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

EPA approves Magellan’s Corpus Christi splitter project

12/12/2014 The US Environmental Protection Agency has issued a final greenhouse gas prevention of significant deterioration construction permit to Magellan Pr...

Keyera to take majority interest in Alberta gas plant

12/12/2014 Keyera Corp., Calgary, will pay $65 million (Can.) to buy a 70.79% ownership interest in the Ricinus deep-cut gas plant in west-central Alberta.

PBF Energy, PBF Logistics make management changes

12/12/2014 Matthew Lucey, currently executive vice-president of PBF Energy Inc., will succeed Michael Gayda as the company’s president. Todd O’Malley, current...

TAEP: TPI still peaking, but ‘contraction unavoidable’ as oil prices fall

12/12/2014 The Texas Petro Index (TPI), a composite index based on a comprehensive group of upstream economic indicators released by the Texas Alliance of Ene...

MARKET WATCH: NYMEX crude oil price extends slump

12/12/2014 Crude oil prices extended their slump on the New York market with a Dec. 11 settlement of less than $60/bbl for January, and prices continued downw...

US needs more data before ending crude export ban, House panel told

12/11/2014 Much more environmental impact information is needed before the US can reasonably remove crude oil export limits, a witness told a House Energy and...

BOEM raises offshore oil spill liability limit to $134 million

12/11/2014 The US Bureau of Ocean Energy Management increased the liability limit for oil-spill related damages from offshore operations to $134 million from ...

Rosneft, Essar sign terms of oil supply agreement

12/11/2014 OAO Rosneft and Essar Energy PLC have signed key terms of an oil supply agreement in New Delhi. Rosneft said shipments to India may begin in 2015.

Barton introduces bill to remove US crude export limits

12/11/2014

US Rep. Joe Barton (R-Tex.) introduced legislation that would remove US crude oil export limits that have been in place for nearly 40 years.

White Papers

AVEVA NET Accesses and Manages the Digital Asset

Global demand for new process plants, power plants and infrastructure is increasing steadily with the ...
Sponsored by

AVEVA’s Approach for the Digital Asset

To meet the requirements for leaner project execution and more efficient operations while transferring...
Sponsored by

Diversification - the technology aspects

In tough times, businesses seek to diversify into adjacent markets or to apply their skills and resour...
Sponsored by

Engineering & Design for Lean Construction

Modern marketing rhetoric claims that, in order to cut out expensive costs and reduce risks during the...
Sponsored by

Object Lessons - Why control of engineering design at the object level is essential for efficient project execution

Whatever the task, there is usually only one way to do it right and many more to do it wrong. In the c...
Sponsored by

Plant Design for Lean Construction - at your fingertips

One area which can provide improvements to the adoption of Lean principles is the application of mobil...
Sponsored by

How to Keep Your Mud System Vibrator Hose from Getting Hammered to Death

To prevent the vibrating hoses on your oilfield mud circulation systems from failing, you must examine...
Sponsored by

Duty of Care

Good corporate social responsibility means implementing effective workplace health and safety measures...
Sponsored by

Available Webcasts


On Demand

Optimizing your asset management practices to mitigate the effects of a down market

Thu, Dec 11, 2014

The oil and gas market is in constant flux, and as the price of BOE (Barrel of Oil Equivalent) goes down it is increasingly important to optimize your asset management strategy to stay afloat.  Attend this webinar to learn how developing a solid asset management plan can help your company mitigate costs in any market.

register:WEBCAST


Parylene Conformal Coatings for the Oil & Gas Industry

Thu, Nov 20, 2014

In this concise 30-minute webinar, participants have an opportunity to learn more about how Parylene coatings are applied, their features, and the value they add to devices and components.

register:WEBCAST


Utilizing Predictive Analytics to Optimize Productivity in Oil & Gas Operations

Tue, Nov 18, 2014

Join IBM on Tuesday, November 18 @ 1pm CST to explore how Predictive Analytics can help your organization maximize productivity, operational performance & associated processes to drive enterprise wide productivity and profitability.

register:WEBCAST


US HYDROCARBON EXPORTS Part 3 — LNG

Fri, Nov 14, 2014

US LNG Exports, the third in a trilogy of webcasts focusing on the broad topic of US Hydrocarbon Exports.

A discussion of the problems and potential for the export of US-produced liquefied natural gas.

These and other topics will be discussed, with the latest thoughts on U.S. LNG export policy.

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