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Berthold Farmers Elevator to move oil with Enbridge

Berthold Farmers Elevator is getting into the energy transportation business, thanks to an unprecedented alignment of location, abilities and opportunity. “What started out as some possibilities has turned into a necessity, as we figure out a way to move oil,” said Dan DeRouchey, general manager of BFE.

4/18/12 (Wed)

By Caroline Downs

Berthold Farmers Elevator is getting into the energy transportation business, thanks to an unprecedented alignment of location, abilities and opportunity. “What started out as some possibilities has turned into a necessity, as we figure out a way to move oil,” said Dan DeRouchey, general manager of BFE.

BFE has agreed to work with Enbridge Pipelines (North Dakota) LLC to operate a rail transfer facility included in a proposed Berthold Station Expansion Project. The new facility, known as Enbridge Berthold South, will have the capability to load one unit-train of 118 railcars per day, with the capacity to ship 70,000 bpd of crude oil directly to market.

The facility will be large enough to stage up to three unit-trains at any given time, and oil will be arrive at the rail facility by pipeline (see related story in this issue).

“I never would have thought we’d have a chance at something like this,” DeRouchey said. “This is a business that is not a sideline. It’s as big or bigger than the grain business we’re already in.”

Benefits for the grain farmer
That grain business, the heart of Berthold Farmers Elevator, is still uppermost in DeRouchey’s mind. He noted the decision to partner with Enbridge was only made after much discussion and consideration about the impact of the changes on area producers and on the grain partnership between BFE and Columbia Grain. “We can go into this to make our grain service better,” he said, “and we’ve thought a lot about how we co-exist.”

According to DeRouchey, the construction of the rail transfer facility will provide a better facility for the grain side of the business, with more trackage and space for more railcars that can be accessed by the grain operations.

“This will give us the ability to load grain out farther, with better access to the spurs for loading,” he said. “We can also upgrade the locomotives used for grain loading.”

Enbridge hired an engineering firm to design the rail transfer facility and trackage, but DeRouchey participated in meetings through the winter. “We made sure the grain part was enhanced also,” he said. “They’ve kept us in mind, and kept the community in mind to take care of community concerns.”

Community safety
DeRouchey believes the agreement to operate a rail transfer facility with Enbridge provides benefits all around. “It’s hard for the railroad to put in more mainline switches and stops, so for BNSF, it’s an opportunity to serve both oil and grain,” he said. “For Berthold Farmers Elevator, as we looked at this, we needed to find a way to come up with some revenue because the crop wasn’t seeded last year. It was necessary to find some sidelines. We’re trying to enhance our profitability.”

The proposed expansion will impact the rail line, especially at the south end of Berthold’s Main Street where the crossings have been a nuisance for local traffic for years.

“This helps the community with issues with crossings in town,” said DeRouchey. “With these upgrades, we’ve figured out a way of making the crossings more accessible. And we’ll move some passing track outside of town, which is a big advantage to the community.”

Enbridge, BFE and city officials all want to reduce traffic congestion at railroad crossings around Berthold. Enbridge will address that issue by closing a portion of 296th Street from the south end of the Wild Rose Cemetery to the junction with 72nd Avenue.

“The concern there is the crossing,” said DeRouchey, who indicated the area on the project map where multiple rail lines intersect with the road. “There’s only a stop sign there now, no light and no [crossing] arms.”

Because area residents typically use that route to approach the cemetery, Enbridge is in discussions with the city to create a different access. “They’re looking at building a road,” DeRouchey said as he pointed to a suggested east-west route that could be developed and connected to the city. Cemetery visitors also have access to the site by turning south on 296th Street from U.S. Highway 2.

Farmers with fields on the north and south sides of the Enbridge facility and U.S. Highway 2 will no longer be able to use 296th Street to move equipment or grain between fields. ”We’re suggesting access to the north side of Highway 2 on County Road 9,” DeRouchey explained, which is one mile west of 296th Street. “We want to have a gated crossing at the railroad tracks there, which would make it a much safer crossing.”

He noted that BNSF officials are predicting an increase in rail traffic over the next 10 years. “Right now, they’re running 30 trains a day through Berthold,” he said. “They’re projecting it’s going to double. For the most part, everybody is excited about the crossings being cleaned up, and [this project] gives us the ability to do that.”

BNSF has cooperated on the expansion project plans and expects minimal impact to the rail line during the construction phase. “They think this facility is the best one they have in North Dakota,” said DeRouchey. “There are going to be track upgrades, but that won’t shut down the BNSF mainline for more than 24 hours.”

The tracks serving the grain elevator will be slightly more impacted during construction, but only for about a week and not during harvest, according to DeRouchey.

“We will be adding grain trackage,” he said, “and this gives us the ability to make some improvements on our grain side. We’re already making plans to expand the grain facility.”

New manager, staff
for rail transfer facility
DeRouchey has been heavily involved in meetings to design and plan the rail transfer facility, but he will not continue in such a direct role. “I plan to shift my duties [there] to a manager,” he said. “We hope to be hiring someone and have them on staff within 45 days.”

That individual will have a separate office, located at the rail facility along with a loading shed and maintenance building.

The new facility will need new staff. “We’re targeting 30 employees,” DeRouchey said. “We’re running 24/7 shifts.”

He said employees would be added in stages during the next six months, with interest already shown among Berthold’s own workforce and Minot area residents. “We’ve had quite a few applicants already. I’ve been pleasantly surprised,” he said. “They’re pretty good paying jobs.”

 Enbridge will cover the project building expenses, estimated at $160 million for the entire expansion project, and take care of operating expenses, according to DeRouchey.

“We’re hoping to have the project complete by February 1, 2013,” he said.

Agriculture and oil
come together
DeRouchey spent 15 years on Berthold’s economic development corporation board, working to entice businesses to locate in Berthold. These days, he smiles at the change in fortunes for the community as the Enbridge Berthold Station Expansion Project brings new jobs to town.

“We’ve been trying to build jobs,” he said. “Now, we’re trying to keep pace with the growth. It’s what the community has been after for a long time.”

Katie Haarsager, Enbridge community relations advisor, agreed. “It’s exciting for Enbridge to know we’re helping community businesses grow, as well as developing transportation options,” she said. “This project shows agriculture and oil can work together in a way that’s beneficial. To be able to be part of that in this community is a great opportunity.”

“This will make our grain handling so much faster and better,” DeRouchey said, “and we’ll have oil on top of it. After all that, we’re going to make some profit and because we’re owned by the farmers, those profits will go back out to the farm community.”