The director of the North Dakota Pipeline authority remains optimistic that a natural gas pipeline will be built from the Bakken to eastern North Dakota.
"There are companies, and I can say confidently, that are sharpening pencils and refining estimates on cost," said Justin Kringstad. He said that cost equation has improved, because there has been a steadying of inflation on steel and other costs associated with pipelines.
"There was a time period where every month, costs were going up — energy inputs, material steel prices," Kringstad said. "We're seeing some plateauing of that, which helps give some confidence to some numbers. And you need that confidence in order to go out to the marketplace with any type of price discussions."
Lieutenant Governor Brent Sanford said he's also confident the pipeline will be built. Sanford told reporters at the annual "Empower" conference at BSC the challenge right now is to find customers for the gas.
"You're going to build that much infrastructure, and you're in the pipeline business, and you're going to FERC (Federal Energy Regulatory Commission) and the PSC, you need to have customers signing up," Sanford said. "Are there customers? Are they in Fargo and Grand Forks? Are they in Mayville, Velva, Harvey, Jamestown?"
Sanford said he knows there isn't enough natural gas in the eastern part of the state.
Sanford said without this – the state will be running out of pipeline capacity for the natural gas being produced in the Bakken.
"If the pipelines aren't built, and we don;t use it ourselves, oil production goes down," Sanford said. "Our budget is very based on oil."
Sanford said some projections show the state could lose 200,000 to 300,000 barrels per day in oil production.
The state is offering $150 million in “seed money,” to help build the pipeline. But some in the industry say that may not be enough. Kringstad was asked if the next Legislature may be asked to up the ante.
"During the Legislature's special session, when the $150 million was allocated, there was additional language from the Legislature that they would come back and take a look at what was necessary," Kringstad said. "I fully expect those conversations will be had."
There is a Dec. 31st deadline for companies to indicate their interest.
