The Bakken formation's success has hinged on one thing: takeaway capacity. This part of the country has gone from a marginal player in the oil space to delivering nearly 1 million barrels per day, and industry leaders like Continental Resources (NYSE:CLR) see that production number soaring as high as 2 million barrels per day. Considering what it would take to get this region to that kind of production, it seems bizarre that Koch Industries has decided to not build a pipeline from North Dakota to Illinois.
There are very limited reasons why Koch Industries didn't build this pipeline, one of them being a lack of interest by the producers. Tune into the video below to find out why Bakken players like Continental and Oasis Petroleum (NYSE:OAS), and refiners like Phillips 66 (NYSE:PSX), would prefer to not use a pipeline and why it makes better business sense despite the risks associated with rail.