BISMARCK, N.D. (AP) — The North Dakota Industrial Commission has sent a letter to federal regulators in support of a proposed $2.6 billion pipeline that would move North Dakota oil to Minnesota and Wisconsin.
Calgary, Alberta-based Enbridge Energy is proposing the 612-mile Sandpiper pipeline to carry 225,000 barrels of oil daily to a hub in northern Minnesota and 375,000 barrels to one in northwestern Wisconsin. If approved by state and federal regulators, it would be the largest pipeline moving oil out of North Dakota, the nation's second-leading producer of oil behind Texas.
The Industrial Commission, which regulates oil and gas development in the state, sent the letter Monday supporting the project to the Federal Energy Regulatory Commission, which regulates the interstate transmission of oil, natural gas and electricity. Gov. Jack Dalrymple, Agriculture Commissioner Doug Goehring and Attorney General Wayne Stenehjem — all Republicans — make up the state commission.
"Projects like Sandpiper will provide reliable and efficient transportation access to diverse downstream markets, potentially resulting in better crude oil prices and increased revenues to all parties," the letter said.
Enbridge obtained shipping commitments last month from oil companies to use the pipeline. The company said in federal filings with the Federal Energy Regulatory Commission that it has received enough shipping commitments from companies to move forward with the project.
North Dakota has more than doubled its oil production in the past two years, closing in on a million barrels of oil a day. But due to the lack of pipeline capacity in the state, most of the state's daily oil production is being shipped by rail. A barrel is equivalent to 42 gallons.
Enbridge's filed its application to federal regulators in November and says the project is "needed and in the public interest." Enbridge says it hopes to place the pipeline in service in 2016.
Enbridge also has filed applications for the project with regulators in North Dakota and Minnesota.
North Dakota's portion of the pipeline is 299 miles. North Dakota's Public Service Commission is reviewing the company's pipeline application and held three public hearings last month along the pipeline's proposed route in North Dakota.
Enbridge operates about 50,000 miles of pipelines in North America, and several hundred miles of pipelines in North Dakota, including one that runs between Minot, N.D., and Clearbrook, Minn. The line, built in 1962, has the capacity to ship 210,000 barrels of North Dakota crude daily, or about 8.8 million gallons.
Much of the proposed pipeline's route follows existing pipeline corridors, and 96 percent of the required right-of-way easements have been obtained from North Dakota landowners, the company has said.