I posted this the other day, that the Sandpiper might be at risk. Yesterday, Reuters reported that Enbridge's Sandpiper looks be latest victim of overbuild.
The long-planned
and oft-delayed Sandpiper pipeline through the U.S. Midwest may not be
dead, but it appears to be on life support, a likely casualty of the
oil-and-gas industry's infrastructure overbuild amid a two-year global
oil rout.
After years of
delays, refiner Marathon Petroleum Corp and midstream giant Enbridge Inc
on Tuesday announced they would scrap their joint venture agreements
and transportation services for the 450,000 barrels per day Sandpiper
project, instead agreeing to acquire a portion of the rival Dakota
Access Pipeline.
That $1.5 billion deal, if successful, will
leave Sandpiper without Marathon as its main anchor, even though an
Enbridge spokesman said plans for the line are still being evaluated.
The project involves two pipeline legs stretching from North Dakota
through Minnesota to Wisconsin.
Outgoing
pipeline capacity from the Bakken is currently at around 641,000 bpd,
according to Genscape. Once Dakota Access becomes operational, capacity
will rise to 1.21 million bpd.
That
projected increase comes against the backdrop of a dramatic decline in
oil prices that has weighed on production in North Dakota's Bakken play,
one of the biggest beneficiaries of the boom in U.S. shale production
over the last several years.
The
Dakota Access Pipeline, slated to stretch from North Dakota to Illinois,
is expected to come online in the fourth quarter. With global oil
futures down by 70 percent in the last two years, traders and analysts
say there just is not enough crude in production in the U.S. Midwest for
both pipelines.
In the short term, and possibly even long term, this gives some life to CBR since CBR still provides flexibility in getting oil to the East Coast, but in the big scheme of things, as long as North Dakota production remains around 1 million bopd or less, pipe will be adequate.
The company originally planned for startup early this year, then
pushed it to 2017 after Minnesota regulators ordered a state
environmental review that would examine alternate routes for that
state's portion of the project.
U.S. refiner Marathon Petroleum
Corp in 2013 agreed to pay 37.5 percent of Sandpiper's construction
costs in exchange for a 27 percent interest in Enbridge's North
Dakota pipeline system.
The Line 3 replacement involves swapping
1,031 miles of 34-inch pipeline with new 36-inch pipeline that would
push capacity to 760,000 bpd from an average of 390,000 bpd. The North
Dakota-Minnesota-Wisconsin portion of the $7.5 billion that connects
Edmonton, Alberta, to Superior, Wis. was estimated to be $2.6 billion.
Enbridge
said Minnesota regulators require that final environmental reviews be
finished for each project before the company can move on to seek other
permits.
Another delay on the time table of two oil pipeline projects in
northern Minnesota has opponents of the projects declaring victory.
Enbridge
Energy, the company behind the proposed Sandpiper and Line 3 projects,
announced this week both pipelines won’t be ready until early 2019.
December’s
decision by the Minnesota Public Utilities Commission to require a
fully completed environmental impact statement to be done by state
agencies before either project gets approved is likely to drive the cost
of both projects higher, according to an Enbridge press release.
Spokeswoman Lorraine Little confirmed costs were likely to rise,
although the release nor she were able to state exactly what the new
price tags would be.
The Sandpiper project was originally
scheduled to come online this spring. The 616-mile pipeline from the
North Dakota Oil Patch to Superior, WI, and was expected to cost $2.6
billion. The Line 3 replacement would run from northern Alberta to
Superior.
The 1,031-mile project was estimated to cost $7.5 billion,
with the American portion costing $2.6 billion.
In the big scheme of things, the Sandpiper is no longer needed.
This is how the Keystone XL was killed.
And this is not good news for the Dakota Access Pipeline which is likely to face a similar outcome in Iowa. It doesn't take a rocket scientist to think that the Iowa regulators aren't looking at what the Minnesota regulators just did.
Disclaimer: this is not an investment site. Do not make any investment or financial decisions based on anything you read or think you might have read at this site or this post or this blog. Whatever.
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Governor Says He Didn't Get The Memo
Though His Regulatory Agencies Did
Disclaimer: there will be many typographical, and possibly factual, errors on this page. I did it quickly and did not have time to proofread it more than once.
Gov. Mark Dayton has told BNSF Railway’s top executive that he is “deeply concerned” about the recent increase in Bakken oil trains on western suburban tracks into downtown Minneapolis, saying it puts an additional 99,000 people at risk.
In a letter to CEO Carl Ice, the governor asked the railroad not to operate oil trains on the line that passes Target Field when events are underway, to extend first-responder training to all communities along the route and assess it for a worst-case accident.
BNSF, the major crude oil hauler out of North Dakota, recently disclosed in a mandatory report to the state that 11 to 23 crude oil trains per week are using the route from Willmar, MN, through suburbs like Wayzata and St. Louis Park into Minneapolis and across the Mississippi River at Nicollet Island.
Dayton said he was concerned that BNSF did not inform him or his staff about the route change.
