Infrastructure in Focus: The Bakken, a Case Study in a Dynamic Supply Chain
Crude oil production from the Bakken Formation in North Dakota and eastern Montana has increased rapidly over the past decade, from less than 0.2 million b/d in 2007 to a peak of more than 1.2 million b/d in 2015. 30 From 2011 to 2016, Bakken crude oil production outstripped the capacity of local refineries to process the crude oil and existing pipeline systems to move the crude to refineries located out of the region. Efforts to expand pipeline capacity began almost immediately; however, to support continued production while proposed pipeline projects were reviewed, approved and constructed, investments were made in rail loading terminals in the Bakken and rail unloading facilities at the refining centers on the East, West and Gulf coasts, and in new retrofitted rail cars to carry the crude. At its peak in 2014, as much as 0.8 million b/d of crude oil moved out of the Bakken by rail. 31 As new takeaway pipeline capacity was added connecting the Bakken to the crude oil storage hub in Cushing, Oklahoma, and to refineries on the Gulf Coast, shipment of crude by rail from the Bakken declined sharply. Since the startup of
the Dakota Access Pipeline in 2017, movement of crude by rail out of the Bakken has fallen to approximately less than 0.2 million b/d, with the remaining rail volumes primarily shipped to the West Coast, a destination that lacks pipeline connections to the Bakken. 32 Natural gas production in the Bakken has also grown, and along with it, the production of NGLs, which have largely moved out of the region by rail. From 2007 to 2017, NGL production in the Upper Midwest (which includes North Dakota) increased from 14,000 b/d to 222,000 b/d. 33 Expansions to pipeline infrastructure are now being planned to move NGLs from the Bakken to the NGL fractionation and storage hub in Conway, Kansas.
Bakken Region Rail and Pipeline Takeaway Capacity vs. Production (million b/d)
3
Rail Capacity Dakota Access Pipeline Capacity All Other Pipeline Capacity Local Refining Capacity Crude Production
2
1
0
2007
2008 2009
2010
2011
2014 2012 2013
2017 2015 2016
Source: Analysis of North Dakota Pipeline Authority US Williston Basin Crude Oil Export Options (June 2017) and EIA Bakken Region Drilling Productivity Report
The Fuel and Petrochemical Supply Chains
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