New incentive pending for a pipeline to bring Bakken gas to central and eastern North Dakota
The North Dakota legislature is looking at a new way to incentivize a natural gas pipeline to bring Bakken gas to central and eastern North Dakota.
An effort began in the 2021 special Legislative session to use $150 million in federal money from the American Rescue Plan Act as seed money for a pipeline. But even though there was interest, there were no takers.
"The way pipelines work is, the companies that use them, operate them and build them, build them based on sales, contract sales and and an end point," said Sen. Brad Bekkedahl (R-Williston), chairman of the North Dakota Senate Appropriations Committee. "We didn't have enough contract sales in eastern North Dakota to support building the pipeline, even with the $150 million subsidy."
Bekkedahl said in the Industrial Commission budget bill, the state will try a new program. Under it, instead of subsidizing the building of the pipeline, the state would subsidize the sale of the product at the end of the pipeline.
"We (the state) would buy capacity on the pipeline, spare capacity not being sold yet on the other end," Bekkedahl said. "Then they can build the pipeline, sell what they have right now for capacity contracts, and then work to engage further contracts. That would take the state out of its obligation of the capacity contracts."
Bekkedahl said it means less money up front for the state, and better certainty for the pipeline builders. He said the funding source for this program has not yet been identified. That’s because the ARPA money has to be spent by 2026. Bekkedahl said that $150 million will go toward other projects – and he said the legislature is looking at $80 million of that going to the State Interoperable Radio Network.
"That's directly to enhance the capabilities of our emergency services — our police and our fire — to have systems that talk to each other, which we didn't have before this," Bekkedahl said.