North Dakota oil production surged in September to a record 1.36 million barrels per day, state regulators said Friday.
But winter weather, workforce shortages and inadequate infrastructure to capture natural gas are projected to slow that growth in the coming months, Director of Mineral Resources Lynn Helms said.
The state's natural gas production hit an all-time high of 2.5 billion cubic feet per day in September, preliminary figures show.
“The oil and gas industry in North Dakota broke virtually every record in September,” Helms said.
The industry captured nearly 2.1 billion cubic feet per day of natural gas, a record for the state, Helms said. But the volume of natural gas flared also hit a record in September at 457 million cubic feet per day.
The industry captured 83 percent of Bakken natural gas, missing the North Dakota Industrial Commission target of 85 percent for the fifth month in a row.
The gas capture target increased to 88 percent on Nov. 1.
However, the North Dakota Industrial Commission, led by Gov. Doug Burgum, is expected to take action on Tuesday on changes to the gas capture policy. Helms said Friday it was too early for him to comment on what he is recommending.
Meanwhile, the Bureau of Land Management recently met with officials from the state and the Mandan, Hidatsa and Arikara Nation about upcoming changes to how the federal agency regulates flaring.
Under the revised Waste Prevention Rule, the BLM intends to defer to state and tribal regulation of flaring.
The BLM also plans to develop a memorandum of understanding with the state and with MHA Nation related to sharing data and making a determination about whether an operator is in compliance with flaring regulations, said Loren Wickstrom, field manager for the BLM North Dakota Field Office.
“We’re at the beginning stages of trying to sort that out,” Wickstrom said.
If an operator is determined to be flaring natural gas in violation of state or tribal regulations, a royalty payment would be owed to the federal government.
“We want to deal with the flaring issue," Wickstrom said. "Not only is it a loss of revenue, but it is also having impacts on the visual aesthetics of the area as well as the air quality.”
About one-third of Bakken wells have at least a small percentage of federal minerals, Helms said.
“It’s going to be a very significant change,” Helms said.
The revised rule takes effect on Nov. 27. Because oil and gas production figures are released two months later, Helms said the goal is to have agreements in place by early February to address December production.
Natural gas flaring is expected to be even higher in October, Helms said, in part due to maintenance at a natural gas processing plant near Williston.
In August, 10 companies captured less than 85 percent of Bakken natural gas, but none were ordered to restrict oil production under the state’s policy. The number of companies that missed the gas capture target in September is still being evaluated.
The number of producing oil and gas wells also hit a record in September at 15,287.