Billings Refineries and Canadian Shale

MONTANA, Sep 23 2008 (Neo Natura) - Billings petroleum geologist Bob Fisher is saying that the United States would be wise to rely on a friendly country like Canada for more of its imported oil. Canada is one of our closest allies, is the leading exporter of oil to the United States and is the only major oil-producing country, besides the United States, that allows Western countries to freely explore and develop its oil resources, he said.

Fisher, with Augustus Energy Partners, wrote a guest editorial in The Gazette in late June, calling on Congress to repeal legislation that prohibits the U.S. government from using gasoline and other oil products refined from oil sands. The U.S. Air Force has also asked Congress to rescind the ban.

Fisher said he is against the congressional ban for many reasons, not least because it is nearly impossible to trace fuels back to their source when so many different crude oils are blended before being shipped to American refineries.

Regional oil producers may feel another effect of Canadian developments, he said, because there might be a lack of skilled workers, which could dampen oil exploration and development. It is also possible that Montana businesses will be able to cash in on helping build Canadian infrastructure.

All three refineries in the Billings area will have a finger in the oil-sands pie. Pat Kimmet, manager of the CHS refinery in Laurel, said 90 percent of the crude oil entering the Laurel refinery is already heavy crude, with high sulfur and asphalt content, from conventional wells.

Part of refinery's feedstock is "western Canadian select," or WCS, a blend of various crude oils including some processed from the oil sands of northern Alberta.

As the supply of oil from conventional fields declines, Kimmet said, western Canadian select "is really the future of our refinery here in Laurel." Oil derived from the sands, he said, "is a huge reserve."

In anticipation of handling heavier crude oil, the CHS refinery completed a $400 million upgrade this spring that will squeeze more gasoline and diesel out of each barrel of crude. CHS has its own crude pipeline from the Canadian border to its refinery in Laurel.

Kimmet said the supply of crude from Canada is particularly welcome nowadays, when people are "concerned about the stability of other oil-producing regions of the world."

"We are just very fortunate to have it available to us from a stable country, from a country that's friendly and close to us," he said.

And even though the refinery is using heavier, dirtier feedstock, Kimmet said, upgrades over the years have cut down substantially on sulfur dioxide emissions from the plant. In the early 1990s, when emissions were at their highest levels, he said, the CHS refinery emitted about 9,000 tons of sulfur dioxide a year. That number is now down to 400 to 500 tons a year, he said.

"We've been very progressive in dealing with the environmental issues," Kimmet said. "We have the equipment in place to deal with this kind of crude."

The ConocoPhillips refinery in Billings also plans upgrades that will make it possible to handle some Canadian crude. Charlie Rowton, a company spokesman in Houston, said construction of new crude and vacuum units, which has not begun, is scheduled for completion in 2011.

The new units will be used to perform the initial separation of the crude oil into various products, which would then be further refined in other units at the plant. When the new units are in place, the capacity of the Billings refinery will go from 58,000 barrels of oil a day to 70,000 barrels.

Rowton said it is difficult to say what impact oil-sands developments will have on the Montana economy.

He also states, "Having access to more secure Canadian crude oil and upgrading our U.S. refineries ... will help maintain the economic vitality of all our refineries, including the one at Billings."

The ExxonMobil refinery in Billings was designed to handle heavy crude and has been processing oil from the oil-sands industry in Alberta for many years, according to spokeswoman Pam Malek.

Malek said ExxonMobil, which processes 55,000 to 60,000 barrels of oil a day at its Billings refinery, isn't planning upgrades related to the oil sands.

New Natural Gas Interstate Pipeline

MONTANA, Apr 07 (Neo Natura) - Midstream energy firms Alliance Pipeline and Questar Overthrust Pipeline have entered into a memorandum of understanding to develop the Rockies Alliance Pipeline, a jointly owned interstate natural gas pipeline from Wamsutter, Wyoming, to the Emerson trading hub on the US-Canadian border in Minnesota.

The proposed 42-inch pipeline will traverse approximately 800 miles through the US states of Wyoming, Montana and North Dakota, connecting the Rockies natural gas producing region with natural gas markets in the US Midwest and central Canada.

