Oil Rules

Vegetation is sparse along this saltwater pipeline right-of-way in Mountrail County pictured June 17. 

North Dakota’s top oil regulator says he is disappointed new rules for gathering pipelines won’t take effect Oct. 1 as proposed, missing a prime construction period.

Lynn Helms, director of the Department of Mineral Resources, said the decision last week by a legislative committee to delay action on some oil rules means pipelines installed this fall won’t be subject to a sweeping new set of regulations approved by the North Dakota Industrial Commission.

The Legislature’s Administrative Rules Committee postponed action on the pipeline regulations until its December meeting, which means the earliest the rules could take effect is now Jan. 1.

The proposed rules include requirements for pipeline installation designed to reduce pipeline spills. Helms estimates that about 75 percent of North Dakota gathering pipeline installation occurs in the fall after crops are harvested and before the ground freezes.

“There likely would have been 1,500 miles that would have been subject to the rules versus won’t be,” Helms said.

Sen. Kelly Armstrong, R-Dickinson, vice chairman of the Administrative Rules Committee, said the committee did not void the proposed rules, but needs to get clarification on some areas before they move forward.

“This is groundbreaking regulation and we want to make sure we get it right,” said Armstrong, adding that the committee did allow several other oil rules to move forward.

The proposed pipeline rules, approved unanimously by the North Dakota Industrial Commission, apply to smaller gathering pipelines that transport oil and produced water — a waste byproduct of oil production — from the well to processing facilities.

The Laborers International Union of North America supported the new pipeline regulations and also wanted to see them take effect Oct. 1.

“We don’t understand why the committee blocked common sense rules designed to prevent harmful spills and tragic accidents,” said spokesman Kevin Pranis. “We strongly support energy development and are tired of seeing our industry’s reputation damaged by shoddy work.”

The rules, which were prompted by high-profile pipeline spills in North Dakota, would require companies to notify state regulators prior to starting pipeline construction or repairs. Gathering pipelines would also need to be inspected by qualified third-party inspectors. In addition, there are new requirements that aim to minimize impacts to wetlands and sensitive areas and standards for how the soil is handled during construction and reclamation.

Troy Coons, chairman of the Northwest Landowners Association, said “the time is now” to implement the new rules.

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“A lot of those relate to the safety or the security that the property owner, the farmer, the rancher needs to feel to sign an easement,” Coons said. “You need to feel like somebody’s looking out for you.”

North Dakota Petroleum Council President Ron Ness called some of the rules “arbitrary and capricious” during the committee meeting last week and said some rules would create confusion.

Legislative committee members questioned whether regulators overstepped their authority and legislative intent when adopting the rules.

Armstrong said legislators also need to research whether any of the rules, including a rule requiring berms around well sites to contain spills, can be applied retroactively.

The Industrial Commission has said the perimeter berm requirement is aimed to contain spills on location, but the Petroleum Council has said the berms are not practical or beneficial in some locations.

Helms said he is waiting for a letter from Legislative Council to outline what specifically needs to be addressed in the rules that were held over for the December meeting.

“I do think there will likely have to be a lot of give and take in order to craft five or six sections of rules that the Administrative Rules Committee is happy with,” Helms said. “I think there will be significant changes in order to make that happen.”

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