Eminent Domain in Getting Oil to Market

As noted in the attached article, Getting to Market: Detours on the Road to Oil, in Aol Energy., the key to the process will be how to move oil from new locations. Clearly trucking will not do the job. Rails may in certain circumstances, although potentially more expensive.

Inevitably, pipeline construction will be required if we are to get to our new fields in North Dakota and the mountain States.

AOL Energy

But Lou Pugliaresi, President, Energy Policy Research Foundation, said the pace of new well development is being threatened by "chokepoints," oil pipelines that are at capacity or don't extend into areas of new production, which range along the Rockies, the Appalachians, the Mid-continent, California and the Southeast.Hill Vaden, Senior Analyst, US Upstream Research, Wood Mackenzie, said producers in North Dakota's Bakken shale, rather than take a $12/barrel discount for oil sold in North Dakota, have started shipping by rail to get a $16/barrel premium in Louisiana because pipelines to the Gulf Coast refineries are not available. Pipeline shipping is historically cheaper than rail.

 

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