The Rockies Alliance Pipeline (RAP) is proposing to interconnect with downstream pipelines to provide direct access to the Chicago Hub, Michigan and Dawn storage facilities, and upper Midwest and Northeastern markets in the US.

RAP reportedly provides maximum receipt flexibility to access the growing gas supplies in the Rocky Mountain region originating in the Wamsutter Hub as well as the Powder River Basin area. RAP also provides multiple delivery options and will offer zonal rates with the various interstate pipelines.

Alliance and Questar will work with prospective shippers to determine the most efficient size, route and timing of in-service date for the RAP facilities.

The Rockies Alliance project is one five pending pipeline proposals in Wyoming. Four of those would carry gas westward to California, said Brian Jeffries, executive director of the Wyoming Pipeline Authority. A sixth project, the Rockies Express, is under construction with plans to begin moving gas eastward by this summer. More than 50 per cent of Wyoming's tax and royalty revenues are based on natural gas, he noted.

The companies are targeting the fall of 2011 for opening the entire length of the pipeline, pending financing and regulatory approval.

Proposed Federal EIS Plan

MONTANA, Jan 31 (Neo Natura) - A public discussion on the proposed federal EIS project, a plan to designate energy corridors on federal land in 11 Western states, drew few comments at a public meeting in Helena, but for the most part was supported from representatives of organizations who attended.

Use this form to submit comments on the Energy Corridor Draft Programmatic EIS. All comments received or postmarked by Thursday, February 14, 2008 will be considered. You can also view the proposed corridor area.

Most favored a route for oil and natural gas pipelines, power lines and distribution facilities that follows U.S. 287 from Townsend to Three Forks, then westward toward Butte and Anaconda and splitting to run north and south along the inter-states.

Another favored route could run from Townsend across Interstate 15 and the Beaverhead-Deerlodge National Forest, then north to Garrison and continue into Idaho.

“I’m bringing 200 petition letters asking for either the Garrison/Milltown or Townsend/Three Forks/Milk Creek routes,” Linda Sather, Anaconda-Deer Lodge County commissioner said at Tuesday’s meeting. “We want this in our county. We welcome it and support it wholeheartedly.”

But others are wary of the corridors, saying they could run through roadless areas. In New Mexico, critics said the map of the proposed corridors show only disconnected lines and that connecting the corridors would involve pipelines and power lines crossing state, tribal or private land. They said the connecting routes should be determined before the true impacts of the corridors can be measured.

Throughout the West, the proposed corridors cross through 12 national parks, monuments or recreation areas and three wildlife refuges. That’s down from the initial plan that involved 29 national parks, monuments or recreation areas; 15 wild-life refuges; and 58 wilderness areas.

“Although the Energy Department has made significant improvements in their proposed corridor designations, the proposed corridors still lack thorough consideration of the likely damage to federal lands and other places,” said Nada Culver, who has tracked the process for the Wilderness Society since it began. “In Montana and elsewhere, the Energy Department needs to come up with alternatives to minimize the number of corridors and maximize use of renewable energy, and it should include firm requirements to limit all projects to designated corridors.”

The energy corridors are part of an energy bill passed in 2005 to provide more energy to Western states and shorten the length of time it takes the energy industry to gain approval to run pipelines and power lines.

Once projects are proposed for the corridors, they would undergo additional environmental review before permits were issued and rights-of-way granted.

Jeff Barber with the Montana Environmental Information Center said the center supports the idea of energy corridors, but would like them placed within existing transmission routes and, if possible, to limit the export of Montana power.

“If it’s a coal plant exporting power, that’s not a direction we want to go,” Barber said. “But if it’s wind generation we want to export, that’s a different situation.”

Overall, the corridors include 6,055 miles over almost 3 million acres in Montana, California, Nevada, Colorado, Utah, Washington, Oregon, Wyoming, Idaho, New Mexico and Arizona.

Brian Mills, Department of Energy environmental protection specialist, said the corridors would be about 3,500 feet wide — although that could vary — with 3,700 miles in existing corridors’ right of way.
In Montana, the proposed corridors cover 102 miles over 42,000 acres of federal land.