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Rockies governors want infrastructure
The governors of Montana, Wyoming and North Dakota will meet in Billings, Mont., April 19 to discuss how to improve the infrastructure for getting oil to refineries.
Wyoming Gov. Dave Freudenthal and North Dakota Gov. John Hoeven will join Montana Gov. Brian Schweitzer at the Petroleum Club in downtown Billings to talk about recent drops in oil prices at the wellhead. Pipeline capacity to move the oil is limited because existing pipelines are full with Canadian crude. Refinery turnarounds and seasonal product changes also have limited refining capacity.
Rockies oil production up “Our region is the only region in America that has increased their oil production,” Schweitzer said. “We have done our fair share to reduce our dependency on foreign oil. Now we need the infrastructure to get it to domestic refineries.”
The region is taking discounts to get the oil to the markets, some in the $25-a-barrel range.
“Bringing a multistate focus to the issue is part of our continuing work on addressing the oil price differential and making sure that the resources developed in Wyoming and elsewhere command a fair market price,” Freudenthal said.
Hoeven noted that both Montana and North Dakota are producing oil from what is known as the Bakken formation, but “we need more pipeline capacity to get our oil to market.”
The governors’ meeting comes as Rep. Denny Rehberg, R-Mont., pressed the Department of Energy on its pricing system that he contends forces Montana producers to sell their oil at a deep discount compared with their Canadian counterparts.
Currently, Montana producers have to truck their oil to refineries because of the limited pipeline capacity. That drives American producers’ prices down, he said, while Canadian producers have access to U.S. pipelines.
“I want to know why in the world, when oil is selling for over $60 a barrel, eastern Montana’s oil is selling for as little as $30 a barrel,” Rehberg said. “It’s outrageous that preference for use of American pipelines is being given to a foreign producer.”
—The Associated Press
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