BNSF spokeswoman Amy McBeth said in an e-mail that BNSF will be talking directly with the governor about his concerns. She did not say whether BNSF will consider halting oil trains during Target Field events, but noted that crude oil has been shipped along the corridor at lower volumes. [Wait until BNSF halts trains on the tracks leading into / out of Minneapolis for hours at a time.]
“BNSF has multiple routes in the metro area that we utilize for hauling a variety of commodities,” McBeth said. “Volumes and routes can fluctuate for a number of reasons. In all areas of the metro region where we move crude oil and other hazmat, we take a number of steps to reduce risk.”
The article does say that the governor's favorite fuel, ethanol, more volatile than Bakken crude oil, is also carried by these same trains through Minneapolis. Apparently the governor has no concern with ethanol by rail. Memo to self: google Minnesota ethanol production.
I did not read the entire article but I did not see any mention that had Minnesota expedited approval of the Sandpiper pipeline, Governor Dayton might not have had to write the letter, saving some paper and perhaps a tree. Meanwhile, the Sandpiper appears to be dead, keystoned by Minnesota officials. So the trains will continue.
Deep, deep in the article we learn that this monstrosity generates maybe 8 MW of electricity -- my hunch is that this is rounded up from five or six MW. At $45 million (the stated price -- again, it was probably rounded down and we don't know the on-going operating cost), that $45 million / 8 MW translates into an incredible $6 million / MW (rounded).
This stinky plant in Le Sewer, MN, is costing almost twice what a small solar farm would cost, or a small wind farm, and five or six times what a natural gas plant would cost.
At least everyone feels good, even if they don't smell good.
If that link breaks, google:
LE SUEUR, Minn. –
Nearly two years after going online, an innovative, municipally owned
power plant that burns methane from agricultural waste is generating
only a faction of its promised electricity.
The
$45 million plant, built partly with federal aid in this city 50 miles
southwest of Minneapolis, also is producing something its promoters said
it wouldn’t — stink.
More:
The plant, largely funded with municipal-backed bonds and $8 million in
federal aid, has generated controversy from the beginning.
My hunch is that the plant will not be operating five years from now. And those bonds? WHOOPS.
The more you read of that stinking article, the worst it gets:
Most methane plants reach 50 percent of their operating capacity in a few months. Yet not all have been a success. According to the U.S. Department
of Agriculture, 54 farm-based projects have been shut down, including
nine in Wisconsin. A manure-based plant in Dane County, WI, that
leaked liquid waste and emitted stinky hydrogen sulfide paid an $80,000
state penalty in July, court records show. [It appears Wisconsin has shut down more environmentally-unfriendly waste energy plants than there are fracking sand mines in the state. And all this time I thought folks who "fought" sand mines in Wisconsin were environmentally serious. My bad.]
You have to read to the very end of the article to find out how much this stinker actually produces:
Although the Hometown
BioEnergy plant is large compared with other biogas plants — 8 million
watts of output — it’s a small part of MMPA’s generating capacity, which
includes large natural gas-fired units. In 2014, the biogas plant
produced just 0.3 percent of the electricity MMPA supplied to the 12
cities that own the power agency.
One
of the goals of the project is to meet the state mandate for utilities
to get 25 percent of their electricity from renewable sources by 2025.
The plant produced 0.3 percent just to 12 cities -- it would be interesting to know the population it served. Le Sewer, home of the "Jolly Green Giant," has a population of about 5,000 (prior to the stink). The city cities on a county line and the combined population of the two counties is about 20,000 people. Minnesota state population is 5.5 million. 20,000 / 5,500,000 = 0.36%. Therefore, this stinky plant unlikely produced more than 0.001% of all the electricity consumed by residential customers in Minnesota.
As the Chinese say, a 1,000-mile trek starts with the first trek. The Chinese didn't say anything about stepping in poop to make that first step.
Later: after posting this story, a reader sent me additional information about how bad these "on-farm renewable energy science experiments" really are. It makes bird flu and hog farm run-off look tame in comparison. Sometimes I think the Saudis did us a favor dropping the price of oil to $30, and US frackers dropping the price of natural gas to $2.50 -- drive out these alternate energy projects which are simply awful.
I visited eastern Divide and western Burke counties last week. Nice to
see a 10-inch/0.365 wall/X42 pipeline construction crossing the county
line about 3 miles SE of Noonan.
This would be about 75 miles northeast of Williston, as the seagull flies. Assuming rodents with wings fly in straight lines.
The pipeline according to the reader:
The 46-mile pipeline will carry crude oil produced in the Fortuna area to the Basin Transload Facility located outside Columbus. The transmission line is capable of carrying up to 25,000 barrels per day and could eventually haul 50,000 barrels per day.
For more on this pipe, see US Steel. Just google: 10 inch/0.365 wall/X42.
Enbridge Energy’s plans for a new pipeline to carry
North Dakota crude oil across northern Minnesota got a major boost
Monday when an administrative judge concluded that the Sandpiper project
is needed — and that other proposed routes are not as good.
The
finding by Administrative Law Judge Eric Lipman is not the final word
on the $2.6 billion proposed pipeline. But it was a clear defeat for
environmental groups, which questioned the need, pointed to the risk of
spills and suggested six alternative routes.
