Plan outlined to reduce flaring

2014-01-29T16:56:00Z Plan outlined to reduce flaringBy NICK SMITH | Bismarck Tribune Bismarck Tribune

BISMARCK, N.D. _ The state Industrial Commission was given recommendations Wednesday for reducing gas flaring to 15 percent within two years and to 10 percent within six years, meaning most of it could be captured and not wasted.

The recommendations from an oil industry task force include advance plans for capturing gas prior to drilling applications, punishing companies that fail to comply and speeding up the process for attaining rights of way.

Gov. Jack Dalrymple said the next step would be for the Department of Mineral Resources to review the recommendations. He didn’t set a timeline for acting on them but said, “I would hope we get right on it.”

The percentage of natural gas flaring in North Dakota was at 30 percent in November, the most recent figures available. According to the U.S. Energy Department’s Energy Information Administration approximately 1 percent of all natural gas in the country is flared.

“We do think 90 percent capture in six years is doable,” said task force chairman Eric Dille, with EOG Resources, Inc. “We (also) do believe 95 percent is possible.”

The task force was launched last fall to develop a plan for reducing the natural gas flaring in the state’s oil patch.

The three-member Industrial Commission received the report Wednesday in the Brynhild Haugland Room of the state Capitol.

Task force members said at least $1.7 billion will be invested in building gas pipelines and other infrastructure over the next two years and that with a full buy-in from all industry and government stakeholders, flaring eventually could drop as low as 5 percent.

Flaring has been an  issue the past few years in western North Dakota with the sharp increase in oil drilling and with less infrastructure in place than in more mature energy plays. It led to the creation of the task force, overseen by the North Dakota Petroleum Council.

Dille said an important recommendation was having a gas capture plan in place prior to drilling. It would require a map of where the well could be connected to a gathering system and the time period for connecting to a system.

Current law says that after one year of production, a well must either be capped, connected to a gas- gathering line or connected to an electric generator that uses at least 75 percent of the gas from a well. Companies can ask the Industrial Commission for exemptions.

“What this does is front-load that process,” Dille said. “This is a very important component of what we’re proposing.”

The task force recommended a tentative date of June 1 for the Industrial Commission to require such plans for new wells. It also recommended having gas-capture plans submitted by Sept. 1 for current wells that flare the largest volumes of gas and recommended plans by March 1, 2015 for wells flaring for more than 90 days.

Dille said another recommendation was for the state to continue its support of the industry’s efforts to develop new technologies and build infrastructure.

Other suggestions include tax credits and low interest loans for companies putting infrastructure in place and pipeline hotline to give landowners a notification system for reporting problems.

Dille said the plan is only workable if all stakeholders are serious about following through.

“Achieving these targets requires full engagement by the state, counties, Industrial Commission, tribes, landowners and industry,” he said.

Agriculture Commissioner Doug Goehring said the flaring issue is a huge challenge and thanked the task force for its work.

“It’s not just a report, you brought solutions,” Goehring said.

Wayde Schafer, a spokesman for the Sierra Club of North Dakota, said the recommendations seemed like a good start.

“My first impression is that a good job is getting it (flaring) down to 10 percent,” Schafer said.

Flaring the gas is wasteful, a loss of money to mineral owners and hurts the environment, Schafer said. It should be reduced as soon as possible, he said.

“We’re hoping that they would be able to do it on a quicker timetable,” Schafer said.

Reach Nick Smith at 250-8255 or 223-8482 or at nick.smith@bismarcktribune.com.

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View the North Dakota Industrial Commission Department of Mineral Resources Oil and Gas Division oil well daily activity reports.

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