North Dakota’s Industrial Commission has made some tweaks to its natural gas capture policy, while keeping the benchmarks for gas capture in place.
The current policy requires companies to capture 88 percent of the gas produced. That rises to 91 percent by November first.
The policy amends the definition of “stranded gas,” and clarifies how the percentage of gas captured is calculated where variances are applied, and it expands when requests for variances would require public notice and a hearing.
North Dakota’s Mineral Resources Director said in order for the state to capture 91 percent of the natural gas produced in the Bakken going forward, it’s going to take a lot of investment in gas gathering pipelines and gas processing plants to make that happen.
Lynn Helms told the state Industrial Commission the industry has already invested $16 billion to process the gas – but it will need another $18 billion over the next several years, or more than $1 billion a year.
"It is going to take a monumental effort," Helms said.
Helms told the Commission that, in drafting these changes, other states’ regulations were considered. He said the plan is designed specifically for North Dakota.
"We do not want to chase drilling and completion investment out of the state of North Dakota to Texas, or Wyoming, or some other state," Helms said. "But at the same time, we can't allow our natural gas to just be flared at the kind of rates we saw as recently as 2018, at 20 percent flaring."
Helms said the new police is an effort to incentivize the industry to invest in infrastructure.
"The revisions we've made to the gas capture policy are the right step at the right time," Helms said. "But I do think, every two or three years, we are going to have to look at this thing, and modify it as time goes on."
Attorney General Wayne Stenehjem -- a member of the Commission -- said he believes the changes are on the right track.
"I appreciate that you were able to come up with a 'North Dakota-centric' plan, to really incentvize the investment in the infrastructure we need," Stenehjem said. "And to really understand it can always be revised."