Energy companies continue building multi-million dollar projects in Converse County, literally shifting tons of earth to build new roads and digging trenches to make way for new pipelines. With miles and miles of new pipe going into the ground, individual projects might not seem like a huge deal.
The Iron Horse pipeline is a big one for Converse County, though.
The 16-inch crude line will travel from northern Converse County down to Tallgrass Energy Partners’ terminal in Guernsey. Representatives for Tallgrass, which co-owns Iron Horse with Silver Creek Midstream, discussed a pipeline re-route and pump station with the county commissioners last week.
“Due to recent events, with oil and gas prices going up and down, all the mergers and acquisitions and what not, we have changed our original Iron Horse pipeline,” Meriwether Land Services Director of Project Management Kris Knackstedt explained. Meriwether is a land services company working for Tallgrass on the project.
Oil prices have sunk drastically in recent months, with a barrel of WTI (West Texas Intermediate) selling in the $50s range this week. That number is down from an encouraging $75-a-barrel back in October, the high-water mark for 2018.
In late August, Silver Creek Midstream announced it had acquired Genesis Energy’s Powder River Basin crude gathering, storage and rail assets for $300 million. That change of ownership threw a wrench in the Iron Horse plans.
Knackstedt explained that several miles of pipe had already been welded before the change, although trenches had not yet been dug.
“My 17 years building pipe I’ve never seen a re-route this big,” Knackstedt told the commissioners, while noting the advantages of pipelines as being safer and helping counties by reducing the number of heavy trucks on the roads.
“We can ship more crude in a day than trucks can in two weeks,” Knackstedt said in an interview. “It’s all about money.”
In addition to the re-route, Knackstedt told the commission about a new pump station for the pipeline, which will be off of Robinson Road, a little over 15 miles north of Douglas.
Knackstedt said Tallgrass will hopefully break ground next week. Between 40 and 60 workers will be employed here during construction.