Western ND looks at regional water pipeline

Originally published by Associated Press on March 3, 2011 in the Plains Daily
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BISMARCK, N.D. (AP) -- North Dakota's booming oil industry requires huge amounts of water for drilling, a need the state could use to bring clean drinking water to rural towns, backers of a proposed water pipeline project say.

The Western Area Water Supply project, which the North Dakota Senate's Industry, Business and Labor Committee reviewed Thursday, would pump water from the Missouri River near Williston and sell it to oil companies and cities.

The legislation would set up a board to oversee the project and have the state back the bonds that would finance it. The pipeline network's estimated cost ranges from $150 million to $300 million.

The project's supporters call it an opportunity to build pipelines that will supply drinking water for cities and rural areas, while laying most of the expense onto an oil industry that is ravenous for water.

Skeptics say that if oil prices collapse, the state could be left holding a sizable bill. Water haulers said they have already invested in facilities to serve the industry, which a state-financed pipeline system would undercut.

"We have a great opportunity to build infrastructure to service western North Dakota for the next 100 years," said the bill's sponsor, Rep. Bob Skarphol, R-Tioga. "We have the opportunity to fund it with the help of the private sector's need for water."

North Dakota's oil industry uses a process called hydraulic fracturing to break down underground shale formations to extract oil. A single well can require 1 million to 1.5 million gallons of water during the process.

Companies now often have to haul water by truck, sometimes as far as 40 miles. A pipeline system would reduce hauling time, cut down truck traffic and provide better access to water. Supporters of the project expect oil companies will buy enough water in five to seven years to cover the system's cost.

"It'll benefit the people, and it'll benefit industry by allowing us to buy water," said Ron Ness, the president of the North Dakota Petroleum Council, which represents oil companies working in western North Dakota. "This opportunity only comes so often, when a big commercial user is ready to pay the bill."

The city of Williston and some neighboring water districts have been working on the proposal for more than two years.

Their plan envisions beginning pipeline construction on the Missouri River southwest of Williston and extending in four directions, reaching Grenora to the northwest, Ray to the northeast and Alexander and Watford City to the south.

City officials say Williston has the right to pump up to 30 million gallons of water from the river per day, but it uses only about 3 million gallons.

The city's water treatment plant was renovated in 2006, and can now handle 10 million gallons of water daily. If the Western Water Supply initiative is approved, its treatment capacity could be expanded to 14 million gallons, city officials said.

Opponents say the plan is too risky and could leave the state on the hook for a huge debt. The project's finances depend on oil companies being willing to buy most of the treated water.

"You never, ever can bank on the oil and gas industry," said Michael Nash, who runs a water trucking company in Williston. "We're a transient industry, that's all there is to it. If you bank on this industry, you will get burned. It's not a matter of if, but when."

Owners of private water businesses said the government would be unfairly competing with their industry and could undercut prices. Some said they'd invested hundreds of thousands of dollars in water depots for oil companies, which the pipeline could put out of business.

"If it were not for the entrepreneurs that spent their hard-earned money to respond to the needs of the industry at the time, we wouldn't have the oil industry doing like it is today," said Robert Harms, a lobbyist for independent water companies. "It's because the private sector invested its own money to develop the depots we're talking about."

If the bill is approved, pipeline construction would begin this summer.

The House approved the measure earlier, 91-3. The Senate committee took no action on it after a five-hour hearing Thursday. The panel intends to take testimony from Todd Sando, the state Water Commission's chief engineer, next week.

The bill is HB1206.