pipelines on the West Coast is largely isolated from the rest of the country. Trains are necessary. Canada, as well, is expected to see an increase in crude-by-rail because it lacks comparable pipeline infrastructure.

VandenHeuvel said his organization will work to keep more terminals from being constructed that would bring in more rail traffic. He said he’s concerned more will come if oil prices rise again.

“You know, that number could ramp back up as production increases,” VandenHeuvel said.

Jed Kim
Jed Kim is a reporter for the Marketplace Sustainability Desk. He focuses on issues of climate change, conservation, energy and environmental justice.  Prior to joining Marketplace in April 2016, Jed was an environment reporter at KPCC public radio…
Pipeline infrastructure, Pipeline transport

North Dakota pipeline construction halted until court date

Repost from Minnesota Public Radio

North Dakota pipeline construction halted until court date

Business Associated Press · Bismarck, N.D. · Aug 18, 2016
Native Americans protest Dakota Access pipeline
Native Americans protest Dakota Access pipeline. James MacPherson | AP Photo File

Developers of a four-state oil pipeline have agreed to halt construction of the project in southern North Dakota until a federal court hearing next week in Washington, D.C.

The temporary construction shutdown comes amid growing protests and increased tension over the Dakota Access Pipeline that is intended to cross the Missouri River near the Standing Rock Sioux reservation that straddles the North Dakota-South Dakota border.

Some things to know about the pipeline and the protest:

What is the Dakota Access Pipeline?

Dallas-based Energy Transfer Partners’ Dakota Access Pipeline is a $3.8 billion, 1,172-mile project that would carry nearly a half-million barrels of crude oil daily from North Dakota’s oil fields through South Dakota and Iowa to an existing pipeline in Patoka, Illinois, where shippers can access Midwest and Gulf Coast markets.

Why the protest?

The Standing Rock Sioux Tribe is suing federal regulators for approving the oil pipeline that would be the largest-capacity one carrying crude out of western North Dakota’s oil patch.

The tribes’ lawsuit filed last month in federal court in Washington challenges the U.S. Army Corps of Engineers’ decision to grant permits at more than 200 water crossings in four states for the pipeline.

The tribe argues the pipeline that would be placed less than a mile upstream of the reservation could impact drinking water for the more than 8,000 tribal members and the millions who rely on it further downstream.

The lawsuit, filed on behalf of the tribe by environmental group Earthjustice, said the project violates several federal laws, including the National Historic Preservation Act.

The tribe worries the project will disturb ancient sacred sites outside of the 2.3-million acre reservation. The hearing on the tribe’s request for a temporary injunction is slated for Wednesday.

Who are the protesters?

Mostly members of the Standing Rock Sioux tribe, but they’ve been joined by other American Indians and non-Native Americans from across the country. “Divergent” actress Shailene Woodley was part of the protests last week.

Arrests

American Indians have for months been staging a nonviolent protest at a “spirit camp” at the confluence of the Cannonball and Missouri rivers in the path of the pipeline.

More than a dozen young people from the reservation also ran from North Dakota to Washington to deliver 140,000 petition signatures to the Corps to protest the pipeline.

The protest took a turn last week when law enforcement was called to keep the peace between protesters and armed security guards hired by the company.

Twenty-eight people have been arrested since then and charged with interfering with the pipeline construction, including Standing Rock Sioux Tribal Chairman David Archambault II.

Developers on Monday sued in federal court to stop protesters, alleging the safety of workers and law enforcement is at risk.

Is the pipeline safe?

The company said the pipeline would include safeguards such as leak detection equipment, and workers monitoring the pipeline remotely in Texas could close block valves on it within three minutes if a breach is detected.

Why the need

Energy Transfer Partners announced the Dakota Access pipeline in 2014, a few days after North Dakota Gov. Jack Dalrymple urged industry and government officials to build more pipelines to keep pace with the state’s oil production, which is second only to Texas’.

Supporters said the pipeline would create more markets for the state’s oil and gas, and reduce truck and oil train traffic, the latter of which has been a growing concern after a spate of fiery derailments of trains carrying North Dakota crude, including one near Dalrymple’s hometown of Casselton in 2013, and an explosion in Quebec that same year that killed 47 people.

Bakken Crude, Bakken Pipeline, Dakota Access, Eminent domain, Pipeline infrastructure, Pipeline rupture, Pipeline transport, Sacred lands, Tribal lands

U.S. Government Just Approved an Enormous Oil Pipeline

Repost from Mother Jones

The Government Quietly Just Approved This Enormous Oil Pipeline

Four reasons why people are outraged.

By Alexander Sammon, Aug. 12, 2016 6:00 AM
ewg3D/Thinkstock

It took seven years of protests, sit-ins, letter writing, and, finally, a presidential review to prevent the Keystone XL oil pipeline from being built. Now, in a matter of months, America’s newest mega-pipeline—the Dakota Access Pipeline Project (DAPL)—has quietly received full regulatory permission to begin construction. Known also as the Bakken Pipeline, the project is slated to run 1,172 miles of 30-inch diameter pipe from North Dakota’s northwest Bakken region down to a market hub outside Patoka, Illinois, where it will join extant pipelines and travel onward to refineries and markets in the Gulf and on the East Coast. If that description gives you déjà vu, it should: The Bakken Pipeline is only seven miles shorter than Keystone’s proposed length.

