Bakken standards imminent/ Push for Keystone XL

Ruling on Bakken conditioning delayed, new standards imminent

By Luke Geiver | November 13, 2014   The Bakken Magazine

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  A Lease Automatic Custody Transfer (LACT) unit is pictured here. The unit is operated by Caliber Midstream and is used to transfer oil from one party to another while treating and testing the oil.
  PHOTO: CALIBER MIDSTREAM

Although the North Dakota Industrial Commission has delayed the implementation of new crude conditioning standards, the eventual adoption of new regulations that will impact the Bakken shale play are imminent. The NDIC met this week to discuss the new standards but have agreed to allow public comments in addition to those already generated following a September hearing on the new standards until Wednesday Nov. 19. If the NDIC chooses to approve the standards following the extended comment period, the new oil conditioning regulations will take effect Feb. 1, 2015....

...The proposed order “sets operating standards for conditioning equipment to properly separate production fluids into gas and liquid. The order includes parameters for temperatures and pressures under which the equipment must operate to ensure that light hydrocarbons are removed before oil is shipped to market,” the NDIC said in a statement....

...The crux of the new standards is linked to Reid Vapor Pressure. Under new regulations, Bakken crude cannot be characterized with a RVP of more than 13.7 pounds per square inch. National standards are ususally near 14.7 psi and according to Helms, multiple studies have shown that roughly 80 percent of Bakken crude contains an RVP of roughly 11.8.

Although new standards will cost some portions of the Bakken industry money, the new standards don’t appear to be substantial, he said. “We really believe the vast majority of Bakken crude oil will fall well below the standard and that is because many operators are already implementing a thorough in-field operation,” Helms said.....  read more here

Who Wins If Keystone XL Is Approved?

By Paul Ausick November 14, 2014     24/7 Wall St. 

.....Over the past couple of years, as rail transportation out of the oil sands and the Bakken shale play in North Dakota have improved, the price differential between Western Canadian Select (WCS), a heavy, sour crude, and Mexican Maya, a Mexican crude that is very similar to WCS, has tightened from around $34 a barrel last November to about $6.50 earlier this week. The differential between WCS and West Texas Intermediate (WTI), the U.S. benchmark light, sweet crude, rose to $42 a barrel last November and fell to about $12.50 a barrel last month.

Even with the WCS discounts, Canadian producers that may be paying around $17 a barrel to transport their oil to the Gulf Coast still made money when transportation costs were added to the big discounts to Maya crude. Now that the discounts to Maya have shrunk, rail transport costs make it nearly uneconomical for producers to ship crude by rail from Canada to the Gulf Coast....
read more here

Increase in Oil Shipments by Rail Bolsters Case for Keystone XL

Federal agency notes rail transit is spiking as North Dakota searches for pipeline alternatives

Lachlan Markay   November 13, 2014    Washington Free Beacon

As both houses of Congress ready votes on the Keystone XL pipeline, federal energy regulators on Thursday revealed a large year-over-year increase in the amount of oil transported by rail, particularly from areas that Keystone’s southern leg would serve.

The increase in rail traffic could boost the case for Keystone, whose supporters say it offers a safer alternative to rail transportation in the wake of a number of derailments of trains carrying crude oil, some of which have resulted in loss of life....

.... According to an analysis by the State Department, rejecting the project would result in 2,947 injuries and 434 deaths over the next 10 years as oil companies operating along the pipeline are forced to transport their product by less-safe means, including rail..... read more here 

PS: Just because I post links to articles about the Keystone XL, doesn't mean I'm a supporter (as one has asked...).  I do believe we should be forearmed by being forewarned.  
cwr