Sen. Rich Wardner, R-Dickinson, was among North Dakota officials touring petrochemical facilities in Alberta last week with Gov. Doug Burgum. The trip was to gain insight into how North Dakota might successfully bring a petrochemical plant to the state. Wardner shared some of his insights after the trip with the Williston Herald.
Q: What was the motivation for the trip?
A: Looking for a petrochemical company to come here is all about the flaring. We need to get that cut down to at least less than 90 percent across the state. If we don’t it’s going to curtail development. We are just not going to be able to increase our oil production unless we take care of this gas.
The other thing about the gas is, when we do process it, they can get rid of the NGLs. That’s propane, pentane and butane. What they have been sending down Northern Border is methane. But because they cannot get rid of the ethane, it goes with it. When you mix ethane with the methane, they call it hot gas, so it is a problem. And the pipeline is filling up. So we need to find a use for the ethane. That will take pressure off the pipelines, and it will be a value-added. And what do we do with ethane? It’s used to make plastics, fertilizer and things of that nature.
Q: Where all did you go on the tour?
A: First of all, we went through the Shell Petrochemical Company. They are not using gas for their feedstock. They are using oil from the oil sands, the bitumen. It is like a refinery that they use to break the carbon chains down into these gases. And then taking the gasses, methane, ethane, propane, butane and making products out of them.
Shell has a place where they store the gases, and they happen to have reservoirs where they keep just propane, just butane, and just ethane. So when the plant needs one of those, they have it right there.
It was very impressive. And what they were doing, they were glad to share some of the things they were doing.
Then we went and saw what ATCO is doing.
ATCO is a company that helps a petrochemical company take care of some of its services. A petrochemical company needs a lot of electricity. This company will put a gas generation plant right alongside the petrochemical company. They will provide electricity to the plant and will be using some of the gas.
You have to have a reservoir of gas, so that when you have too much you can put the ethane below ground and use it when you don’t have enough.
They also are the company that stores the gas.
Q: The gas gets stored underground. Do we have appropriate salt storage facilities in the Bakken?
A: It just so happens that in the Williston area there are salt formations. And that is what they need to store the gasses, whether it be ethane, butane or propane, it doesn’t matter. What they do is form a cavern in these salt formations and store it later. So we are really excited that we have all the things we need up in Williston.
We also have the roads. We have Highway 2 and 85. We have the railroad. We have the water, and we have these salt formations.
With that being said, the supporting company is excited about coming, but here is the kicker. We have to convince a company that does petrochemicals to come. And that is where we are right now.
Q: How competitive is the market out there, when it comes to getting a petrochemical plant?
A: It is very competitive. When you take Marcellus Shale and the Utica in Iowa and West Virginia, that is all they have is gas. And that is critical. So there would be an area that is bidding. Texas is another place.
So we have competition.
But we are on a short list for one of the petrochemical companies. When I say short, we were added to it. There are four or five different spots and North Dakota was added when we figured out that we had all the things needed for a petrochemical plant.
There have been some discussions going on behind the scenes, talking about the needs in North Dakota. ATCO’s electric generation would produce more than enough electricity for the petrochemical company. They have already inventoried who is going to need more electricity in North Dakota. And they would be able to provide some of that for the oil industry. It needs power out to the well sites and stuff like that.
Q: Will you need more incentives to attract a petrochemical plant?
A: Right now, we are inventorying what we have. We do have some things already in place. We don’t know if we will have to make any changes in what we have. We are already a business friendly state, and our income tax is way down. We don’t have a high corporate tax.
We have cheap gas — just like everyone else. We have cheap gas, so it would be a place to use the gas and put some value on it. But the biggest thing we need to get taken care of is the flaring.
Petrochemical includes not just plastics, but fertilizer as well?
The fertilizer one, this is an agriculture state. We have Montana, North Dakota, South Dakota and they all use fertilizer.
It would be a big boon and a benefit to the agriculture community. So this isn’t just about energy.
As far as the plastics, with the rail line being right here, there’s some place close by. We’d be able to transport it no problem to where they can use the plastic beads.
Q: What would it mean to the future of the state to have a petrochemical industry?
A: For the state of North Dakota, first, it’s value-added. Second it diversifies our workforce.
We are going to have to provide all the services needed for the workforce to come in. And the workforce that works in the petrochemical industry, these are good paying jobs. Very good-paying jobs. So thinks like education for the children of the people who work there. And public safety, good roads, good water, good services. All of these things are going to be a part of it. I think we are well on our way. We are sitting pretty good in most of those areas. But those are things we have to consider, because we have to provide a quality of life that will attract people to come and work in that type of industry.
We have what we need in North Dakota to make this happen here. No question about it. And, for the future of the state, we need to do this.