**********************************************
CSX
CSX beats by $0.01, reports revs in-line; Increases dividend and announces $2 bln share repruchase : Reports Q1 (Mar) earnings of $0.45 per share, $0.01 better than the
Capital IQ Consensus Estimate of $0.44; revenues increases 0.5%
year/year to $3.027 bln vs the $3.01 bln consensus. Revenue was driven
by growth across many of CSX's markets and an improved pricing
environment, partially offset by the impact of low natural gas prices,
lower fuel recoveries and the strong U.S. dollar. At the same time, the
benefit of lower fuel prices and cost-saving initiatives more than
offset higher inflation and volume-related costs in the quarter.
The
CSX Board of Directors has approved an increase in the quarterly
dividend and a new share repurchase program. The 13 percent increase in
the dividend, to $0.18 per share, is payable on June 15, 2015 to
shareholders of record at the close of business on May 29, 2015.
The new, $2 billion share repurchase program is expected to be completed over the next 24 months.
Disclaimer: this is not an investment site. Do not make any investment or financial decisions based on anything you read here or think you may have read here.
*******************************
ObamaCare, Pharmaceuticals, and Hillary Converge
Wow, talk about a PhotoShopped "photo."
***********************************
Founding Fathers Blew It
They set a minimum age to serve as US President but failed to set maximum age:
Jeb: 64
Hillary: 69
Joe: 74
RR: 69 years 349 days
My hunch is that Hillary will pay Joe to enter the race just to make her look young.
Wells coming off confidential list yesterday and today have been posted. Link here.
Tea leaves: North Dakota oil production will take big "hit" in November (data will be released January 15, 2015); in addition to everything else previously reported, now it's the weather. From a weather forecast on Thanksgiving, the Bakken was going to get hit with another messy storm:
November 27, 2014, 1:15 pm CST Update: Light snow continues to spread across western and
central North Dakota this afternoon. At this time the heaviest snow is
located across northwest North Dakota at places like Williston, Tioga,
Stanley [also known as Bakkenland].
Messy and freezing: light freezing rain may mix in with snow later this evening
across the northwest. Light snow accumulations of less than an inch
along the SD/ND border to 3 inches along the ND/Canada border are
expected by the late evening hours.
It's starting -- it's being tweeted now -- Libyan rival prime minister says country might break up if recognized government in east forms its own state oil company.
Enbridge "needs" another Canadian-US pipeline. Whether or not it ever gets built, it tells me again, just how much oil there is in western Canada. Early indications: Minnesota prefers rail. The Dickinson Press is reporting:
The 1,031-mile Pipeline No. 3 would replace the company’s
1968-vintage Line No. 3, and would bring more Canadian tar sands crude
oil into the U.S.
The company hopes to have the $7.5 billion project underway in 2016 and completed by 2017.
But one has to chuckle. "Everyone" complains about old rusting pipelines and the need to upgrade all the rotting infrastructure across the US, but as soon as an oil pipeline company proposes to do just that, "everyone" comes out of the woodwork and yells, "not in my backyard. We meant somewhere else." And political leadership is afraid to call them on that.
Meanwhile, the Obama plan to power Africa seems to have been another shell game. Reuters is reporting:
The five-year plan has not yet delivered the power.
Power Africa has not measured its progress by counting
actual megawatts added to the grid but promises of additional power made
in deals it says it helped negotiate, according to sources inside the
project and documents seen by Reuters.
Some projects facilitated by Power Africa -- a program
operated by the U.S. aid agency USAID -- were under way years before the
scheme's inception, others are still in the planning stage.
It is unclear how much of the $7 billion Obama pledged has
actually been spent or if a further $20 billion in private sector
investment commitments will materialize.
"Saying you've met targets on projects that might never
happen or taking the credit for projects that have been worked on for
years makes me uncomfortable," a source working on Power Africa told
Reuters. "It's misleading."
Sort of like ObamaCare. Even Senator Schumer now recognizes ObamaCare for what it is.
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Second Autumn Event, 2014 -- Winter Storm Cato
First entries November 25 - 26, 2014
Albany, NY, breaks 1888 snowfall record with 6'7"
inches falling on Wednesday - Approximately 15 people reported
protesting in Ferguson, MO, as snow falls on area More than 48,000 New York customers without power due to snow storm Northeast: 730 flights canceled; 4,300 delayed More than 300,000 customers without power in New England due to snow storm 110,000 folks in Maine with no power, electricity -- November 27, 2014 Now has a name: Cato -- November 27, 2014 New weather storm to hit Pacific Northwest, Seattle, Portland -- November 27, 2014 Avalanche in Rockies in November -- November 27, 2014 110Kin Maine; 30K in Massachusetts; 195K in New Hampshire without power -- Nov 27, 2014 Minnesota coldest Thanksgiving since 1930 -- November 27, 2014 16K in Massachusetts remain without power; 15 inches of snow -- Nov 27, 2014 Earliest winter in decades sweeps nation -- November 27, 2014 To keep them warm in the White House: six kinds of pies for Thanksgiving -- Nov 28, 2014 133K in New Hampshire still without poweron Friday -- November 28, 2014
This story was on the local news last night, here in the Bakken, and now a reader sends me a link to the same story in The New York Times. It's a terrible, terrible story about all that North Dakota grain that is going to be dumped and lost because there is not enough rail to move the grain; too much oil has to be moved.
