This brief, by the AP out of Tulsa, was above-the-fold news in this morning’s Bismarck Tribune:
"A proposed $1.8 billion oil pipeline from North Dakota to Oklahoma has been called off because the company behind the deal couldn’t rally enough commitments to transport its oil.
"Tulsa-based Oneok Partners LP announced Tuesday that the Bakken Crude Express Pipeline, which was to stretch from Stanley, N.D., to Cushing, Okla.,won’t be built. Construction was expected to begin in 2013.
"Oneok said the outlook for crude oil supply is robust but it could not get enough producers to promise long-term use of the 1,300-mile pipeline.
"The company said it still has up to $4.8 billion of announced natural gas and natural gas liquids projects under way and many of them are in the Bakken Formation in Montana and North Dakota.
“Oneok said the pipeline would have moved 200,000 barrels of oil out of the Williston Basin in the Bakken Formation.”
That oil, or a good part of it, will sure look good in tankers pulled by BNSF and CP!
The question seems to be is this termination to any increase in length of the Keystone Pipeline?
OR is this another different pipeline? Built on a completely di9fferent track from Cushing, Okla. North to the Dakotas?
OR is this pipeline to incorporate the already built Keystone pipeline from Cushing, Oklahoma to its current terminus (Nebraska?)
The Keystone pipeline has already been partially completed from the area of Cushing, Ok Nort to a point somewhere areound Nebraska(?) (It runs through this area about 10 miles East of here).
The reason that Cushing, Okla. is so important *( it is a current price point for the existing supply network for Curde Oil Pricing and distribution in the middle of the C
This pipeline is not part of the Keystone XL project which is being promoted by TransCanada Pipeline. This pipeline promoted by Oneok Partners (pronounced One Oak) was to be known as “Bakken Crude Express”. A partial reason for the lack of commitment may be that it was destined for Cushing, OK rather than the Gulf Coast, though by the time it was to be completed there should have been enough additional capacity from Cushing to the Gulf to eliminate the glut at Cushing.
There is still a lot of opposition to the transcanada project due to the potential issues with the aquifer which so many farmers and municipalities use for fresh water.
The proposed route was rerouted around the Ogallala aquifer, and IIRC the revised plan has been resubmitted to the state of Nebraska, and is working thru the process. I had the reference in a previous thread.
Concur. Or, “The Emperor [pipeline] has no clothes”. Once again, I’ll note that John Kneiling often said that a properly run integral train system could “stop pipeline expansion cold” - and we’re not even close yet with that kind of efficiency. I hope that rail managements and bulk shippers in general wake up and realize that the rail mode still has a lot of unused potential, and start to take advantage of it more often.
More practically, this also says that the oil producers are more willing to take their chances on the ‘spot’ markets in the future and having to find and pay for ad hoc transportation to them, rather than committing to a single pipeline and market for many years, and perhaps tying up a lot of capital or at least impairing their balance sheets with a long-term “take or pay” commitment to the pipeline operator.
Kind of like one of us deciding that for our personal transportation, we’ll rely on a strategy of call and take a taxi, or else get a short-term rental car, whenever we need to go someplace, rather than paying $20,000 or so to puchase and own a car and then also having to pay for gas, insurance, licenses, etc. the year round in the meantime.
For some of you folks not so familiar with rail in this part of the country:
The line under immediate discussion is the old Northern Pacific between Laurel, Mont., and Dilworth, Minn. With the advent of Burlington Northern, in 1970, it was relegated to basically a coal branch (for Powder River Basin coal), with “grain in season.”
With increasing pressure on the “High Line” (former Great Northern) today, due in part to this same oil, some High Line business, including some double-stack, has been diverted to the old NP, to the extent that this line is looking more like its former diversified self. Nice to see.
A few years ago, Berkshire created a new class of stock to avoid the high stock price problem. The “B” stock is designed to sell at 1/1500 of the price of the “A” and carries 1/10000 of the voting rights. Recent quotes are $131,600 per share for the BRKA and $88.08 for BRKB.