Update On The Issue Of Sour Bakken Oil; Enbridge "Wins"

First, a story from Motley Fool:

Enbridge Energy Partners has been in a bit of a battle with Plains All American Pipeline over the levels of hydrogen sulfide that's in the crude oil being delivered to its rail facility in the Bakken. The company is seeking to reject crude oil that contains more than five parts per million of the potentially deadly gas. This is after the company found extremely high concentrations of the gas in one of its crude oil tanks in North Dakota. The level of hydrogen sulfate hit 1200 parts per million which is a very potentially dangerous level.

Enbridge's proposal to reject crude with higher levels of the gas has not only caused it to fight against Plains, but it's not made producers like Marathon and Hess happy either. Those two companies, as well as other Bakken operators, could be forced to shut down oil and gas production until a new form of transportation can be secured. Both companies, along with Plains, have filed with FERC to slow down the pace of Enbridge's plans to reject oil with high concentrations of hydrogen sulfide.

f the souring of the Bakken becomes more widespread it could have a big impact on the profitability of higher-cost producers like Kodiak Oil & Gas. Because it costs the company $10 million on average to drill a well, its rates of return are already lower than its peers in the $8 million per well range. Additional costs from hydrogen sulfide mitigation equipment or special pipelines will slow growth and crimp profits.

Four days ago, Reuters reported:

Oil shipper Plains Marketing LP has agreed to limit the amount of crude containing high amounts of a dangerous gas it ships on Enbridge Energy Partners LP's North Dakota pipeline system, according to a filing with the U.S. Federal Energy Regulatory Commission this week.

Three days after discovering that high levels of hydrogen sulfide gas were in oil carried on the pipeline, Enbridge filed a request with FERC on May 8 to limit the amount of gas traveling through the system. It cited concerns about employee health when the crude was moved from the pipeline and onto rail cars at Berthold, North Dakota, for further shipping. Plains Marketing, part of Plains All American Pipeline LP, initially asked FERC to reject Enbridge's request, citing "serious economic harm."