|North Dakota Refining Capacity Study
The objective of the North Dakota Refining Capacity study is to assess the feasibility of increasing the oil refinery capacity in North Dakota, and, if possible, determine the scale of such an expansion, the slate of refined product(s) that would produce the most economic benefit, and the preferred ownership model, i.e., private, public or private-public.
North Dakota Association of Rural Electric Cooperatives (NDAREC)
Corval Group, partnered with Purvin & Gertz and Mustang Engineering
The genesis of this study came from an April 2008 report issued by the U.S. Geological Survey (USGS) asserting that North Dakota and Montana have an estimated 3.0 to 4.3 billion barrels of undiscovered, technically recoverable oil in an area known as the Bakken Formation. This assessment shows a 25-fold increase in the amount of recoverable oil compared to the USGS 1995 estimate of 151 million barrels of oil. The Bakken Formation estimate is larger than all other current USGS oil assessments of the lower 48 states and is the largest "continuous" oil accumulation ever assessed by the USGS. The new report points out that the new geologic models applied to the Bakken Formation, advances in drilling and production technologies, and recent oil discoveries have resulted in these substantially larger technically recoverable oil volumes. About 105 million barrels of oil were produced from the Bakken Formation by the end of 2007. In 2008, the formation produced another 27.2 million barrels of oil, which represented 43% of the state’s annual oil production of some 62.3 million barrels. Even though oil prices have dropped significantly in recent months, it appears that oil production from this formation will continue strong for decades to come. Most recently, a major production find has occurred in the Three Forks formation underlying the Bakken. This find is still undergoing significant testing, but early evidence suggests it represents another significant recoverable pool of oil in western North Dakota.
This activity spurred a group of North Dakota citizens, led by two state legislators, to convene a study group to assess the feasibility of increasing oil refining capacity in the state. (Currently, there is one refinery in North Dakota, owned by Tesoro, and located near Mandan.) This largely volunteer group met throughout 2008, and concluded that further study was needed to fully address this complicated subject. At this point, the group approached Senator Byron Dorgan to inquire if funding could be secured for a comprehensive study. Senator Dorgan agreed with this request, and approached NDAREC in June of 2008 with a request to oversee the study if funding could be secured. The NDAREC board of directors agreed to the request at its meeting in July, 2008. Senator Dorgan’s request and action resulted in the funding of this study.
Decisions made by industry and key policy makers to increase North Dakota’s oil refining capacity (based on a rigorous, independent, third party feasibility assessment) may encourage oil producers to further invest in the development of the Bakken, thus significantly strengthening the economy of the state of North Dakota and helping to ensure a reliable supply of refined oil to meet our nation’s future energy needs.
- Selected steering and advisory committee members to oversee the study
- Developed a draft Request for Proposals (RFP) as a starting point for the committee
- Brought the committee together to edit and approve the RFP
- Issued the RFP to 17 qualified consulting firms
- Received twelve statements of qualifications representing 22 firms indicating an interest in bidding on the project
- Brought together the interested consultants and the committee to answer questions clarifying the RFP
- Brought the committee together to evaluate twelve proposals and select the firms to interview
- Brought in four consulting groups to interview and selected the Corval Group, partnered with Purvin & Gertz and Mustang Engineering, to conduct the study
- Negotiated the terms and conditions with the Corval Group
- The Corval Group has completed the Interim Refining Capacity Study Report
- NDAREC has completed their final Refining Capacity Study Report
Current Status (November 2010)
- NDAREC was granted a no cost time extension (NCTE) with a new project end date of January 1, 2011.
- NDAREC’s final technical report has been reviewed and approved. The report is listed below under "Additional Information".
- NDAREC has completed all deliverables associated with this project, thus the project has been completed.
Project Start: July 1, 2009
Project End: January 1, 2011
DOE Contribution: $461,672
Performer Contribution: $0
NETL – William Fincham (firstname.lastname@example.org or 304-285-4268)
WVU – Dennis Hill (email@example.com or 701-663-6501)
Final Technical Project Report [PDF-4.38MB] - December, 2010