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North Dakota may tap federal funding for energy transit

State senator said federal support for energy transit networks vital of energy security.

By Daniel J. Graeber
North Dakota may tap federal funding for energy transit
Sen. John Hoeven, R-N.D., views federal funding for energy transit networks as vital for U.S. energy security. File photo by Kevin Dietsch/UPI | License Photo

WASHINGTON, Sept. 3 (UPI) -- More than $10 million in available federal funding to ensure the safe transport of oil and gas is vital for U.S. energy security, a North Dakota senator said.

The U.S. Department of Transportation awarded the state roughly $250,000 to support a state pipeline safety program. The Federal Railroad Administration, meanwhile, announced it was taking applications for $10 million in competitive funding for overhauls of rail networks designated to carry energy products like crude oil.

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Sen. John Hoeven, R-N.D., a member of the Senate Appropriations Committee. said the funding will support the integrity of the nation's energy transit infrastructure.

"As we continue to work towards producing more energy here at home, it's important for us to invest in infrastructure that will allow for the safe, efficient transportation of energy materials," he said in a statement.

The federal Pipeline and Hazardous Materials Safety Administration granted the state about $200,000 earlier this week to help improve North Dakota's ability to respond to incidents involving the transportation of hazardous materials like crude oil. The PHMSA in April offered $2 million to North Dakota to help fund university research in pipeline safety.

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North Dakota is the No. 2 crude oil producer in the nation behind Texas. Data from North Dakota show crude oil production in June, the last full month for which the state published data, was 1.21 million barrels per day, up about three-quarters of a percent from the previous month and just shy of the all-time record of 1.23 million bpd reached in December.

The increase in crude oil production has strained existing pipeline capacity, with rail breaking away from pipelines as the main source of crude oil delivery in 2012. There has been a corresponding increase in the number of rail incidents involving crude oil shipments as production increases in the United States. Rail company BNSF reported in May that six of the 107 cars carrying crude oil through Heimdal, N.D., caught fire after derailing.

North Dakota Gov. Jack Dalrymple said that incident was further evidence of the need for expanded pipeline capacity through his state.

New pipelines operating in North Dakota have pushed the volume of crude oil by rail lower during the first half of the year.

Three pipelines -- Sandpiper, Dakota Access and Upland -- should be in service by 2018 and provide 895,000 barrels per day in new capacity.

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