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Vol. 18, No. 52 Week of December 29, 2013
Providing coverage of Bakken oil and gas

Tightening industry rules

New North Dakota regulations put gathering pipelines under state jurisdiction

Maxine Herr

For Petroleum News Bakken

North Dakota officials often boast of having some of the toughest oil and gas rules in the nation. Now they’re poised to tighten the reins even more.

At the state’s Dec. 19 Industrial Commission meeting, Department of Mineral Resources, DMR, Director Lynn Helms brought revised administrative rules for the commission’s approval.

One particular rule change requires the state to regulate all gathering pipelines that carry oil, water, gas or carbon dioxide from the edge of the facility, typically a well pad or tank battery site, to a pipeline governed by the Public Service Commission.

The new rules are a result of House Bill 1333 from the 2013 legislative session, which includes a requirement for oil and gas pipeline companies to provide the locations of these lines. The legislature directed the commission to create a system that will allow every pipeline since Aug. 1, 2011, to be registered in a state GIS map. The map data must include the diameter, building material, pressure, fluid passing through, and burial depth of every pipeline.

Leading the nation with baby steps

This revision to the rules would give the Industrial Commission jurisdiction over 18,000 miles of gathering pipeline and an additional approximately 30,000 miles expected to be built.

“This is an enormous change in regulatory authority,” Helms told the commission. “To this point, gathering pipelines have not been regulated.”

In fact, North Dakota would be the only state in the nation to have such rules. Helms says the only other place with gathering pipeline regulations is Alberta, and DMR Public Information Officer Alison Ritter told Petroleum News Bakken following the meeting that Helms poured over all 86 pages of the province’s rules to find the portions within it that apply to self-certification.

Under the new rules, pipeline companies will be required to supply an engineer-certified statement indicating each detail of the gathering pipeline. Helms told the commission that companies installing the pipelines must certify that the line will not interfere with road construction, agriculture or utilities, and if there are any complaints, the commission “could take enforcement action.”

“It offers protection because if there’s a problem, we can go back and check that certification,” Ritter told Petroleum News Bakken. “It ensures less error on the part of the pipeline.”

One of the additional requirements to accompany the GIS data is a description of how the company will monitor the life of the pipeline. Once it is purged or dug out, that information must enter the file, too.

“So if you’re a landowner, you can look and see what is buried under there, whether it is active or abandoned and how it was abandoned,” Helms explained to the commission.

The new rules are “baby steps,” Ritter said. “Due to the sheer amount of pipelines we’ll need and the timeframe we have to develop them, something needed to be done. There’s nothing on the books to this point, so it’s just the beginning of more rules regulating pipelines. It’s a baby step, but it’s a big baby step.”

Ritter said the department plans to add three additional staff to manage the workload that this new oversight will require.

Pipeline monitoring task force

During discussion of the revised rules, Gov. Jack Dalrymple announced a new pipeline monitoring task force he formed to “edge out what the right standards are for North Dakota.” The goal of the task force is to gather information on new technologies and best practices available for safe pipeline operations in North Dakota. Justin Kringstad of the state’s Pipeline Authority told Petroleum News Bakken the 14-member group will hold its first meeting in January. In addition to Kringstad, the task force consists of engineers, industry representatives, and state regulators.

“There’s a lot to learn here,” Dalrymple told Helms and the commission. “While there are many different approaches, my belief is technology is the greatest single opportunity to improve safety.”

Hoping for university research

In response, Helms informed Gov. Dalrymple of a recent conversation he had with North Dakota State University Vice President of Research Kelly Rusch regarding this topic, suggesting the university should research today’s fiber optic technology.

Ritter told Petroleum News Bakken that Helms wonders if there is a way to place fiber optics underground with the pipelines to potentially detect something before the spill comes to the surface.

Other rule changes approved by the commission provide surface owner protections regarding tanks and flare stacks, and establish a process for obtaining tax incentives to encourage operators to reduce flaring.

After review by the attorney general’s office, the proposed rules will go the Legislature’s Administrative Rules Committee for approval. Once finalized, the rules are expected to take effect April 1, 2014.

“The Department of Mineral Resources, Oil and Gas Division considered the rule changes made in the 2009-2011 biennium to be some of the most significant in state history,” Helms said in a press release following the meeting. “We believe these changes go beyond that level of importance.”

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