Industry Task Force Makes Proposals To Increase Natural Gas Capture In North Dakota

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In late-January, the North Dakota Petroleum Council’s task force on natural gas flaring released its much-anticipated recommendations to the North Dakota Industrial Commission, the administrative body that regulates oil and gas wells in the state.  The task force made several proposals with the aim to increase the amount of natural gas captured at wellheads, including requiring the submission of gas capture plans before drilling, easing right-of-way access for pipelines, and providing incentives for building critical infrastructure. 

The first proposal—requiring gas capture plans prior to drilling—would require a change in the current administrative approval process for wells.  As it stands, North Dakota state statute (N.D.C.C. § 38.08.06.4) restricts natural gas flaring after one year from the date a well first begins producing.  Once the one-year grace period expires, flaring must cease by capping the well or through measures to capture natural gas, unless the producer obtains an exemption from the North Dakota Industrial Commission.  Compliance with the exemption process is currently the subject of several putative class-action lawsuits against oil and gas producers in North Dakota.  The task force’s proposal would, presumably, require a change in state law to compel plans for capturing gas at the wellhead before drilling even commences. 

Once natural gas is captured, however, producers must have a way to transport it.  And while there’s some movement toward building natural gas pipelines to service the area—including a proposed 375-mile pipeline from McKenzie County in western North Dakota to an interconnection hub in northwestern Minnesota—there’s also resistance among landowners, particularly farmers, who are frequently asked for easements on their property.  The gas flaring task force recommended the formation of another group to assess potential legislation and policy changes that would enhance right-of-way access for natural gas pipelines.

Adopting its proposals, the task force indicated, could increase total gas capture in North Dakota to 90 percent within six years, and eventually achieve the task force’s goal of 95 percent gas capture.

 

Topics:  Energy, Natural Gas, Oil & Gas

Published In: Energy & Utilities Updates, Zoning, Planning & Land Use Updates

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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