A North Dakota exploration and production (E&P) task force on Wednesday outlined plans to slash the amounts of associated, or flared, natural gas over the next six years to as little as 10% from the current levels of more than 30%.
The North Dakota Petroleum Council (NDPC) flaring task force unveiled the plans unveiled the plans to the state Industrial Commission, saying it would take a broad stakeholder effort to meet the challenging goals.
E&Ps could capture up to 95% of associated gas with "full engagement" from the commission, state agencies, the legislature, and stakeholders, the task force report said. The Industrial Commission oversees E&P activity through the Department of Mineral Resources (DMR). Earlier this month the DMR said flaring was inching toward the all-time high level of 36% experienced in September 2011 (see Shale Daily, Jan. 15).
A DMR spokesperson told NGI’s Shale Daily that her department’s officials at the industrial commission presentation were “impressed to see the amount of detail that went into the task force report.” She added that there is still “a lot of work ahead for all stakeholders, but this is a great step in reducing flaring.”
A Bakken landowners' group, the Northwest Landowners Association, agreed the task force proposal is a start, but it urged the industrial commission to go further in ensuring that companies build infrastructure and "do a better job of holding operators accountable when they damage our land or needlessly waste gas through flaring. We hope that the leaders at the [commission] will cast a wide net in considering stronger efforts than proposed by the task force."
"Individual companies have come together to present a comprehensive plan that will help reduce flaring from current levels even as oil and gas production significantly increases," said NDPC President Ron Ness. Gas capturing goals can be set at 85% within two years, 90% in six years and up to 95% if all stakeholders are engaged. Those reduction levels would translate into a flaring level of 15% in two years; 10% in six years; and eventually 5%.
The task force recommended:
Producers and midstream gas processors and gatherers submit gas capture plans prior to filing for a drilling permit;
Regulatory consequences for failing to comply with requirements in approved drilling permits, or for existing wells;
Right-of-way access improvements in policies to accelerate planning, constructing and operating more pipeline/midstream infrastructure;
More incentives by the state, such as tax credits, for new technologies to build out pipelines and power transmission lines;
Hotline developed and maintained by the Industrial Commission to provide landowners with a notification system for problems and concerns with companies to assure quality control; and
Midstream companies meet monthly with the commission to provide operation status and updates.
The aggressive flaring-reduction targets would lead the industry to "increase transparency and accountability." Increased levels of captured gas are forecast to come primarily from a combination of "enhanced construction" of midstream services and by implementing operational recommendations from the task force.
Ness stressed that the industry is well aware of the importance of capturing the gas. The suggested approach by the task force would allow robust oil production to continue, "while capturing more gas for the benefit of mineral owners, value-added markets and the state as a whole."