Plunging oil prices have made North Dakotans nervous about the future of the oil boom. But you know who isn’t nervous? TransCanada, the folks behind the uber-controversial Keystone XL pipeline the approval for which Congress just sent to President Barack Obama for his likely veto.
It seems the Canadian-based company would like to build another pipeline across the international border, this time specifically to bring Bakken crude oil up into Canada.
The company expects to announce the $600 million Upland Pipeline Project proposal in its earnings report on Friday, the newspaper reported.
The project aims to transport up to 300,000 barrels a day of North Dakota crude to a connection in Saskatchewan and on to TransCanada’s planned Energy East pipeline, the Journal reported, citing an unnamed source.
This is a big deal.
How big? To put the pipeline’s capacity into perspective, consider that at last measure the current daily output of the North Dakota oil fields is about 1.187 million barrels per day. Meaning this pipeline, running at full capacity, could take about 25 percent of the entire state’s current output.
That’s a lot of oil cars off the rails, and tanker trucks off the roads. And oil prices don’t necessarily need to bounce all the way back to boom-era levels to make this viable. About 70 percent of current production leaves the state on rails. That’s a lot of market share for pipelines to take over.
Of course, pipelines are static, meaning the oil markets they serve are set. Rail, on the other hand, gives oil producers some options in terms of where they can get the best price.
Still, the fact that TransCanada is apparently willing to make such a big bet on North Dakota oil production is a really good sign.