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Published August 09, 2012, 04:46 PM

Oil partnerships strengthen N.D. farmers elevator

Fourteen months ago, the general manager of the Berthold Farmers Elevator worried how he would keep everyone on the payroll during such a wet season.

BERTHOLD, N.D. — Fourteen months ago, the general manager of the Berthold Farmers Elevator worried how he would keep everyone on the payroll during such a wet season.

Today, as a result of two partnerships with the oil industry, the elevator is poised to nearly double its revenue and add up to 40 new workers.

The most significant collaboration is an Enbridge Pipelines expansion that includes a railcar loading facility operated by elevator employees.

“It’s going to be a big deal for us,” says Dan DeRouchey, who manages elevators in the towns of Berthold and Carpio, N.D., which are about 25 miles northwest of Minot, N.D.

DeRouchey began looking for sidelines for the grain elevator last spring when wet weather prevented farmers from getting crops in the ground.

The first venture was to partner with oilfield service company Schlumberger to take sand from railcars and load it onto trucks that haul it to the Oil Patch for hydraulic fracturing.

The elevator charges $400 per car for track space and a third party unloads the sand. DeRouchey estimates the elevator sees 150 railcars of sand or ceramic material used for fracking per month.

“They just needed a spot to unload the cars,” DeRouchey says.

Then DeRouchey, who was familiar with Enbridge’s existing pipeline and other infrastructure in Berthold, approached Enbridge about working together.

Construction is under way on a major expansion that will add 80,000 barrels per day of takeaway capacity by rail early next year.

Starting in September, Enbridge will load about 100,000 barrels per week, or one unit train per week, from truck to railcars, says Matt Faith, a manager with Enbridge.

The railcar loading facility is expected to be complete in January.

“The demand is insatiable,” Faith says.

The crude loading operation will nearly double the elevator’s net revenue and add high-paying jobs, DeRouchey says. Farmers will benefit from the partnership through dividends and through upgraded elevator facilities.

“They’re going to share in that profit,” DeRouchey says.

The frack sand loading operation is primarily during the off-season so it doesn’t conflict with harvest, he says.

“Our mission is to take care of the farmer.”

Berthold Mayor Alan Lee says the city is adding about 350 acres of property used by Enbridge to expand the its property tax base. That extra income will help the city make street and sewer improvements and help the city establish its first police force.

“We can pay for this without going to the local taxpayer,” Lee says.

The Berthold Farmers Elevator will continue to look for other ways to partner with the oil industry.

“It was just driven by a need to find a source of income,” DeRouchey says.

Editor's Note: This article is from Forum Communications, which owns Agweek.

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