The natural gas liquids pipeline proposed for Eastern Montana sounds like a win-win for our state and neighboring North Dakota.
The $1.4 billion Oneok Inc. pipeline announced last week would run from a point near Sidney south through Montana and Wyoming before turning southeast through Colorado to terminate in central Kansas. Altogether, the pipeline would stretch 900 miles.
Oneok, based in Tulsa, Oklahoma, says the Elk Creek pipeline would have a capacity of carrying 240,000 barrels per day from Oneok’s terminal near Sidney to Bushton, Kansas. The pipeline will be designed so that its capacity could be boosted to 400,000 barrels per day with additional pumping facilities.
The Elk Creek pipeline would follow the same route as existing natural gas liquids pipelines that already operate at capacity.
According to Natural Gas Intelligence online, the proposed pipeline already has 10-15 year contracts to transport 100,000 barrels per day. This pipeline is expected to be operational by the end of 2019. It would be part of $3.5 billion in capital projects that Oneok has in development.
It’s not immediately clear what economic impact the pipeline would generate in construction jobs or Montana tax base.
The 20-inch pipeline is too small in diameter require permitting under Montana’s Major Facility Siting Act, according Department of Environmental Quality spokeswoman Kristi Ponozzo. The law requires a review of pipelines with an inside diameter of 25 inches or larger. She said the pipeline project may need permits for storm water detention and stream crossings, but Montana DEQ hasn’t yet received requests for such permits.
The Elk Creek pipeline still needs federal, state and local approvals, according to the Bismarck Tribune.
By increasing pipeline capacity, the new project should also decrease waste and pollution from oil production. Oneok President Terry Spencer said the Elk Creek pipeline is “critical to meeting the needs of producers who are increasing production and are required to meet natural gas capture targets in the Williston Basin.”
Additional pipelines are needed to transport natural gas liquids (ethane, propane and butane), Justin Kringstad, director of the North Dakota Pipeline Authority, told the Bismarck Tribune. Current production of 400,000 barrels of natural gas liquids per day exceeds pipeline capacity, so more than 40,000 barrels per day are transported by rail.
Kringstad projects that production will in increase to as much as 1 million barrels per day by 2030.
The Bakken oil industry flared more than 320 million cubic feet of natural gas in October, according to the North Dakota Department of Mineral Resources. The industry still met its overall goal of capturing 85 percent of Bakken gas produced, but 11 companies didn’t. Producers will be required to meet higher capture targets later this year.
Although pipeline capacity is crucial to reduce flaring, the industry also needs additional natural gas gathering pipelines and processing facilities, Kingstad told the Bismarck Tribune.
Despite rules introduced in 2014 to reduce flaring, the volume actually has increased in the Bakken in recent months, according to news reports quoting North Dakota officials. As explained by the Associated Press, energy companies "flare," or burn off, vast amounts of natural gas at drilling sites because it is less profitable than oil. North Dakota's nighttime flaring is visible in NASA photos from space. The primary gas burned off during flaring operations is methane, a contributor to climate change.
The Elk Creek pipeline will add critical infrastructure to improve both gas production and air quality as the Bakken continues to generate energy for America.