As North Dakota legislators consider what a decrease in oil and tax revenue could do to spending in the next biennium, the industry is hoping for a breather from costly regulations.
“Let’s stop kicking the goose here for a while,” North Dakota Petroleum Council President Ron Ness told members of the House Appropriations Committee on Jan. 8. “Let’s continue to use common sense on regulations.”
Ness foresees plenty of regulations to come from the federal government. The Bureau of Land Management’s plans to revise hydraulic fracturing rules and a crackdown on venting and flaring on federal and tribal lands could slash Fort Berthold Indian Reservation production by 70,000 to 90,000 barrels per day. In addition, potential endangered species listings could affect 20 rigs in the Bakken.
Rep. Roscoe Streyle said state regulations have put on a strain on production growth.
“We’ve way overshot the regulatory. We’re hammering these guys with unnecessary regulations,” he said. “So when is the assault on the regulations going to stop and slow down? We’re competing in a world market now and yet we have some of the most restrictive regulations in the world.”
Department of Mineral Resources Director Lynn Helms said that he doesn’t have any more planned and acknowledged that in terms of flaring reduction and oil conditioning, 2014 was a “major year” for regulatory moves. However, he said the flaring targets were issued as part of an order which makes them flexible for the North Dakota Industrial Commission to regulate, meaning the optimistic 85 percent capture mark set for Jan. 1, 2016, could potentially be lowered if it appears to be unattainable (see related flaring stories on pages 5 and 6).
Ness said the industry is hoping to “hunker down” and get through the slump in the oil market, but the additional regulatory costs have been substantial so he encouraged the committee to use common sense on further regulation, not only at home but with its neighbors. He told legislators to contact Minnesota leaders to push for approval of Enbridge’s Sandpiper pipeline that would transport Bakken crude from Tioga through Minnesota to a terminal in Superior, Wisconsin.
“Prove to Minnesota that it would have been a big deal right now. We could have been getting barrels to good markets,” Ness said.
- Maxine Herr