This is a great example of where the federal government and private enterprise could have worked together to prevent this problem in the first place. Remember: there are two ways to move oil economically out of the Bakken: pipeline and rail. Even now, the folks in Minnesota are creating all kinds of obstacles for Enbridge to get on with additional pipeline capacity.
Locally, I read stories of farmers tired of more and more pipeline being laid, and oil companies wanting to lay yet more pipeline.
But go to the linked story at The New York Times. Do a search for "800-pound gorilla." It's not there.
The story's lede:
FARGO,
N.D. — The furious pace of energy exploration in North Dakota is
creating a crisis for farmers whose grain shipments have been held up by
a vast new movement of oil by rail, leading to millions of dollars in
agricultural losses and slower production for breakfast cereal giants
like General Mills.
The
backlog is only going to get worse, farmers said, as they prepared this
week for what is expected to be a record crop of wheat and soybeans.
“If
we can’t get this stuff out soon, a lot of it is simply going to go on
the ground and rot,” said Bill Hejl, who grows soybeans, wheat and sugar
beets in the town of Casselton, about 20 miles west of here.
Although
the energy boom in North Dakota has led to a 2.8 percent unemployment
rate, the lowest in the nation, the downside has been harder times for
farmers who have long been mainstays of the state’s economy. Agriculture
was North Dakota’s No. 1 industry for decades, representing a quarter
of its economic base, but recent statistics show that oil and gas have
become the biggest contributors to the state’s gross domestic product.
This story is being reported at many sources. This one is from Reuters:
Enbridge Inc
said on Monday that Marathon Petroleum Corp agreed to
take a stake and become the main shipper on the company's $2.6
billion Sandpiper pipeline project, which will take crude oil
from North Dakota's Bakken field to U.S. refiners.
Enbridge, Canada's largest pipeline company, said in a
release that Marathon will pay 37.5 percent of Sandpiper's cost
in exchange for a 27 percent interest in the company's North
Dakota system.
The North Dakota Public Service Commission, a three-member panel that
oversees utility projects, said the pipeline is the biggest project yet
to move oil from the rich Bakken and Three Forks formations in the
western part of the state.
North Dakota has more than doubled its
oil production in the past two years, closing in on a million barrels of
oil a day. But due to the lack of pipeline capacity in the state, about
61 percent of the state’s daily oil production is being shipped by
rail.
Enbridge operates
about 50,000 miles of pipelines in North America, and several hundred
miles of pipelines in North Dakota, including one that runs between
Minot, N.D., and Clearbrook, Minn. The line, built in 1962, has the
capacity to ship 210,000 barrels of North Dakota crude daily, or about
8.8 million gallons.
Enbridge Energy officials said Tuesday that they want to drop part of
a proposed new pipeline route in Carlton County that had farmers and
rural residents upset.
Company officials said they will ask the
Minnesota Public Utilities Commission to consider a revised route for
about 1.5 miles of the proposed Sandpiper pipeline that would have
crossed undisturbed farm and woods in Carlton County.
Enbridge
wants the PUC to consider a new alignment that will follow existing
pipelines and then follow electric and gas-utility corridors for that
portion of the pipeline.
The news came after the Carlton County
Board voted 4-0 Tuesday morning to ask the PUC to back existing utility
lines as state regulators consider approving the proposed pipeline and
where it will go.
The first building of Dickinson’s major new retailers is beginning to look like the Menards store it’s going to be.
There
are three major commercial developments planned for Dickinson’s west
side, and while there are complete and near-complete hotels and
apartments on the site, Menards is the first retailer to break ground at
Roers’ West Ridge.
“We have several national retailers and
restaurants that have shown an interest in the city that, over the next
year, I anticipate them announcing that they will be coming to
Dickinson,” said Ed Courton, Dickinson’s community development director.
Big box stores can take nine months to a year to complete.
Directly
north of West Ridge is Pinecrest, Meyer Real Estate Group’s commercial
development, and on the south side of Interstate 94, along 30th Avenue
West is the 5 Diamond commercial development.
As proposed, these three developments will add up to 1.4 million square feet of retail to Dickinson, Courton said.
Beltrami County makes about $900,000 off Enbridge Energy each year,
but no more funds will be funneling into county coffers if the Canadian
company has its way.
Enbridge chose the route it prefers for the
proposed Sandpiper pipeline, and it does not run through Beltrami
County, which made just south of $1 million in property taxes off the
company in 2011.
“It’s mainly about winter construction costs,”
said Becky Haase, spokeswoman for Enbridge. With the proposed route,
taking a sharp turn to the south just west of the Beltrami and
Clearwater county line, those costs will be much lower, Haase said.
The
property taxes for the Sandpiper would go to the eight Minnesota
counties through which the pipeline will travel — a distance of 610
miles, with a price tag of $2.5 billion, according to Haase.
