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Permalink Reply by Tim Tarr on March 23, 2013 at 6:17am

 they said the company wanted to charge to much for the transportation of the oil.

I would think if they wanted to charge too much no one would use their pipeline! Probably just trying to make up for those regulations, THAT COSTS TOO MUCH you "egg"heads!

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Permalink Reply by Dan on March 23, 2013 at 6:45am

"the feds apparently killed a pipeline a Canadian company wanted to build , because they said the company wanted to charge to much for the transportation of the oil."

What if the Canadian company is the producer and transporter.  What if a bulk of the ND leases state the landowner pays for production and transportation costs partially out of their pocket.  Without seeing any particulars this is just a "he said she said".

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Permalink Reply by Jack Straw on March 23, 2013 at 7:51am

RE: "What if the Canadian company is the producer and transporter. "

The company is Enbridge they are a min-stream pipeline company; they are not a producer.

There is one big winner in the lack of approval ... and that is Burlington Northern Railroad, who are making a lot of money shipping oil by rail (due to the lack of pipelines in the Bakken).

Burlington Northern Railroad is owned by Warren Buffet ... who counts among his BFFs a fellow by the name of Barry Soetoro (who also goes by the name of Barack Hussein Obama) ... looks to me like crony capitalism at its best.

 

All MHO,

                   JS

Source: http://www2.wjbf.com/news/2013/mar/22/regulators-block-proposed-oil...

 

Regulators block proposed oil pipeline extension

By:                 | Associated Press Published: March 22, 2013  

 

WASHINGTON --                              

WASHINGTON (AP)  Federal regulators have rejected a request by Enbridge Inc. for the go-ahead to move forward with a proposed $2.5 billion oil pipeline expansion in North Dakota.

The U.S. Federal Energy Regulatory Commission issued the ruling on Friday.

A key sticking point is Enbridge's bid to set the rate structure that it could charge to transport oil through the pipeline.

The commission noted that it has not supported Enbridge's proposed rate.

It also said Enbridge has yet to present an alternative that the commission can approve as fair, reasonable and in the public interest.

Even so, two of the five commission members dissented from the ruling, saying the denial will unduly delay infrastructure investments in the region.

A call to Enbridge, which is based in Calgary, Alberta, was not immediately returned.

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Permalink Reply by Dan on March 23, 2013 at 8:08am

Thanks for the link to the whole story.

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Permalink Reply by Jim Litwinowicz on March 23, 2013 at 6:57am

What they charge shouldn't be relevant for fed permission. If they charge too much then producers could ship by rail, barge, truck, or even contract another company to put in another pipeline.  Its called capitalism, which results in competition, which reduces prices.

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Permalink Reply by melissa humphrey on March 23, 2013 at 9:06am

FERC does consider econmics in their decisions. They have to allow for reasonable returns to risk/capital but can't allow private entities to earn excessively from FERC granted advantage.

Can you say cobwebs?

Wareen Buffett runs Berkshire,  and owns a high 5 of the equity. Hundreds of thousands own % in BRK. Your pension, ypur college's endowment and hopefull you own some.

 

Though a strict capitalist in his daily fiunctioning, WB is a democrat pure and pure and positive to all democratic presidents in teh last 40 yrs. Odd mix but tis so.

 

The spread of Bakken oil vs the WTI benchmark is very high, maybe 15-20$. Why? not enough transporation capacity exists. BurNorth benefits today because some of that spread makes its way into rail rates. Other RRs and short lines are reaping big $ s as well.

Long term, capacityh gets filled and rates go to normal.

Search goggle on the topic and you will see others acquiring pieces of this puzzle in the region.

 

The  bet is Enbridge reevaluates and submits a suitable appliacation.

Be careful out there, misinformation is everywhere.

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Permalink Reply by Brian Day on March 23, 2013 at 9:25am

How does this relate to a natural gas pipeline into that area, or doesn't it?  I could see better transport from the region decreasing the price of gas at the pump a slight amount, but probably not a huge amount due to our country's huge demand.  I can see a little competition for Ohio oil, but it doesn't sound like Utica shale oil is going to be a huge factor in our country's demand.  The large amounts of natural gas that cannot be easily transported out of the Bakken at this time could have a significant effect upon the natural gas markets if and when there is a pipeline in place to transort that gas more effectively.

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Permalink Reply by gary smith on March 23, 2013 at 9:32am

no misinfo in the fact that even two of the regulators could see it's not worth the holdup. there is no misinfo in the fact that this administration is a lawless enterprize in many areas.

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Permalink Reply by melissa humphrey on March 23, 2013 at 11:59am

Brian- fwiw the Bakken formation under heavy development in ND MT primarily crude oil. of course some gas.

The regulators killed a crude pipeline proposal.

Over time any area that has rich resources withh see take away infrusturcture to carry it to market. The differerence between the localized bid vs enduser or midstream sourced gas oil etc equals the driver of take away transport.

Pipes can take 1-3 yrs from idea to flow,

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Permalink Reply by Jack Straw on March 23, 2013 at 2:35pm

Natural Gas constitutes a significant component of the resources of the Bakken Formation, as based upon the gas-oil ratio (GOR).

For the Bakken the GOR, expressed as cubic feet of natural gas per barrel of oil ranges from 0.6-1.0 Mcf/bbl.

If we take an average of 0.8 Mcf/bbl and use the approximation of 6 Mcf = 1 bbl for the equivalence of natural Gas to Oil (on a BTU basis), the Bakken production is about 1/8^th Natural Gas.

Currently there is a lack of sufficient infrastructure to move oil out of the Bakken.

The ability to the Bakken Natural Gas is much more problematic.

Much of the Bakken Natural Gas is currently flared for lack of the infrastructure that would move it to market.

 

We need our government to value all forms of energy, but especially the clean and economical forms of energy … foremost of these is Natural Gas.

The rapid advent of cheap and plentiful Natural Gas is a resource that should be celebrated rather than ignored (or reviled as the “Silly People” do).

 

All IMHO,

                     JS

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