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Canadian crude unlikely to prevent North Dakota oil industry growth

March 12, 2014
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If the United States moves to approve the proposed major pipelines carrying Canadian crude, the effect of the increased import of crude from north of the border may not be as significant as many industry representatives have claimed.

In fact, it is not likely to affect the growth of North Dakota oil production, according to Justin Kringstad, director of the North Dakota Pipeline Authority, who explained that Canadian tar sands oil and North Dakota's crude are not in competition as they are both intended to reach different refineries with different production requirements. As oil production is of critical importance for both North Dakota and Alberta, it is only natural that they are looking for markets for their production but they are unlikely to interfere with one another, he added.

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Kringstad's view is backed by another key industry official, the Associated Press reported. Ron Ness, president of the North Dakota Petroleum Council, a trade body representing more than 500 companies operating in North Dakota, is confident that the proposed pipelines will not interfere with the growing oil industry in the second-largest oil producing state after Texas.

Canadian oil is heavy sour crude of lower value and is more difficult for refineries to process, while North Dakota's light sweet crude is simpler to refine. The state produces almost one million barrels of oil per day, according to the Associated Press.

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