From west
to east, those counties are Polk, Red Lake, Clearwater, Hubbard, Cass,
Crow Wing, Aitkin and Carlton. With the existing pipeline, which runs
through Clearbrook, Bemidji and just south of Grand Rapids, the
Sandpiper would bring to 11 the number of counties carrying Enbridge
oil.
Easy come, easy go. I assume the Beltrami folks are happy to finally be rid of Enbridge. And the million bucks each year. Easy come, easy go. Be sure to thank your local environmentalist.
The Minot Daily News is reporting:
[Enbridge announces] .... completion of its Bakken Pipeline Expansion Project and Berthold Rail
Facility, along with starting its new Sandpiper Pipeline Project...
So, three stories there:
Bakken Pipeline Expansion Project completed;
Berthold Rail Facility completed; and,
ribbon-cutting for starting the Enbridge Sandpiper Pipeline Project
I follow pipelines of interest here, of which, the Sandpiper is one, and it's a huge one. The company is still working details in Minnesota.
A lot of interesting data in that article; the article explains why Bakken was trading at a discount to WTI earlier.
The Enbridge permit request for the Sandpiper project has been disapproved but Enbridge says that minor detail will not slow down its plans, or completion date. I guess Enbridge has not read the Keystone XL story. The Keystone XL foundered when folks figured out what "XL" stood for. As soon as I saw Enbridge use the phrase "unified system" it gave me the willies. US regulators are all concerned about "too big to fail." Enbridge would be better served to market the Sandpiper as a small but necessary pipeline, a backup pipeline in case of a terrorist attack by an American right-wing nut on existing crude oil pipelines and get the backing of Homeland Security. But I digress.
Some data points:
some (probably the folks at Clearbrook) say the role of the crude oil hub at Clearbrook, MN, would be lessened if the Enbridge Sandpiper is project approved/built
the Sandpiper hub at Superior, WI, would negate the need for the one at Clearbrook, MN
Sandpiper proposed capacity: 600,000 bopd
Sandpiper is part of Enbridge's Light Oil Market Access program, which would provide a unified system to carry crude from the Enbridge North Dakota system to a new connection with its Lakehead System at Superior
Two pipelines: a) $2.5 billion Sandpiper link from Beaver Lodge, ND, to Clearbrook, boosting capacity from 224K to 435K; b) the other, Clearbrook to Superior, initially at 375K
the report is a bit confusing, but it sounds like pipeline limitations "have seen deliveries from the Enbridge system at Clearbrook from about 93K bopd from 210K causing a decline in spot trading."
Bakken crude is being delivered to Clearbrook at less than half of volumes at the hub in mid-2012
a spokesman says crude is being delivered to Clearbrook mostly to protect pipeline space in case the market recovers
the article says Enbridge Energy Partners reported that Bakken volumes decreased 16 percent in 4Q12 from a year earlier due to rail shipment of crude oil
a rail shipper collects better netbacks than on pipe
CBR: $17 - $19/bbl to the Atlantic Coast
CBR: $13 - $16/bbl to the Gulf Coast
I could be wrong, but I believe pipeline is $2 - $5/bbl
CBR: accounted for 68% of Bakken production in January, 2013; 64% in December, 2012
Pipelines: 23% of Bakken production
Tesoro refinery in Mandan: 13% (the refinery: 58,000 bopd)
I still remember the anonymous comment I received months ago suggesting rail was temporary and a flash in the pan. Almost 70% of Bakken crude is carried by rail, and the percentage is higher when one removes the Bakken crude that stays in-state (Tesoro refinery), and despite all the pipeline being laid, the percent may be increasing.
The U.S. Federal Energy Regulatory Commission has blocked plans by
Enbridge Inc. for a massive new pipeline to carry oil out of North
Dakota’s fast-growing Bakken field.
In a decision released Friday,
FERC denied an application by Enbridge to set tolls, or costs to move
oil, through its $2.5-billion (U.S.) Sandpiper project. By blocking
those tolls, it has at best delayed the project, as Enbridge will now
have to present an alternative way to pay for the large new pipeline,
which would carry oil 603 kilometres from North Dakota to Minnesota.
And so it goes.
A number of companies involved in moving oil out of the Bakken had
loudly protested Enbridge’s proposed tolls. EnWest Marketing LLC told
FERC that “the amount of [Sandpiper] capacity was not necessary in view
of rail and pipeline alternatives.” Another protestor, WPX Energy
Marketing LLC, accused Enbridge of staging “an attempt to double the
price of transportation while receiving a risk-free guaranteed rate of
return.”
Others said the Enbridge proposal would force shippers to
shoulder the full extent of increased costs if Sandpiper is not filled
to capacity. They also argued that Enbridge sought to pay off the
pipeline in 15 years instead of the standard 30 and, they said, few
supported the project.
ONEOK may not have gotten sufficient shipper support to build its Bakken Crude Oil Express pipeline (going south) but Enbridge obtained enough support to go ahead with its Light Oil Market Access (LOMA) Program (going east to Canadian terminals and east to Chicago-area refineries).
