April 11, 2013

WALTER RUSSELL MEAD: A Taste For The Refined In North Dakota:

Ground was recently broken on the first new oil refinery in the United States since 1976. The refinery is being built near the Bakken shale formation in North Dakota, one of the centers of the recent American shale boom. Until now, most of the oil extracted in North Dakota has wound its way to Gulf coast refineries by pipeline, truck and train. But, as Reuters reports, America’s oil infrastructure is adapting to a new reality . . . .

Projects like this can ensure the shale boom doesn’t go bust. Despite having the world’s most extensive network of pipelines, America’s shale oil is running into transportation bottlenecks. There’s also a lack of refineries capable of working with the light, sweet crude that’s being extracted from US shale—most Gulf coast refineries are geared toward the heavy, lower quality variety.

This refinery and the two more on the way won’t by themselves change how we bring shale oil to market. But the MDU/Calumet project and similar refineries could make more shale oil economically viable to extract while cutting out some of the potentially hazardous cross-country transportation of crude. The US needs to continue to develop a smart, robust energy infrastructure. This seems like a step in the right direction.

Indeed.

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