North Dakota flaring reduction policy may impact January production

North Dakota production continued to climb in May but new requirements in the state’s flaring reduction plan slowed permitting activity in June and may lead to production curtailments for some operators early next year.

About 75% of permit applications required an extra 2-7 days of processing time while the state contacted operators to obtain additional information on gas processing plans, Lynn Helms, director, North Dakota Department of Mineral Resources, told reporters during a July 14 conference call.

“At least 75% of the permits are missing one or more pieces of information,” Helms said.

The state began requiring operators to submit gas capture plans with permit applications on June 1. Plans include information on area gas-gathering system connections and processing plants; the rate and duration of planned flowback; current system capacity; a timeline for connecting the well; and a signed affidavit verifying that the plan has been shared with area midstream companies.

The next deadline for the flaring reduction plan is fast approaching. The state expects to capture 74% of gas production by Oct. 1, rising to 90% by Oct. 1, 2020 (OGJ Online, July 2, 2014). Operators will submit their October production numbers to the state on Dec. 1 and those that fail to capture and utilize at least 74% of gas production can expect to receive letters from the in December.

“There will be operators who likely will receive letters in December saying ‘In January, you have to curtail production at a list of wells,’” Helms said.

About 72% of statewide gas production was captured in May. The remaining 28% was flared.

The implementation of the flaring reduction policy has not yet impacted production. The state’s Department of Mineral Resources reported July 14 that oil production rose 3.6% to 1.04 million b/d in May—the largest production increase since August. Gas production increased 8.5% to 1.19 bcfd.

North Dakota recently surpassed Alaska to become the second-largest oil-producing state in the US.

The statewide rig count held steady at 191, but completion work was slowed by heavy rains and windstorms near Dickinson and Minot in Stark and Ward counties, respectively. The number of wells awaiting completion increased by 10 to 610.

A surge in completion activity is expected in coming months as operators work to clear backlogs before winter. This should result in production growth of 5-6% in June, July, and August.

Concerns addressed

The state will conduct a meeting with operators next week to answer questions regarding the enforcement of the flaring policy, Helms said. A list of about 60 questions has been compiled so far. “It appears their number one concern is outages on the part of [gas] gatherers and midstream companies that they don’t have any control over,” Helms said.

One large midstream company plans to temporarily take offline compressor plants across southern North Dakota in coming weeks as it works to upgrade their capacity. The rolling maintenance is expected to occur during a 45-day period.

“That’s going to result in some increased flaring and [operators] are very concerned,” Helms said.

The North Dakota Industrial Commission has not revealed how it will respond to the increased flaring but, Helms said, the state will be selective about granting exemptions.

“This policy is only going to make a difference if we’re very strict about granting exceptions to it,” he said.

Contact Rachael Seeley at rachaels@ogjonline.com.

Related Articles

Shell cuts $15 billion in spending for 2015-17

01/30/2015 Royal Dutch Shell PLC has curtailed more than $15 billion in potential spending over the next 3 years, but is not “not overreacting to current low ...

Victoria extends drilling, fracing ban

01/30/2015 The new Victorian Labor government of premier Daniel Andrews has extended the coal seam gas (CSG) exploration and hydraulic fracturing ban in the s...

Chevron’s $35 billion capital budget down 13% from last year

01/30/2015 Chevron Corp. will allocate $35 billion in its capital and exploratory investment program for 2015, including $4 billion of planned expenditures by...

US Senate passes bill approving Keystone XL pipeline project

01/30/2015 The US Senate has passed a bill approving construction of the proposed Keystone XL crude oil pipeline by a 62-36 vote after 3 weeks of debate. Nine...

Oxy cuts capital budget by a third

01/30/2015 In the midst of falling oil prices, Occidental Petroleum Corp., Houston, expects to reduce its total capital spending for 2015 to $5.8 billion from...

MARKET WATCH: NYMEX natural gas prices drop after storage report

01/30/2015 US natural gas closed at its lowest price in more than 2 years on the New York market Jan. 29 following the government’s weekly gas storage report,...

Pennsylvania governor reinstates state forest drilling moratorium

01/29/2015 Pennsylvania Gov. Tom Wolf (D) signed an executive order fully reinstating a 2010 moratorium on new oil and gas leases in state forests and parks. ...

PwC: Low oil prices might drive surge in restructuring in 2015

01/29/2015 Mergers and acquisitions (M&A) in the oil and gas industry hit 10-year highs in terms of deal value and volume in 2014, according to a report f...

