- Associated Press - Monday, March 3, 2014

BISMARCK, N.D. (AP) - North Dakota oil companies won’t be able to drill a well until they craft natural gas capturing plans, state regulators decided Monday.

The state Industrial Commission, which regulates North Dakota’s oil and gas industry, unanimously endorsed the proposal in an attempt to cut down the amount of natural gas that is burned off and wasted as a byproduct of oil production.

Gov. Jack Dalrymple said he was very encouraged by the requiring of plans, one of several self-imposed steps that have been proposed by the industry to curb flaring. But Dalrymple warned that the plans, which are required after June 1, should not be “rubber-stamped.”

“We need to really analyze (the plans) and make sure each gas capturing plan is viable. And if it’s not, it won’t do any good,” said Dalrymple, who is chairman of the Industrial Commission, which also includes Attorney General Wayne Stenehjem and Agriculture Commissioner Doug Goehring as members.

North Dakota drillers currently burn off, or flare, more than 30 percent of the valuable gas - compared to the national average of less than 1 percent - because natural gas pipelines and processing facilities haven’t kept pace with oil drilling. The percentage of flared natural gas in North Dakota has remained around one-third of production in recent years, though the overall volume has dramatically increased.

Lynn Helms, director of the state Department of Mineral Resources, told the Industrial Commission that it’s a difficult balance to cut flaring without impacting oil production and investment.

“The real tool you have is to curtail (oil) production,” Helms said. “But it’s a tool we want to wield with care.”

A group representing hundreds of companies working in North Dakota’s oil patch told state regulators last month that it expects the industry to be capturing 85 percent of the gas by 2016, and 90 percent within six years.

The North Dakota Petroleum Council’s flaring task force said the industry has already invested more than $6 billion in infrastructure to capture natural gas in the past six years and plans to spend at least an additional $1.7 billion over the next two years building gas pipelines and other infrastructure.

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