Company pulls out of one pipeline, pointing to low oil production in North Dakota, and moves in line behind another slated to carry the state's crude oil. File Photo by Library of Congress/UPI
CALGARY, Alberta, Sept. 2 (UPI) -- North Dakota crude oil production is too low to support the development of the planned east-bound Sandpiper pipeline, Enbridge Energy announced.
"Enbridge Energy Partners has completed a review of Sandpiper and concluded that the project should be delayed until such time as crude oil production in North Dakota recovers sufficiently to support development of new pipeline capacity," the company said in a statement.
Enbridge Energy Partners and Marathon Petroleum Corp. established a joint venture in early August to acquire a stake in the Bakken Pipeline system, a system that links the North Dakota oil fields to regional networks. They said at the time that once the acquisition cleared, the companies would give up on their options for the Sandpiper pipeline.
In its latest statement, Enbridge said new pipeline capacity was unnecessary in North Dakota and recovery was likely outside its five-year planning horizon.
Oil production in June, the last full month for which data are available, declined 2 percent from the previous month to around 1.03 million barrels per day. June levels are more than 15 percent lower than the all-time high reached in December 2014.
North Dakota depends primarily on rail deliveries to get oil out of the Bakken shale reserve area to regional markets. That capacity is "adequate," according to state regulators, though the state is working to expand pipeline access to the rest of North America.
Sandpiper would have stretched 616 miles from North Dakota oil basins, through Minnesota and to an Enbridge terminal in Superior, Wis., and on to the U.S. and Canadian refining markets.
Enbridge added that, with Sandpiper shelved, it was moving in tandem with Marathon on the Bakken Pipeline, a network that includes the controversial Dakota Access pipeline project that would extend south from North Dakota.
Tribal groups are suing federal regulators over permits for the 1,134-mile pipeline because of threats to the Missouri River and other regional water ways. The U.S. Army Corps of Engineers, which examined each water crossing separately, is accused of sidelining tribal interests.