Infrastructure racing to keep up with oil industry

By Laura Bailey

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Construction along the Bakken Pipeline Expansion Project was completed and placed into service in March 2013. The Bakken Pipeline Project consisted of expanding the U.S. portion of the Portal Link (or Line 26) by constructing two new pumping stations and replacing an 11-mile segment of the existing 12-inch-diameter pipeline between Kenaston and Lignite, North Dakota. The replacement section tracks north by northwest around the town of Lignite, North Dakota and generally follows an existing railroad right-of-way. New pump stations were constructed in Kenaston and Lignite, North Dakota. In addition, the project also expanded Enbridge’s existing terminal and station in Berthold, North Dakota. Photo courtesy: Enbridge Pipelines (North Dakota) LLC.

When a newcomer visits the Williston Basin, the first indicator of North Dakota’s oil boom is not likely to be the drilling platforms popping up on the horizon—it’s the orange cones that seem to sprout from the asphalt like dandelions. Roads are under construction everywhere, and it seems a miracle when a driver makes it more than 30 miles without stopping for flagmen and heavy equipment.

Travel is not bound to get easier anytime soon. This spring, the North Dakota legislature and Governor Jack Dalrymple approved an historic $1.7-billion appropriations package to improve roadways throughout the state.

The state’s infrastructure funding includes $600 million to rebuild and repair state highways, with $228.6 million from the Permanent Oil Tax Trust Fund for state highway projects within the 17 oil and gas producing counties in western North Dakota. Most of the projects will include road overlays to increase load-bearing capacity, widening of roads, and patch and repair work. However, there will also be several complete roadway reconstruction projects, as well. Another $142 million from the Permanent Oil Tax Trust Fund is allocated for reconstruction and repair projects on city, county and township roads within the Bakken.

The short construction season—one of the shortest in the nation—poses a challenge to highway contractors.

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WBI Energy completed construction of the Stateline Pipeline in the summer of 2012, connecting the output of two natural gas processing plants to the Northern Border Pipeline and pushing the company’s maximum pipeline capacity over the one billion cubic feet per day mark. Photo courtesy: MDU Resources Group.

“Everything is a high-demand, so contractors are working as quickly as they can and the DOT is working as fast as they can, too,” says Mark Dougherty, membership services director at the Associated General Contractors of North Dakota.

Dougherty has seen an uptick in new members joining the association, and many are out-of-state contractors. As more contractors move into the state, the competition for highway jobs has increased. He’s seeing six or seven qualified contractors bidding on each new job.

Contractors are up against an additional challenge—a workforce shortage, which has been a problem in every sector in North Dakota for several years.

“There’s work out here. If people are looking for work they’ll find it in North Dakota, and to some extent in eastern Montana. There’s still a huge shortage of help on highways, in industry, and housing,” Dougherty states.

Railroad infrastructure construction is also in full-swing. Almost 70 percent of all oil transported in the Bakken is transported by rail, and as the area has expanded, railroad infrastructure needs have grown too.

BNSF Railway plans to invest $220 million in this year in infrastructure in North Dakota. All the projects are aimed at increasing capacity. The funding will improve siding—secondary tracks that run alongside main tracks to help with traffic flow on busy routes—near Minot, Manitou, and Tioga. Tracks near Devil’s Lake will be improved, and new tracks will be laid or tracks will be lengthened in railyards in Mandan, Minot and Williston. BNSF plans to spend an additional $115 million in Montana, and a good portion of it will be spent enhancing Bakken infrastructure in eastern Montana.

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Construction on the Northwest Temporary Truck Bypass in N.D. Photo courtesy: North Dakota Department of Transportation.

Off the main lines, lots of work is being done to build out crude oil facilities, loading facilities and secondary track to connect to Class 1 lines, such as the BNSF lines. There are currently 18 oil-loading facilities in North Dakota, and another five to 10 of those large industry-funded projects are either underway or slated for the coming year, says Reed Reimer, vice-president of R&R Contracting. The company specializes in railroad design, construction, and repair. From design to completion, each project will take eight to 16 months—and that’s with R&R crews working as fast as they can. Each project will require 25,000 to 40,000 feet of new track.

Over time, the Class 1 railroads have raised expectations, Reimer says. They no longer want to pick up small loads. They’re expecting to pick up whole units. The change has required the oil industry to build out more sophisticated, larger loading facilities.

“I see railroad construction maintaining at an even trend of steady growth,” Reimer says. “The demand from customers is not waning,” Reimer adds.

“We certainly knew how to build track before; but now, we know how to build track fast,” Reimer says.

Oil that’s not moved by rail is moved by pipelines, and pipeline infrastructure construction is growing fast as well. There are currently some 15,000 miles of pipeline in North Dakota. The pipeline carries not only oil but natural gas, and according to the North Dakota Pipeline Authority, 2,353 miles of track were added in 2011. The figures for 2012 won’t be available until later this year, but Justin Kringstad, director of the North Dakota Pipeline Authority, says it should be about the same if not slightly more.

“We expect very robust pipeline construction over the next several years,” Kringstad states.

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Bay Limited trucking large tanks to a location in the Bakken. Roads are under construction everywhere, and it seems a miracle when a driver makes it more than 30 miles without stopping for flagmen and heavy equipment.

Natural gas development is playing a big role in pipeline expansion. Four new natural gas processing plants are expected to be built in the next few years. There are 18 such facilities in use now.

“There’s a tremendous level of activity to get this gas captured and moved to market,” Kringstad says.

Every new mile of track and every new mile of pipeline reduces truck traffic, reduces accidents, limits the need for road construction, and makes the Bakken more efficient.

“As this region matures, things will definitely look different five-, 10 to 15 years into the future than it does today,” Kringstad says.

Bakken by the numbers:

New funding for roadways: $1.73 billion

New funding for railways: $220 million

Percentage of oil moved by rail: 68

Miles of pipeline: 15,000

Average number of new miles of pipeline laid each year: 2,000+

Percentage of oil moved by pipeline: 32

 

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