The increased Enbridge capacity is designed to carry oil from the Bakken as well as from their Cardium and Viking formation production in Alberta (all light oil). Data points regarding new takeaway capacity program:
will deliver an additional 400,000 bopd to refiners in Ontario, Quebec, and Chicago-area refineries
will increase pipeline capacity on Enbridge's North Dakota regional system
will further expand US mainline system
will upgrade its Canadian mainline terminals
will expand its Eastern Access Program
$6.2 billion program; will enter service at varying dates between 2014 and early 2016
in addition, Sandpiper (North Dakota System): expand from 225K to 580K bopd
Sandpiper pipeline, 965 km; 24-in od, from Beaver Lodge, ND, to Superior, WI
Will twin Sandpiper's exisitng 210K bopd North Dakota System mainline by adding 225K between Beaver Lodge, ND, and Clearbrook, MN; 375K bopd between Clearbrook, MN, and Superior, WI; cost of the Sandpiper existing line: $2.5 billion
Beaver Lodge is the oil field where the first oil well in North Dakota was discovered; south of Tioga;
expand Eastern Access Program: full reversal of Line 9 to ship Bakken and western Canadian crue to refineries in Ontario and Quebec; add 80K bopd capacity at Ontario and Quebec
Eastern Access Program also includes expansions between Griffith, IN, and the US-Canadian border near Sarnia, Ontario
Eastern Access Program expansion estimated at $3.2 billion, including the $200 million Toledo Pipeline expansion
Subtotal: $3.2 billion
Also announced earlier:
a 265 km, 24-in od, Southern Access Extension Pipeline from Flanagan, IL, to Patoka, IL; estimated $800 million; initial capacity will be 300,000 bopd; contract for supply will be Marathon Petroleum
Enbridge could increase capacity if demand is warranted (additional horsepower or increasing od to 30 inches
Subtotal: $0.8 billion
Chicago-area refineries have shifted interest to Bakken and Canadian light oil
Enbridge will expand its US mainline Lakehead System between Flanagan, IL, and Griffith, IN; will build a 122 km, 36-in od twin of its existing Line 62; initial capacity of 570K bopd; $500 million
will also increase capacity of its 42-in od Line 61 from Superior, WI, to Flanagan, IL, to its full 1.2 million bopd; $1.3 billion
Enbridge plans to expand its Canadian mainline terminals to accommodate the additional light oil volumes and expand flexibility.
Total, although I may have missed something or double-counted (full details are at the link): $14.5 billion?
When I saw this I thought:
CLR may be the face of the Bakken, among producers, but Enbridge is the face of the Bakken among the pipelines. Of course, ONEOK is the face of the natural gas producers in the Bakken.
Note how Enbridge is "twinning" new pipeline with existing pipeline. It begs the question why TransCanada refused to "twin" its Keystone XL pipeline along the original Keystone pipeline; the argument that it was the shortest distance seems a bit lame after all the delays and even the possibility of being "killed" again. Enbridge, meanwhile, keeps picking up "shipper support."
February 7, 2014: the Sandpiper will "deviate" around DevilsLake in North Dakota, because...
Mark Curwin of Enbridge Energy said, "Well there's a large water body there
and it makes sense frankly as your route pipelines to try and stay away
from population centers as well as significant natural resources."
March 22, 2013: US regulatory agency (FERC) denied ENB permit for Sandpiper. Sounds like competitors and users were able to convince the FERC not acceptable; ENB said later it would not slow down completion of Sandpiper; apparently plans to renew permit request to meet objections of users, competitors (rails).
.... light crude production in North Dakota’s Bakken shale play has
climbed 250 percent to 700,000 barrels per day, and could grow to as
much as 1.2 million barrels per day in five years.
Enbridge’s future North Dakota feeder system project, known as the
Sandpiper Project, will cost $2.5 billion and is expected to be in
service in early 2016. The company said it expects the light crude
takeaway capacity at the Bakken play to grow from 225,000 barrels per
day to 580,000 barrels per day.
The 24-inch diameter pipeline will expand 600 miles from North Dakota to a mainline system terminal in Wisconsin.
November 4, 2012: The Dickinson Press has an update on the Sandpiper pipeline, proposed pipeline from Tioga, ND, to Superior, WI, but I don't see anything new in the article.
The route is yet to planned but will probably parallel Enbridge's main line in the area.
Enbridge is in the early planning stages for the Sandpiper Pipeline,
which could transport about 225,000 barrels per day, said Katie
Haarsager, community relations adviser for Enbridge.
Enbridge’s current capacity in North Dakota is 275,000 barrels per day.
By
the first quarter of 2013, it’s expected to expand to 425,000 barrels
per day with the completion of the Bakken Expansion Program.
The
Sandpiper Pipeline would be Enbridge’s largest project in North Dakota,
but its size is not uncommon when compared to other Enbridge projects
nationwide, Steede said.
$3 billion in private money allocated to laying pipeline
75% of oil is now trucked from well-heads in North Dakota
eight pipeline companies in the Bakken
The story mentions Enbridge's Sandpiper which I noted a few weeks ago in a posting.
