As the number of barrels of Bakken crude oil shipped by pipeline increases, the number of rail loading facilities in western North Dakota has dropped.
"During the height of the crude by rail activity in North Dakota, we had north of 20 rail loading facilities scattered throughout North Dakota," said North Dakota Pipeline Authority director Justin Kringstad. "now it's consolidated to around 12 facilities that are still loading crude oil, primarily on trains headed to the west coast, and some to the east coast."
Kringstad said the facilities that remain are acting more like “transportation hubs” for crude.
"Not only are they providing crude by rail service, they're also providing storage," Kringstad said. "They're providing access to various pipelines. Barrels are delivered there by gathering systems or by truck."
Kringstad said there’s a reason most of the oil delivered by rail is going to the west coast – and it isn’t oil exports.
"The refineries in the Pacific Northwest are light, sweet, crude oil refineries that do well with a Bakken barrel," Kringstad said. "So they have been attracted to the Bakken barrel and the way it runs in those facilities."
Kringstad said the opening of the Dakota Access Pipeline has been a big reason oil shipments by rail have decreased.
Kringstad also said getting natural gas liquids to market will be a growing problem.
Those “NGLs” are products like propane and butane.
Kringstad said as the production os natural gas from Bakken wells grows, it’s squeezing the available infrastructure.
"The current NGL structure is at its capacity," Kringstad said. "Now the industry is looking at solutions to address the future growth of natural gas liquids."
And Kringstad said industry has options.
"Is there a way to use those liquids for value-added propositions within the state?" Kringstad said. "Are there new pipelines that need to be constructed, or can existing pipelines be repurposed or expanded? All options are on the table."
Kringstad also said with the growth in natural gas production, there will be a need for companies to build new natural gas processing plants – as the current plants are nearing capacity.
