A number of oil companies have asked the state Department of Mineral Resources for clarification of the new rules regarding natural gas flaring.
The rules – adopted by the state Industrial Commission July First – could lead to temporary reduced production on oil wells that don’t have gas capture plans. Mineral resources director Lynn Helms says companies have asked to meet with him next week to discuss the new rules. Helms says the companies have submitted a number of questions – but he says the major concern has to deal with outages by gas gathering companies.
"There are ging to be rolling compressor plant down times across southern North Dakota, as one of the big midstream companies increases capacity at all of their plants," said Helms. "Over about 45 days, every one of those compressor stations will be down. That's going to result in increased flaring."
Helms says the oil companies are concerned about how the Industrial Commission is going to deal with that.
Helms says the May production report shows 28 percent of natural gas is still being flared – and he had hoped that would be reduced further. Helms says most of that flaring is in McKenzie County, in an area south of Lake Sakakawea.
"A lot of that flaring is in an area that would normally cross Lake Sakakawea and go to the Tioga gas plant," said Helms. "But there's a significant delay in a pipeline expansion and compressor expansion in the Keene area. It's coming from delays in getting federal permits."
Helms says as a result, the Tioga gas plant was operating at only about half its normal capacity.
Earlier, the Industrial Commission had adopted rules requiring proposed new wells to have gas capture plans before drilling permits are issued.
"About 75 percent of the permits are requiring a hold be put on the permit of anywhere from 2 to 7 days, while some questions get asked and answered," said Helms. "They're missing one or more pieces of information. There are about a half-dozen that are on a long term hold, because the gas capture isn't going to be expanded until the third or fourth quarter of 2014."
Helms says the goal is to cut the amount of flaring to 26 percent by October first. That figure won't be known until January, when the October reports come in to the department.