DOE could meet 45-day LNG export decision deadline, Senate panel told

01/29/2015 The US Department of Energy would have no trouble meeting a 45-day deadline to reach a national interest determination for proposed LNG export faci...

White Papers

Transforming the Oil and Gas Industry with EPPM

With budgets in the billions, timelines spanning years, and life cycles extending over decades, oil an...
Sponsored by

Asset Decommissioning in Oil & Gas: Transforming Business

Asset intensive organizations like Oil and Gas have their own industry specific challenges when it com...
Sponsored by

Squeezing the Green: How to Cut Petroleum Downstream Costs and Optimize Processing Efficiencies with Enterprise Project Portfolio Management Solutions

As the downstream petroleum industry grapples with change in every sector and at every level, includin...
Sponsored by

7 Steps to Improve Oil & Gas Asset Decommissioning

Global competition and volatile markets are creating a challenging business climate for project based ...
Sponsored by

The impact of aging infrastructure in process manufacturing industries

Process manufacturing companies in the oil and gas, utilities, chemicals and natural resource industri...
Sponsored by

What is System Level Thermo-Fluid Analysis?

This paper will explain some of the fundamentals of System Level Thermo-Fluid Analysis and demonstrate...

Accurate Thermo-Fluid Simulation in Real Time Environments

The crux of any task undertaken in System Level Thermo-Fluid Analysis is striking a balance between ti...

6 ways for Energy, Chemical and Oil and Gas Companies to Avert the Impending Workforce Crisis

As many as half of the skilled workers in energy, chemical and oil & gas industries are quickly he...
Sponsored by

Available Webcasts



Global LNG: Adjusting to New Realties

When Fri, Mar 20, 2015

Oil & Gas Journal’s March 20, 2015, webcast will look at how global LNG trade will be affected over the next 12-24 months by falling crude oil prices and changing patterns and pressures of demand. Will US LNG production play a role in balancing markets? Or will it add to a growing global oversupply of LNG for markets remote from easier natural gas supply? Will new buyers with marginal credit, smaller requirements, or great need for flexibility begin to look attractive to suppliers? How will high-cost, mega-projects in Australia respond to new construction cost trends?

register:WEBCAST


US Midstream at a Crossroads

When Fri, Mar 6, 2015

Oil & Gas Journal’s Mar. 6, 2015, webcast will focus on US midstream companies at an inflection point in their development in response to more than 6 years shale oil and gas production growth. Major infrastructure—gas plants, gathering systems, and takeaway pipelines—have been built. Major fractionation hubs have expanded. Given the radically changed pricing environment since mid-2014, where do processors go from here? What is the fate of large projects caught in mid-development? How to producers and processors cooperate to ensure a sustainable and profitable future? This event will serve to set the discussion table for the annual GPA Convention in San Antonio, Apr. 13-16, 2015.

This event is sponsored by Leidos Engineering.

register:WEBCAST



On Demand

The Future of US Refining

Fri, Feb 6, 2015

Oil & Gas Journal’s Feb. 6, 2015, webcast will focus on the future of US refining as various forces this year conspire to pull the industry in different directions. Lower oil prices generally reduce feedstock costs, but they have also lowered refiners’ returns, as 2015 begins with refined products priced at lows not seen in years. If lower per-barrel crude prices dampen production of lighter crudes among shale plays, what will happen to refiners’ plans to export more barrels of lighter crudes? And as always, refiners will be affected by government regulations, particularly those that suppress demand, increase costs, or limit access to markets or supply.

register:WEBCAST


Oil & Gas Journal’s Forecast & Review/Worldwide Pipeline Construction 2015

Fri, Jan 30, 2015

The  Forecast & Review/Worldwide Pipeline Construction 2015 Webcast will address Oil & Gas Journal’s outlooks for the oil market and pipeline construction in a year of turbulence. Based on two annual special reports, the webcast will be presented by OGJ Editor Bob Tippee and OGJ Managing Editor-Technology Chris Smith.
The Forecast & Review portion of the webcast will identify forces underlying the collapse in crude oil prices and assess prospects for changes essential to recovery—all in the context of geopolitical pressures buffeting the market.

register:WEBCAST


Careers at TOTAL

Careers at TOTAL - Videos

More than 600 job openings are now online, watch videos and learn more!

 

Click Here to Watch

Other Oil & Gas Industry Jobs

Search More Job Listings >>
Stay Connected