One large project, called Sandpiper, described by Mike Moeller,
director of Enbridge's North Dakota operations, would ship Bakken oil
into a terminal at Clearbrook, Minn., 90 miles east of Grand Forks, and
then pipe it on to Superior, Wis., where it would connect to other
pipelines heading east and south.
And this is new to me:
Yet another proposed pipeline costing up to $1.8 billion would
transport Bakken crude 1,300 miles south to Cushing, Okla., another
major terminal. The builder, OneOk, also plans a separate line that
would be the first out of the Bakken field dedicated to carrying the
valuable liquid components stripped out of natural gas.
November 7, 2025: officials approve WMB-NG pipeline into NYC and Long Island. WMB has scrapped plans after originally being disapproved by same officials. Link here. Called the NESE Pipeline -- the Northeast Supple Enhancement project -- NESE for short.
August 21, 2025: MDU wins the lottery: link here. A $500 million guarantee to build a new pipeline from the Bakken to the Red River of North Dakota.
February 22, 2025: KMI, Hiland, Outrigger deal closed. Link here.
PennEast Pipeline Co. said that although it received federal approval
for the 116-mile pipeline from Luzerne County to Mercer County in New
Jersey and some permits, it has not received water quality certification
and wetlands permits required under the Clean Water Act.
November 6, 2018: Voyager Pipeline proposed. Cushing to Houston; perhaps Corpus. Would ultimately connect Bakken directly to Gulf Coast refineries, export terminals.
September 18, 2018: Iowa Supreme Court has heard both sides for/against the DAPL. We will get judgment in four to six weeks. Very, very bad news. To say the least.
February 28, 2018: update on Enbridge Line 3 over at SeekingAlpha. This has dragged on so long, I had completely forgotten about it. I'm not holding my breath on this one. Pretty frustrating.
May 16, 2017: there are reports suggesting that oil is now flowing through the DAPL. Also, a third lawsuit against the DAPL asking for a court injunction to stop the flow has been filed within the last 24 hours.
August 12, 2016: how others see the Dakota Access Pipeline, a pipeline that is only 7 miles shorter than the Keystone XL would have been. Mother Jones has a nice overview. August 5, 2016: update on the Bakken Pipeline System -- the Dakota Access Pipeline from North Dakota to Illinois via Iowa; and the Energy Transfer Crude Oil Pipeline from Illinois to Texas; funding complete; calls Sandpiper into question
October 28, 2014: update on new Bakken pipeline. ETP to take pipeline from the Bakken, through South Dakota, through Iowa, to Illinois (the Dakota Access Pipeline); and then a second pipeline from Patoka to Nederland, Texas. First mentioned at the blog by RBN Energy.Update at BizJournals:
Energy Transfer Partners announced a joint venture with Phillips 66 to build two pipelines to move crude oil out of North Dakota (75% / 25% respectively). Dakota Access Pipeline (DAPL) from the Bakken to Pakota; ETP Crude Oil Pipeline (ETCOP) south from Patoka.
April 4, 2013: Harold Hamm to build the Double H pipeline, should be on-line by August, 2014. $300 million. Initially 50,000 bopd; to reach 100,000 bopd. Dore, ND, to Baker, MT; joins the Butte Pipeline south to Guernsey, WY; new pipeline from Guernsey down to Tallgrass Pony Express pipeline (converted from natural gas to crude during this time period); to Cushing, OK.
August 30, 2012: Enterprise Products offering additional capacity on ATEX Express
ethane pipeline: Co announced the start of a
binding open commitment period to determine additional shipper demand
for capacity on the partnership's Appalachia-to-Texas ("ATEX Express")
pipeline. The 1,230-mile system will deliver growing ethane production
from the Marcellus/Utica Shale areas of Pennsylvania, West Virginia and
Ohio to Mont Belvieu, Texas. [See January 23, 2012, entry.]
June 8, 2012: EPD has begun accepting deliveries for and commissioning the first phase of its Eagle Ford crude oil pipeline between Wilson County and Sealy, TX.
A project that beefs up pipeline capacity to move crude from the U.S. Midwest to the world's largest refining market by Enbridge Inc. and Enterprise Products Partners LP is set to lift heavily discounted U.S. oil prices but won't boost even cheaper Canadian barrels, Enbridge chief executive Pat Daniel said Tuesday.
The more than doubling of a previously planned expansion of the Seaway pipeline between Cushing, Okla., and the Texas Gulf Coast,
announced by Enbridge and Enterprise Monday night, will eat away at
stockpiles of crude in the Midwest to bring U.S. oil prices closer in
line with global barrels, but will not reduce Canada's reliance on one
customer - the United States, Daniel said.
Calgary-based pipeline operator Enbridge has launched projects to add 10,000 barrels per day of rail oil capacity to its Clearbrook terminus by July, with another 70,000 barrels per day planned by 2013.
