Western Area Water Supply Pipeline Proposal in North Dakota

Originally published in PlainsDaily.com
By Kate Bommarito on March 16, 2011 at 05:47 pm
Click here for original posting

The question of how best to increase the water supply to Western North Dakota was addressed again today, when the Senate Industry, Business and Labor Committee continued its hearing on HB 1206.
The bill proposes the creation of a western area water supply authority and gives that entity the ability to oversee the building of a new, public water pipeline as well as enter into water supply contracts with “member cities, water districts, and private users, such as oil and gas producers, for the sale of water for use within or outside the authority boundaries or the state.”

The Western Area Water Supply Project (WAWS) is an extensive pipeline project that would pump water from the Missouri River and transport it via new pipelines to western areas. If the bill passes, construction could begin as early as this summer and be completed by 2014.

The project is estimated to cost $200-300 million.  The project would be financed by a state guaranteed bond issuance.  The bonds would be paid back over thirteen years using revenues coming from WAWSA’s sale of water to the oil industry. Projected industry water sales estimate that the bonds would actually be repaid within the first 8 years.

The committee chose to extend yesterday’s hearing on the bill so that they could gather more testimony from the state water commission, natural resources department, and Bank of North Dakota.

According to the ND State Water Commission, although current aquifers are not being depleted by increased needs in the oil industry, that situation could change if North Dakota were to enter a drier climate cycle. The commission, whose involvement in the project “is minimal” according to testimony given today, stated that by far the best and most reliable source of water for meeting western water needs is the Missouri River.

One large unknown in the plan is how the Army Corps of Engineers (COE) will react to more water being pumped out of the river, and whether or not North Dakota’s downstream neighbors will protest. The COE is already trying to charge North Dakota “storage fees” for diversion of water from Lake Sakakawea and could levy additional fees on new developments, public and private, seeking water access.

All in all, proponents of the bill see it as a win-win situation: western homes and ag producers get rural water supply along with the oil producers, and the state is able to finesse payment for the system out of private industry revenues.  Additionally, the stress and traffic on roads is relieved, because water trucks will not need to travel the long distances they currently cover, hauling water for fracking.

Since the repayment of the project’s financing depends upon revenues from water sales to industrial producers, Committee Chair Jerry Klein, asked whether or firm contracts and commitments were in place.  At this point in time, there are no solid commitments in place, either from industrial or municipal consumers.  Klein commented “that puts us in an uncomfortable position.”

Currently, there is already a private industry project to construct pipelines to supply to western oil producers region. The private project is smaller and opponents of the bill claim it will provide water more efficiently and at cheaper prices.

Supporters argue that private industry doesn’t want the state competition, and that the currently proposed plan will pay for itself within eight years, delivering rural water to areas that could not feasibly receive it under normal public works conditions.