Proposed rule changes for handling drilling waste products and hydraulic fracturing (fracking) were approved Tuesday by the North Dakota Industrial Commission. They drew an immediate negative reaction from the North Dakota Petroleum Council, which claimed the changes would add up to $300,000 of added costs/well.
The changes will be the subject of a Nov. 1 public hearing followed by a public comment period through Nov. 14, a spokesperson for the state Oil/Gas Division told NGI Thursday. New rules would not be effective until April 1 next year. In the interim the oil/gas unit must review all of the comments and eventually send the rules through a review by the state attorney general's office.
With the boom ongoing in the Bakken shale play in the state, North Dakota Oil/Gas Division officials estimate that up to 25,000 or more new wells could be drilled in the state in the years ahead. Activity in the Bakken/Sanish/Three Forks play is surging. According to NGI's Shale Daily Unconventional Rig Count, drilling in the play has increased 35% from 143 rigs for the week ending Sept. 17, 2010 to 193 rigs for the week ending Sept. 16, 2011.
In the wake of record spring flooding, reserve pits tied to drilling activity were linked to more than 30 spills of drilling fluids, according to a report in the Bismarck Tribune. Spring snow melt overflowed the pits, according to the news report, quoting Oil/Gas Director Lynn Helms as estimating that the state is only about 10% into the full drilling program anticipated eventually throughout the Bakken.
The rules will only apply to new wells, according to Helms and the industrial commission, which includes the state tripartite of the governor, state attorney general and agricultural commissioner. Separately, the trio also approved moving ahead with two studies on the impacts of the oil industry on both wildlife and roadways in the state.
For fracking, a new section in the oil/gas rules is proposed. The proposed rules would call for operators posting information on an Internet-based FracFocus Chemical Disclosure Registry after fracking is completed.
North Dakota officials emphasized that their state has begun looking at the various impacts of the oil and gas development very early in the ramping up of the drilling. Other states have done the same studies, but later in the drilling process.
State petroleum council officials called the new approach a "very significant change" that will add what they consider "substantial cost" to exploration/production company operations. Landowners on which the work is taking place called the new approach "a step in the right direction," but they would prefer "no pits."
Under the changes, oil operators will be prohibited for storing wastewater and other liquids produced by drilling in pits at the drilling site. They will be able to store dry cuttings from drilling, but will have to bury the material within 30 days of the well's completion.