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North Dakota Expands Its Regulation of Gathering

North Dakota's legislature this year passed a law that will expand the state's oversight of the oil/natural gas industry to gathering pipelines, a growing part of the industry infrastructure.

The most important oil/gas bill to come out of this year's state legislative session, according to Department of Mineral Resources (DMR) analyst Alison Ritter, is a "super bill" (HB 1358) that Ritter said took the best concepts of all of the major legislative proposals this year and combined them in one bill.

It includes funding for oilfield cleanup work and remediation of salt-contaminated soils, but the major thrust is expansion of the authority of DMR's oil/gas division -- begun two years ago -- to oversee gathering pipelines, a largely unregulated segment of the industry. The division was first given limited authority over gathering infrastructure by state lawmakers in 2013 through legislation (HB 1333) requiring operators to report where, when and how new gathering pipelines were placed in service.

Under the expanded authority, the state can now require from operators bonds on gathering pipelines, engineering design drawings, lists of independent inspectors, and results of inspectors' pressure test certificates filed within 60 days of performing the test, according to Ritter.

The move comes on the heels of the fourth in a series of methane emission studies sponsored by the Environmental Defense Fund (see Shale DailyAug. 17).

In a recent interview, the study's principal author, Anthony Marchese, professor of mechanical engineering and director of the engines/energy conversion laboratory at CSU, said there are an estimated 445,000 miles of gathering pipelines nationally and they are all largely unregulated. The methane emissions study concentrated on gathering facilities and processing plants, leaving essentially undocumented the pipelines contribution to the overall emissions.

"The adoption of HB 1358 once again represents the state expanding regulations into uncharted territory; we are the first state to implement gathering pipeline rules," Ritter wrote in an analysis of the law in Bakken Magazine. She noted that the law also allocates funding for research into the best available pipeline monitoring technologies. She added that North Dakota is expecting another 40,000 miles of gathering pipelines to be installed as the Bakken/Three Forks shale plays grow.

When the research is completed, it is expected to allow DMR's oil/gas experts to "write feasible, cost-effective pipeline monitoring rules necessary for improving pipeline safety and integrity based on the results of the study," Ritter said.

Additional staff is already in place at DMR to take on the expanded oversight responsibilities, Ritter said. HB 1014 authorized 22 new full-time-equivalent positions for the DMR with eight positions assigned to getting the gathering pipeline regulation started.

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