North Dakota governor pushes for more pipeline capacity

July 2, 2014

Located over a large swath of the Bakken shale deposit, North Dakota has been home to a significant amount of oil and gas development during the past few years. Increasing production levels have been good for the state, providing an influx of high-paying energy sector jobs that have driven the unemployment rate down to an impressive 2.6 percent—far lower than the national average.

To support this growth, North Dakota Governor Jack Dalrymple wants to expand oil pipeline capacity within the state.

According to an article on Oil Price, North Dakota's Department of Mineral Resources estimates that total oil output in the state averaged about 1 million barrels per day in April. However, state pipelines are only capable of supporting 780,000 barrels per day. Dalrymple wants to see that capacity increased to at least 1.4 million barrels per day by 2016.

Of course, there is risk involved in either case. If pipeline capacity is strained, there is a growing possibility that leaks could lead to major spills. On the other hand, that chance increases any time the overall amount of oil moving through the state goes up.

Some organizations argue that the use of pipelines should be brought into question. Though the transportation of oil by rail has already been scrutinized due to several high-profile accidents, one group, the Friends of the Headwaters, claims that pipelines spill more oil by a factor of 10 to 1.

This doesn't necessarily mean that the state should shy away from allowing more pipelines to be built. However, project stakeholders should work with an environmental consultant to ensure the safety of pipeline projects.