In his opening remarks at the North Dakota Governor’s Pipeline Summit earlier this summer, Alliance Pipeline Senior Vice President and Chief Operating Officer Mike McGonagill said the problem of getting pent up natural gas in North Dakota to market is the same problem the Western Canadian Sedimentary Basin faced 13 to 14 years ago. That problem in Canada, he says, was the “genesis” of the Alliance Pipeline Company.
The Alliance pipeline system now consists of 2,300 miles of 36-inch and 42-inch pipe transporting 1.6 billion cubic feet of natural gas per day from western Canada into the upper U.S. Midwest, and accounts for about 14 percent of the natural gas coming into the U.S.
But it’s not just natural gas that Alliance moves; McGonagill said the company also transports a lot of the associated constituents within that natural gas, such as the ethanes, propanes and butanes, which go to the Midwest markets in the U.S., and have proven to be been very successful business and operational models. That system, he said, continues to operate today safely without incidents.
Building on the approach of moving high-energy natural gas and moving it safely is why Alliance is in the Bakken, he said.
Referring to a satellite photograph of a portion of the upper Midwest, McGonagill pointed to a prominent bright image of flaring natural gas in the Bakken. Alliance’s proposed Tioga lateral pipeline is targeted at that “bright spot” where the flaring is occurring, he said.
Referring to comments made earlier in the day by Gov. Jack Dalrymple, he concurred by saying gas is being wasted and the Tioga lateral pipeline is poised to get it to market.
“I’m really glad, by the way, this is being webcast today” he said. “I appreciate that fact because I’m hoping there are folks out there that want to learn more about pipelines.”
Tioga lateral pipeline
The Tioga line, said McGonagill, is pretty simple and will be 80 miles of 12-inch pipe that will move gas from the outfall of the Alliance and Hess plants at Tioga to the Alliance mainline near Sherwood, N.D. The Tioga lateral will have an initial capacity of 61.5 million cubic feet per day and can easily be expanded to between 110 and 140 million cubic feet per day. As a result, he said, the Tioga, in conjunction with the Prairie Rose pipeline that runs from a plant at Palermo to the Alliance main line at Bantry and operated by Alliance sister company Aux Sable, will move a significant amount of natural gas out of North Dakota and to market.
Tioga a FERC regulated project
Because the pipeline is a lateral to the main line, McGonagill said, it is regulated under FERC, or the Federal Energy Regulatory Commission.
He said Alliance applied to FERC in January and the permitting is currently in the environmental assessment stage.
FERC’s staff, he said, does a rigorous review and is careful to take input from all of the various stakeholders including the government, individuals and state agencies in considering what is in the best interest of the public.
McGonagill said the Tioga project is on schedule and Alliance is hoping to have FERC approval this fall so that construction can begin in the fourth quarter and the line can go into service by mid-2013.
Alliance’s implicit promise
McGonagill then told the audience that any pipeline business starts with an implicit promise, and for Alliance that promise is to the land and to the people who live around the pipe. Nobody has “invited us there,” he continued, “we’re there because of a public need and a public good and we try to serve that well.”
The promise, McGonagill said, really falls into three areas, and first is a strong commitment to safety. He said the Interstate Natural Gas Association of America has a task force to which both he and Barry Haugen of WBI Energy belong that is promoting safety to higher levels with the goal of being incident free. This includes designing and executing pipelines to rigorous standards in addition to the ongoing inspection process of “boots on the ground” and “intelligent pigging.” That is “part of the fabric of who we are as pipelines to ensure that we remain incident free.”
Second is a commitment to communities.
“Proximity implies accountability” he said, and as a pipeline company, Alliance is in proximity to landowners and communities and is committed to remain and participate in those communities. It’s an ongoing commitment, he said, and that is why, for example, Alliance has contributed more than a quarter of million dollars to the Future Farmers of America in North Dakota in the last 11 years.
Why Future Farmers of America? Because that organization is developing tomorrow’s leaders today and the organization has a focus on leadership and farm safety, McGonagill said.
The third and last area of Alliance’s implicit promise is the company’s commitment to landowners.
Right-of-way and landowner issues are extremely important, he said, because pipe is on land that sometimes has been in families for generations.
He said Alliance works hard to establish long-term relationships with the landowners and works hard to mitigate impacts from building the line.
McGonagill noted that Alliance route crosses some of the most productive agricultural land in North America and perhaps even in the world. There are fields on that route that yield over 200 to 220 bushels per acre and soy over 60 bushels per year, which are extremely high yields, he said.
Restoration of rights-of-way is also extremely important to Alliance, he said, and over the last 11 to 12 years the company has developed numerous restoration techniques to ensure that rights-of-way are restored to their same productive levels.
Furthermore, Alliance is voluntarily funding conservation easements to mitigate construction impacts.
Above and beyond regulation
In another voluntary effort, McGonagill told the audience that Alliance is working with North Dakota State University on a native prairie reclamation study to be rolled out later in the summer.
Anticipated to extend over several years, Alliance wants to test, assess and deploy different reclamation methods along rights-of-way.
Following a literature search, the study will involve actual field testing of different seed mixes, tillage approaches, and types of plant species to determine what works best to reclaim the prairie along the right-of-way, McGonagill explained.
All of this information will be available to the industry, he said, because Alliance believes it’s a legacy issue for the company and a way the company can improve overall pipeline construction and development in North Dakota and the upper Midwest.
He said North Dakota State has an excellent range management program, and because some of Alliance’s employees are graduates of that program, the company has a long affiliation with the university.
He hoped that landowners would watch the webcast and be willing to voluntarily participate in the study.
A commitment to North Dakota
In closing, McGonagill said Alliance believes ongoing commitments to agencies and organizations in North Dakota are very important. He said Alliance, as well as other pipeline operators, is in North Dakota for long-term commercial development, and along with that, have many employees who live and raise their families in the state.
Alliance wants those employees to understand and be proud of the implicit promise.
That promise, McGonagill reiterated, is a commitment to running the safest pipeline in the business, being involved in communities, and more importantly, a commitment to the land and the people and the generations who will follow.
