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October 16, 2008

MCED airs role in oil




Mercer County Economic Development’s purpose is to promote and expand economic development in Mercer County. On Thursday, MCED representatives met to discuss a project that intends to do just that.

The plan under discussion involved possible development of a truck-to-railcar oil transload facility at the old Indianhead Mine site in the western part of Mercer County.

In this time of North Dakota’s unprecedented oil extraction, oil pipeline capacity has quickly been exhausted leading oil transports to eye alternative modes of crude oil transportation. With its proximity to the railroad tracks, the Indianhead Mine site has caught the eye of Diamond B Companies Inc., Billings, Mont., that wish to develop the site to allow for transport of oil drilled in Dunn and, potentially, Mercer counties.

The 10-acre site and 1.5-2 miles of track in question are owned in part by MCED and Curly Haugland, Bismarck. MCED is negotiating a lease with Diamond B and on behalf of Haugland, MCED Chairman John Phillips said.

As proposed in the 10-year lease draft, Diamond B would pay MCED an annual fee of $15,000. Haugland, the majority landowner, would split that sum with MCED 75-25 percent, allotting Haugland $11,250 and MCED $3,750. MCED would manage the property.

As of now, there are no storage tanks onsite, Phillips said, and crude would be transferred directly from truck to railroad tank cars, which would be owned by Pioneer Oil, also headquartered in Billings. In a previous meeting with the Mercer County Commission, depot developer Ray Sheldon of Diamond B said the company’s initial plan is to run 10 railcars a day, three days a week. To fill those railcars, 30 trucks would run three days per week – totaling 90 trucks per week.

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