ND Energy Leaders Hope To Move Oil Transportation Away from Trucks | Video

Michelle San Miguel | 11/29/2011

Last month North Dakota surpassed last year`s record oil production. And there are no plans to slow down. Most of the state`s oil is transported within North Dakota by truck. But energy leaders are working to change that.

Fewer trucks will eventually be spotted around oil country. As the state reaches production levels of about half a million barrels of oil a day, the means to move that oil needs to keep pace, too.

"In order to keep our roadways safe, in order to make sure we can move our crude oil production during wet spring conditions, during winter blizzards, if we can get that crude oil put into a pipeline, it`s a safe method," said Justin Kringstad, North Dakota pipeline authority director.

Kringstad says pipelines are the cheapest and safest method of moving oil. 75 percent of the state`s oil is transported to market by truck; the other 25 percent is moved by pipeline and rail systems. But Kringstad says that`s quickly changing.

Kringstad said, "The challenge that the pipeline industry is facing is understanding how large this play is gonna get in the coming years.

But the oil industry knows it`s growing, which is why in the next year, five more rail locations will be added to move oil out of North Dakota.

But with more oil comes a bigger need to process and refine it. And with only one refinery in the state, Dakota Oil Processing feels the need to add its own. That`s why it`s finalizing plans to build one by Williston that would refine about 20,000 barrels of diesel a day.

"We want to make sure that the oil stays in the state, if possible. Right now we`re paying transportation both ways. We`re sending the oil from the Houston area, we`re paying for that. We`re paying for the diesel coming back. Therefore, we`re paying twice," said Dakota Oil Processing Operations Director Mel Falcon.

Plans for the refinery still need to be approved by the state, but Falcon`s hopeful that it will.

The amount of oil transported out of North Dakota by pipeline is expected to more than double by 2015.

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