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Oil spill puts North Dakota back in the spotlight

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North Dakota Health Department/AP/File

(Read caption) A vacuum trucks cleans up oil in near Tioga, N.D. State regulators are scrambling to assess what went wrong when at least 20,000 barrels of oil spilled from a ruptured pipeline in rural western North Dakota.

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Oil production in North Dakota reached an all-time high in August. As of 2011, the U.S. Energy Department said the state was the fourth largest in the union in terms of oil production and North Dakota's oil accounted for 7 percent of the U.S. total, a 35 percent increase from the previous year. The state's Department of Mineral Resources said most of that crude oil would be able to make it to regional refineries so long as rail deliveries continue on their current trajectory. Scrutiny over crude oil deliveries by rail and the first major pipeline spill in the state, however, may dampen some of the state's optimism.

The North Dakota Industrial Commission, a division within the Department of Mineral Resources, published its monthly "director's cut" this week. Director Lynn Helms said 95 percent of all drilling in the state targets the Bakken and Three Forks formations. In April, the U.S. Geological Survey said those formations, spread out over North Dakota, South Dakota and Montana, contain a mean 7.4 billion barrels of undiscovered, technically recoverable oil. By August, the NDIC said production in the state reached 911,242 barrels per day, an all-time high. (Related article: North Dakota Farmer Stumbles on Massive Oil Leak)

North Dakota's shared border with Canada makes it a strategic state for North American crude oil transportation. Though the much-lauded Keystone XL pipeline from Alberta would sidestep North Dakota, there are more than 2,000 miles of pipeline under construction in the state at the heart of the U.S. shale boom. NDIC director Helms, however, said crude takeaway may depend in part on rail. 

"Crude oil take away capacity is expected to be adequate as long as rail deliveries to coastal refineries keep growing," he said.

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