Simmons forecasts the congestion may see some relief in May, when Enbridge and Enterprise Products Partners begin to fill their reversed Seaway Pipeline, from Cushing, Okla., to the Gulf Coast, which will require two to three million barrels of capacity.
delivering ethane production from the Marcellus-Utica shale areas of Pennsylvania, West Virginia, and Ohio to the US Gulf Coast. ATEX Express will transport as much as 190,000 b/d from Appalachian production areas to EPP’s storage and distribution assets in Texas.
Originating in Washington County, PA, the system’s first leg would involve construction of about 595 miles of new pipeline extending to Cape Girardeau, MO, closely paralleling an existing Enterprise pipeline. At Cape Girardeau, EPP will reverse a 16-in. OD pipeline and place it into ethane service.
At the southern terminus of the ATEX Express pipeline, EPP will build a 55-mile, 16-in. OD pipeline providing access to its NGL storage complex at Mont Belvieu, TX. Expected operational date: 1Q14.
December 9, 2010: Keystone XL hearings in Nebraska.My hunch is the Keystone XL pipeline will not be completed in my investing lifetime. Any state from Montana to Oklahoma can scuttle the deal; and even if the states allow it, getting the necessary rights of way will take forever in light of recent Gulf of Mexico spills.
July 20, 2010: Kinder Morgan to go public; Questar to spin off its E&P division, QEP; TransCanada Pipeline delivers its first oil to Chicago; TransCanada Keystone XL project on track but political issues may cause delays.
May 5, 2010: Enbridge's Alberta Clipper project on-line, April 1, 2010.
... the 85-mile Four Bears pipeline
through McKenzie, Dunn and Billings counties in western North
Dakota later this year, according to state Public Service
Commission filings.
The proposed line is intended to connect with three pipeline
networks that supply crude to the Tesoro Corp. refinery at Mandan,
and to refineries in Minnesota and Wyoming.
January 5, 2010: ENB upgrade completed; ND still short on capacity. Actually, it's EEP -- EEP's principal crude oil system is the largest transporter of oil production from western Canada. The system's deliveries to the United States account for approximately 11 percent of total U.S. oil imports.
December 1, 2009: EPD bought another pipeline, probably small news item in the big scheme of things, but linked here just to be complete. The pipeline originates in Odessa, west Texas, and 265 miles later connects with a Pemex pipeline at the Mexico-US border near El Paso. EPD is NOT in the Bakken.
October 14, 2009: ENB: 52-week high; pays 3.5%. Compare with money market funds. Nice Barron's article on ENB, T. 2010 Guidance Conference Call scheduled for December 2, 2009.
November 3, 2009: EEP: $0.99/share payable November 13 for those holding the shares November 5, 2009. Ex-div: November 3, 2009. Pays 8.3%. I use EEP as a place to hold funds while deciding what to buy. If dividend looks questionable, will look for other high dividend payers in the oil patch.November 28, 2009: In addition to the 570 new wells requested by EOG in case 11939, I count about 241 additional wells by EOG and other producers.
Note: until this month, I had never paid attention to "dockets." It turns out that a docket with 19 pages is not unprecedented. The July 21, 2009, docket had 19 pages, and in that same month (July 29, 2009), there was another docket with 14 pages. In 2009, there were an average of 18 pages of requests if one excludes the month of July. In July, there were 39 pages of requests, total. The number of pages by month shows a trend: Jan (16 pages); Feb (14); Mar (13); Apr (14); May (16); Jun (15); Jul (39); Aug (24); Sep (18); Oct (21); Nov (28); and, Dec (29). This continues to validate my hunch that 2010 is going to be a watershed year for the North Dakota oil industry if oil stays above $70/barrel. CLR has hedged 5,000 bopd for $80 between January and July, 2010.
For investors, I think the pipeline companies are going to be able to charge a surcharge to transport all the oil that will be produced.
November 4, 2009: The Mountrail County Promoter states that North Dakota, already the 4th leading oil producer in the United States, would produce more oil if pipeline capacity was adequate. The writer notes that there is talk of two more pipelines in the Stanley area: one would take oil into Canada and then back into the states through another pipeline; and the second additional pipeline would take oil out of the local area. I have opined elsewhere that one starts to get the feeling that the Williston Basin could become another "Tulsa" over the next two decades.
*****
Pipeline, The Ventures (I couldn't resist.)
*****
American Pipelines
Morgan Kinder to go public in 2010.
ENB, EEP, EEQ (family): ENB and EEP are my favorite (as noted below, I don't follow EEQ). I have ENB as a long-term hold, and I trade in and out of EEP for the distribution. Stand-alone page.
STR: Questar -- an E&P company but a conglomerate focused on energy; one of its five core competencies is pipeline. Might be a better alternative to MDU during current recession. March 9, 2010. Questar will spin off its E&P division at end of July, 2010: QEP.
MDU: If interested in pipelines, this is a very interesting play. Safe, conservative, Fortune 500, nice dividend, particpating in the Bakken in many ways. Has had some tough quarters during the 2008 - 2010 recession; I used to hold / accumulated shares, but sold all my MDU during the recession. Switched to ENB and EEP.
EPD: not in North Dakota, as far as I know, but I follow and often invest in due to high dividend and good outlook. [With the June 24, 2014, announcement, EPD will now be building a pipeline in North Dakota.]
