North Dakota oil producers now have clear guidelines to ensure efforts to reduce flaring.
As part of new flaring policy put in place by the North Dakota Industrial Commission, NDIC, operators will need to submit gas capture plans with all drilling permits starting June 1. On May 9, the Department of Mineral Resources, DMR, sent a letter to all oil operators outlining the necessary components of the gas capture plans.
The plans must include an affidavit signed by a gas gatherer indicating the anticipated completion date and production rates of the well in an effort to help midstream companies make the necessary business plans to meet demand. A detailed gas gathering pipeline system map that provides the name and location of the destination processing plant, the name of the gatherer and line locations, and proposed routes must be provided. The operator must also offer information on the existing line to which it plans to connect, current and anticipated capacity, and any expansion plans for the area. The permitting office will require an anticipated date of first production as well as oil and gas rates. Operators will need to share how much gas is flaring and what alternatives will be put into place.
DMR is hopeful, but ‘not so naive’
DMR informed operators that permits may be delayed or they may face production curtailment if they do not connect the well and find alternatives to flaring in a timely manner. The gas capture plans are required for any drilling permits for the Bakken, Three Forks, Three Forks/Bakken or Sanish pools.
Permit manager Todd Helweger stated in the letter that NDIC believes a concerted effort by operators in North Dakota is necessary in order to get flaring reduced and to promote beneficial use of the gas. DMR Director Lynn Helms said he is hopeful for successful flaring reduction because of the way the industry is cooperating with each other, as well as with regulators, to find ways to capture natural gas.
“I think it’s all going to come together. I really believe the gas capture plans are going to be a paradigm change for the industry that is really going to change how much flaring we have in North Dakota,” Helms said. “But I’m not so naïve as to think that they will happen on autopilot. The Industrial Commission is going to have to be the policemen to make sure that gas capture plans line up with industry goals and that individual companies are sticking to those gas capture plans.”
The new policy goes into effect about a month before NDIC will receive proposed revised field orders on production restrictions and permit requirements. On April 22, NDIC held a flaring hearing to receive constructive comments before drafting the orders, and DMR is currently reviewing those comments. Helms said NDIC wanted the gas capture plans to be in place for a couple of weeks before they are presented with a draft of the new orders, so NDIC is expected to vote on the new orders at their July 1 meeting.
