Refinery ramps up: Dakota Prairie Refining begins producing fuel from Bakken crude oil

April 02, 2015
Forum News Service
Amy Dalrymple,

WILLISTON, N.D. – North Dakota sends more oil by rail to East Coast refineries than all other areas of the country combined, says new data from the Energy Information Administration.

The United States now ships more than 1 million barrels of oil per day by rail, with the Bakken accounting for about two-thirds of of it, compared with 55,000 barrels per day in 2010. The shipping increase, said the federal agency, is more than a 1,700 percent increase, including some shipments to Canada.

Rail shipments of Bakken crude to the East and West coasts have steadily increased while rail shipments to Gulf Coast refiners have declined, the EIA information shows.

North Dakota officials have known that more and more oil is heading by rail to coastal refineries, particularly the East Coast, but complete details had not been available before. The EIA compiled the data released this week using information from the U.S. Surface Transportation Board, Canada’s National Energy Board and EIA survey data.

“This is the first time we’ve had some hard data to look at and confirm that,” said Justin Kringstad, executive director of the North Dakota Pipeline Authority.

In January, producers in the Bakken shipped an average of 437,000 barrels of oil to East Coast refineries by rail every day, or roughly the equivalent of 6½ trains each day.

West Coast refineries received an average of 171,000 barrels a day of Bakken crude by rail, or about 2½ trains, in January.

Market conditions are the primary reason that Bakken crude heads east and west as producers look for the best price for their barrels, Kringstad said.

The East Coast, a major consumer of crude oil with refineries set up for the Bakken’s light, sweet crude, lacks pipelines to transport the crude, he added.

Gulf Coast refineries received about 57,000 barrels per day of Bakken crude by rail in January, the EIA data shows. Bakken crude had been heading by rail to the Gulf Coast in much higher quantities in the past, hitting a peak of more than 290,000 barrels per day in March of 2013.

Kringstad said the combination of rising oil production in Texas plus new pipelines contribute to that trend.
Midwest refineries received about 40,000 barrels per day of Bakken crude by rail in January, and Canadian refineries received about 28,000 barrels per day by rail.

The volumes shipped by rail from the Bakken to Canada tend to fluctuate widely from month to month, the EIA data shows.

More than 730,000 barrels of oil, enough to nearly fill 11 trains a day, left the Bakken in January.

North Dakota shipped 58 percent of its crude by rail in January, according to the North Dakota Pipeline Authority. That percent, which had been as high as 75 percent last year, varies each month depending on market conditions.