Thursday, April 4, 2013

Another Keystone XL Workaround -- Harold Hamm Sees The Writing On The Wall -- Even If Keystone XL Is Approved, He Can Get His Pipeline In Sooner; Keystone XL Wounldn't Carry Bakken Light Sweet Regardless


April 12, 2013: a more detailed look at the Double H pipeline in Fallon County, Montana.  The Fallon County Extra is reporting:
The pipeline, unofficially called the Double H, is proposed to stretch 462 miles from the Bakken oilfield location of Dore, North Dakota to Guernsey, Wyoming where it will connect with the Pony Express pipeline. The Pony Express formerly transported natural gas, but is being retrofitted to handle crude oil and would then transport the crude oil all the way to Cushing, OK, a storage and trading hub for crude oil. The oil purchased from Cushing is usually refined at Gulf Coast refineries.

The pipeline is to use 12” diameter pipe which will stretch across 48.4 miles of Fallon County. Its initial capacity was listed as 50,000 barrels per day (bpd) with a planned expansion of 80-100,000 bpd.
Hiland estimated the construction time in Fallon County to be between four and five months. 
Original Post
Don sent me two stories.

First, President Obama's stimulus program to study condom use, at a cost of only $423,000, resulted in no new jobs.
The stimulus project yielded a total of 0.00 jobs created, according to the federal government. "No jobs created/retained," the form says under "Description of Jobs Created."
Results of the study have not been posted on the internet.  So, $423,000 resulted in no new jobs, but a lot of fun for two university researchers.

That's your government-run public sector at work (other work includes killing the Keystone XL pipeline, not once, but twice).

Meanwhile, in the private sector, one individual, Harold Hamm, using no government money, stimulus or otherwise, will be laying new pipeline segments to move a bunch of oil from the Bakken to Cushing, Oklahoma (where they hardly need any more oil, but I digress). The new pipeline will be called the Double H pipeline.

The Billings Gazette reports the story. The article refers to "Door, North Dakota" which is probably "Dore, North Dakota."

Butte Pipeline runs from Baker, MT, to Guernsey, WY.  At the link one can access a PDF of the map of the pipeline.

So, it appears, Harold Hamm will run a pipeline from Dore, ND, where there is already a huge CBR facility (one of the first), connect with Butte Pipeline, and then the 250 miles through southeast Wyoming from Guernsey to hook up with the Tallgrass Pony Express pipeline which runs from Colorado across Nebraska's Agallala aquifer. This was a natural gas pipeline that is being converted to carrying crude; to be on-line in 2014. Nebraska laws did not affect it because it was not a new pipeline. As my daughter would text, LOL. [Irony: when the president approves the Keystone XL, Nebraskans will have two new crude oil pipelines crossing the aquifer instead of just the one. Such sweet irony.]

So, the only portion I don't know about: is a new pipeline (a very short section) needed in northeastern Colorado to connect with the Tallgrass pipeline? Probably. And, of course, the pipeline from Dore, ND, to Baker, MT, if indeed that's the plan (there are existing ND/MT pipelines running from the Bakken to Baker, MT, including the Belle Fourche pipeline).

So, two new sections Harold Hamm needs to lay:
  • Dore, ND, to Baker, MT (assumption)
  • Guernsey to Tallgrass Pipeline (probably two states, Wyoming and Colorado) 
It will be interesting to see how much pushback Harold Hamm gets on this project. TransCanada and President Obama succeeded where no predecessors had been able: paint the US domestic pipeline system as a most dangerous system, one which needed to be stopped at every point possible. Reading the linked Billings Gazette story brings that point home.  I've never seen a president so successful at denigrating American industry.

By the way, Harold Hamm will be using $300 million of private sector money to finance his new pipeline, and unlike the president's condom stimulus program, Hamm's project will result in hundreds of new jobs, albeit temporary. But every construction job is temporary. Even building houses.

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