- Associated Press - Wednesday, May 21, 2014

BISMARCK, N.D. (AP) - Gov. Jack Dalrymple told a huge oil industry conference Wednesday that North Dakota would no longer allow flaring of natural gas from oil wells in the Bakken region for longer than one year.

Speaking as part of the Williston Basin Petroleum Conference, which has more than 4,000 people registered, Dalrymple said that North Dakota law allows flaring for one year after production at an oil well begins. After that period, the company must either seek an exemption to continue flaring or install equipment to capture the gas.

In the past, North Dakota has routinely granted exemptions to the flaring limit.

“Those days are over,” Dalrymple said. “We’re not going to do that anymore.”

He said the state will require oil companies to present a “gas capturing plan” for each new well drilled in North Dakota, setting out how they will gather or use the natural gas one year after production. The hope is that the plans will prevent the need for extensions, a spokeswoman for the governor, Jody Link, said later.

Last year, members of the North Dakota Petroleum Council, a group that represents more than 500 companies working in the state’s oil fields, formed a flaring task force to work toward a reduction in flaring with the state.

Dalrymple applauded a recently upgraded Hess gas plant in Tioga that is set to reduce the company’s flaring rate in the state, but said more needs to be done on the issue.

“We’re battling flaring on a daily basis,” said Dalrymple, a Republican.

The North Dakota Senate last year rejected an attempt to legislate an end to flaring beyond one year, voting 34-13 against taking action. One lawmaker said during debate that the amount of gas wasted could heat 500,000 homes, and that photographs of North Dakota taken from space showed numerous flares illuminating the night sky. But other lawmakers said the booming oil industry should be given more time to develop the infrastructure to capture the gas.

In March, North Dakota burned off 33 percent of all gas produced in the state, far more than the 1 percent flaring rate nationally, according to the U.S. Department of Energy. That was down from 36 percent in December, which matched the all-time high for flaring in North Dakota.

State Mineral Resources Director Lynn Helms downplayed North Dakota’s high flaring rate. He said 99 percent of North Dakota gas is associated gas, or gas that is produced as a result of oil production. He said other oil producing states have a much less associated gas.

Natural gas is a byproduct of oil production. But when there is no infrastructure to capture it or re-use it, gas at oil wells is burned off.

Dalrymple and Helms spoke at the conference as North Dakota’s oil industry was poised to reach another milestone.

Helms said North Dakota’s oil production for April will likely pass the one million barrels per day mark. In March, the state produced 977,000 barrels per day.

Helms said that out of the 65,000 oil fields worldwide, only 150, including the Bakken, have produced more than one billion barrels of oil. North Dakota has generated more than 850 million barrels of Bakken crude, and Montana has produced more than 150 million barrels as of the first quarter of this year.

Helms said that over the next decade, North Dakota can expect to produce another billion barrels of oil every two to three years.

“We’re just scratching the surface at this point,” Helms said.

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