The proposed route of the recently approved Bakken Pipeline – Dakota Access

The $3.78 billion project is being built by Dakota Access, LLC, a unit of the Texas-based Energy Transfer Partners. (Former Texas Gov. Rick Perry, a friend of Iowa Gov. Terry Branstad, sits on ETP’s board.) According to the firm, the Bakken Pipeline will transport up to 570,000 barrels of crude oil per day. Advocates have celebrated the supposed 12,000 jobs the pipeline will create in construction, while repeating calls to end American dependence on foreign oil—a platform called into question by new laws allowing US producers to export crude. The US Army Corps of Engineers gave its blessing at the end of July, clearing the final hurdle for the massive infrastructure project, which is slated to be operational by the fourth quarter of 2016.

Though the project hasn’t gotten too much national media attention, there’s been plenty of local opposition. Groups like the Bakken Pipeline Resistance Coalition, a collective of 30-plus environmentalists’ and landowners’ associations, along with Native American groups, have cried foul. Here are the four things they’re most outraged by:

How many jobs…really: According to Dakota Access’s DAPL fact sheet, the pipeline will create 8,000 to 12,000 construction jobs. An earlier draft of those figures claimed 7,263 “job-years” to be created in Iowa alone. Not so fast, says professor David Swenson, associate scientist in the Department of Economics at Iowa State University. Swenson crunched the numbers himself and came to a much more modest conclusion: 1,500 jobs total per year in Iowa for the course of construction. And given that most of these jobs are skilled, Swenson expects many of the hires will be from out of state, as Iowan contractors specializing in large-scale underground pipe-fitting and welding are scarce. The long-term forecast for job creation is even bleaker. The Des Moines Register reports that there will only be 12 to 15 permanent employees once the pipeline is completed. (DAPL has since walked back its job estimate slightly.)

Spill, baby, spill: As Sierra Club’s Michael Brune puts it, “It’s not a question if a pipeline will malfunction, but rather a question of when.” And, though they spill less often than trains do, the International Energy Agency found that pipelines spill much more in terms of volume—three times as much between 2004 and 2012. The Bakken Pipeline’s route takes it through active farmland, forests, and across the heartland’s major rivers: The Big Sioux, the Missouri, and the Mississippi, some with multiple crossings, though the US Fish and Wildlife Service claims that no “critical habitat” is endangered. It also runs through sacred Native American lands (more on this below).

Enbridge Inc., a stakeholder in the Bakken pipeline, has a speckled track record on spills. In 2010, an Enbridge pipeline spilled 1.2 million gallons of crude into the Kalamazoo River, one of the worst inland spills in American history. Because the pipeline qualifies as a utility (despite being privately owned and for-profit), the Army Corps of Engineers was able to certify it without performing an environmental impact statement, as all utilities projects qualify as “minimal impact.” These projects are subject to environmental assessments every five years.

Don’t tread on me: Private property owners, particularly in Iowa, have bristled at the Bakken Pipeline’s expropriation of land. ETP asked the Iowa Utilities Board to grant it the powers of eminent domain, the process by which a government can repossess private property for public use even if the private property owner does not voluntarily sell. The IUB, a three-person committee appointed by Republican Gov. Terry Branstad, granted ETP that right for its for-profit private pipeline, a practice that is not uncommon, in order to purchase 475 parcels from resistant landowners. This has led to numerous pending lawsuits, with the Des Moines Register reporting that the issue may make it all the way to the Iowa Supreme Court. In May 2015, ETP was embroiled in scandal after a contracted land agent, working on behalf of the Bakken Pipeline, allegedly offered an Iowan landowner a teenage prostitute in exchange for voluntary access to his property. (No charges were brought after the Iowa Department of Criminal Investigation determined that the case did not meet the legal standard for pimping, solicitation, or conspiracy.)

DisRezpect: The pipeline will cross through sacred lands and pass under the Missouri River twice. For the Standing Rock Sioux, the Missouri provides drinking water and irrigation, while its riverbanks grow innumerable plants of cultural import, including sage and buffalo berries. The tribe launched a campaign called “Rezpect Our Water” and staged a 500-mile relay race in protest, hoping to sway the Army Corps of Engineers in the permitting process. Last weekend, a group of 30 Native youth completed a three-week run from North Dakota to Washington, DC, where they delivered a petition of 160,000 signatures opposing the pipeline’s construction.

Now, even though the Corps has given the go-ahead, the tribe has not given up the fight. They recently filed suit against the Corps in federal court. The suit seeks an injunction, asserting that the pipeline will “damage and destroy sites of great historic, religious, and cultural significance,” a violation of the National Historic Preservation Act.

Though the pipeline seems to be a done deal, resistance of all types continues. Last week, the Des Moines Register reported that authorities are investigating suspected arson against the ETP’s heavy machinery. The fires, three separate incidents across two Iowa counties, resulted in nearly $1 million in damage to bulldozers and backhoes. The acts appeared to be intentional incidents of monkeywrenching.

On Thursday, a group of protesters, including the Standing Rock Sioux and their allies, gathered in North Dakota to oppose the pipeline, blocking the construction site. The police ultimately broke up the demonstration, resulting in at least five arrests.

Matt Remle @wakiyan7

No Dakota Access pipeline from Camp of the Sacred Stones blockade @POTUS@FLOTUS@USACEHQ
2:03 PM – 11 Aug 2016

lastrealindians.com @lastrealindians

Spirit Camp Warriors Stand in Path of the Dakota Access Pipeline http://lastrealindians.com/spirit-camp-warriors-stand-in-path-of-the-dakota-access-pipeline/ …
8:35 AM – 10 Aug 2016