FARGO – Money to start construction sooner than later on a project designed to keep the taps running here in times of severe drought could be evaporating because of the plunge in oil prices.

At the same time, a new plan to deliver water to a proposed fertilizer plant near Jamestown is gaining steam, and it is similar in many respects to the project designed to pipe water to the Red River Valley.

Gov. Jack Dalrymple’s budget recommendations for 2015-17 included

$150 million to start building the Red River Valley Water Supply Project, intended to carry Missouri River water to the valley to augment local water sources during prolonged droughts.

But construction funding was stripped by the Senate, which confronted a sharp drop in funds available next biennium for water projects – from an anticipated $930 million in Dalrymple’s budget to $500 million.

The House has yet to act on water project appropriations and last week heard committee testimony on water needs. The priority list endorsed by the Senate was based on input from the North Dakota Water Coalition and others.

North Dakota’s primary funding source for water projects relies heavily on oil extraction taxes, which are projected to drop sharply over the next two years, prompting legislators to make sharp cuts in planned spending.

Under the Senate Appropriations Committee’s estimated future water needs, based on priorities from the State Water Commission, construction funds for the Red River Water Supply project wouldn’t begin until 2019-20, with $150 million toward a project estimated to cost between $825 million to $1 billion.

The Senate water project plan does, however, maintain state funding for the Fargo-Moorhead flood control diversion, and Rep. Al Carlson, R-Fargo, said he will continue to press for state matching money to help the city build flood protection projects independent of the diversion.

An aide for Dalrymple said a delay in construction funding for Red River water supply does not mean the state is abandoning its support for the project.

“Everybody knows that getting water to the Red River Valley is important,” said Andrea Travnicek, Dalrymple’s senior policy adviser for natural resources.

Engineering and environmental studies for the project are continuing, she said.

But given the budget crunch caused by the plunge in oil prices, policy makers have been forced to concentrate on funding projects next biennium that are “shovel ready” or soon will be, Travnicek said.

Pipeline to serve plant

As funding for the Red River Valley project hit a snag, plans have been emerging for a possible pipeline to deliver Missouri River water to the planned $3 billion CHS fertilizer plant at Spiritwood, which would use natural gas from western North Dakota.

CHS, a Fortune 100 enterprise based in Inver Grove Heights, Minn., announced plans last fall the facility, which it estimated at the time would use 2,400 to 2,700 gallons of water per minute, mostly for cooling.

The company, owned by shareholders and agricultural cooperatives, has acquired land and taken other steps forward, but has told state officials it won’t break ground on the Spiritwood plant until it is satisfied it has an adequate long-term water supply.

Spiritwood is a few miles east of Jamestown, about 75 miles west of Fargo.

The plant’s need for water led to the idea of a pipeline to carry Missouri River water, the Central Dakota Water Supply Project, which could serve CHS and other users in the growing Spiritwood industrial complex.

Water supplies from local aquifers and the James River could meet the fertilizer plant’s needs for an estimated five to eight years, according to figures given last week at a State Water Commission meeting.

But they would constrain available water supplies and could not assure the plant would have adequate water in droughts, water commissioners were told. That would be the case even with plans for significant use of recycled wastewater for the CHS plant.

“We must secure a permanent, reliable source of water at reasonable cost,” Lani Jordan, CHS’s director of corporate communications said in a statement.

“While water sources are available, we must be assured permanent, reliable availability. We continue to work with state and local officials on a range of solutions, but have not yet reached a conclusion.”

Bruce Engelhardt, an engineer and director of development for the State Water Commission, said studies evaluating pipeline size alternatives for the Central Dakota Water Supply Project should be finished in about a month.

Options include a pipe large enough to serve just the CHS plant, one that would also serve other users in the area and a third option that would allow for significantly more water for industry and farmland irrigation.

Early cost estimates, depending upon water intake and pipe route alternatives, range from $250 million to $500 million, he said.

Similar projects

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The water intakes likely would be along the Missouri near Washburn or south of Bismarck, as contemplated for the Red River Valley Water Supply Project. Results of studies determining which intake location would be best are expected by summer.

Those intake locations and pipeline routes were selected to avoid lengthy federal environmental reviews that can mire projects in delays.

The Central Dakota Water Supply Project’s route options include following a pipeline corridor that was being secured for the Red River Valley Water Supply Project. Both projects identified a route that largely follows Highway 200 as promising.

Because the pipeline to carry Missouri River water to the Red River would connect two watersheds – sparking concerns about transferring aquatic species or diseases – it’s unlikely the same pipeline could serve both the Central Dakota and Red River projects, Engelhardt and other State Water Commission staff members said.

“It causes more problems than it solves,” Engelhardt said.

Proponents of carrying Missouri River water to the Red River have long met stiff resistance from Canada and Minnesota over concerns about impacts to water quality. As a result, North Dakota officials have for years proposed treating water before it enters the Red River Basin.

Opposition also comes from Missouri and other states downstream on the Missouri River opposed to removing water from the Missouri, a concern about water quantity, even though North Dakota officials contend any transfers would be miniscule.

“It’s a very complex project,” Travnicek said of the Red River Valley Water Supply Project, given the thicket of political and environmental issues it entails, and agreed that it is better to pursue Central Dakota Water Supply as a separate project.

The Central Dakota project, because it keeps the water within the Missouri River Basin, is a much simpler project, and therefore easier to fast-track, Travnicek and others said.

Funding could change

CHS expects “clarity” on long-term water solutions and final details concerning its construction contract for the fertilizer plant within three months, Jordan said.

The water funding plan passed by the Senate contemplates providing $140 million in state funds for the Central Dakota water project in the 2017-19 budget, two years before construction funds would flow to the Red River project.

Carlson, the House majority leader, said his chamber will put its own stamp on the water funding bill. “I guarantee it’s going to have a whole different face on it when it comes out of the House,” he said.

Harley Swenson, a State Water Commission member from Bismarck, said it wouldn’t be a prudent use of state money to appropriate construction money for the Red River water project with so many hurdles yet to clear.

In the meantime, in the event of a prolonged drought, Fargo has a backup water source from Lake Ashtabula on the Sheyenne River, and also could draw water from the Devils Lake outlet, subject to constraints on sulfate levels, officials said.

“But if we were to have a drought period, they would be coming up short with water,” Swenson said of Fargo and other cities along the Red River.

Some have suggested, Swenson added, that it might take a crisis to finally enable Missouri River water to flow to the Red River.