BISMARCK-Two major oil and gas projects approved Wednesday by the North Dakota Public Service Commission aim to improve pipeline safety, meet local demand for diesel and reduce natural gas flaring in the state.
Commissioners approved a project from Cenex Pipeline LLC that will upgrade a portion of a refined fuels pipeline in northwest North Dakota that was built in 1960. However, the company does not have easement agreements to begin construction along 22 percent of the pipeline route.
Also Wednesday, commissioners approved the Arrow Bear Den gas plant near Watford City to process growing volumes of natural gas in the core of the Bakken.
Commission Chairman Randy Christmann said the two projects combined total more than $250 million in economic activity for the state.
The pipeline owned by Cenex, a subsidiary of CHS, transports refined fuels such as gasoline and diesel from Laurel, Mont., to Fargo. The company proposes to upgrade 182 miles from Sidney, Mont., to Minot, replacing an aging pipeline while also increasing capacity to meet customer demand.
Commissioners Julie Fedorchak and Brian Kroshus voted to approve the project, noting the company can't start construction in areas where easement agreements have not been signed.
"It's an important line that is critical infrastructure for our state and for our economy," Fedorchak said.
CHS spokesman Bryan Brignac said the company needs easements from landowners who own 22 percent of the pipeline route in North Dakota. The company continues to engage in "productive discussions" with landowners to get voluntary agreements, he said.
The pipeline crosses about 150 miles in North Dakota through Williams, Mountrail and Ward counties.
"CHS considers the use of eminent domain or condemnation to be an absolute last resort for this project," Brignac said.
The company has not been granted permission to survey about 1 mile of the pipeline route, Brignac said. If the pipeline needs to be rerouted to avoid that mile, the company has surveyed and received permission for a reroute, he said.
Bismarck attorney Derrick Braaten, who represents several landowners who have not yet signed agreements with the company, called it "problematic" for the Public Service Commission to approve the project without more voluntary easements.
"If they don't have voluntary easements for a large portion, it puts a significant amount of pressure on landowners," Braaten said.
The pipeline crosses the Missouri River in Montana and the Little Muddy, White Earth and Little Knife rivers in North Dakota. The company said during a public hearing in July it plans to use horizontal directional drilling to bore at least 50 feet below the bed of the Missouri and at least 20 feet below the other rivers.
Fedorchak noted the company will install pipeline valves at each river crossing, implement a comprehensive leak detection and monitoring system and take other steps to protect the environment.
Construction is expected to begin sometime in 2018 and be complete sometime in 2019, Brignac said.
"This pipeline is a vital asset and the primary resource for the delivery of diesel and gasoline to the farmers, ranchers and rural communities of North Dakota," Brignac said.
Christmann recused himself from voting on the pipeline because the route crosses land owned by his wife's family.
The three commissioners voted unanimously to approve the Arrow Bear Den Gas Processing Plant II, which will process up to 120 million cubic feet of natural gas per day about 7.5 miles southeast of Watford City.
The owner, Arrow Field Services, a subsidiary of Crestwood Midstream Partners, already operates a smaller plant at the same location that processes 30 million cubic feet per day.
The expanded plant will process gas from the nearby Fort Berthold Reservation, where natural gas flaring rates have been higher than the rest of the state.
Kroshus said this plant and other projects that are proposed will help the state move in the right direction to capture more natural gas and reduce flaring.
North Dakota operators flared or burned off about 310 million cubic feet of natural gas per day in January due to inadequate infrastructure.