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North Dakota, BLM to Cooperate on New Flaring Rules

With one-third of North Dakota’s growing oil and natural gas production coming from the Fort Berthold Reservation lands, state officials said Tuesday the U.S. Bureau of Land Management (BLM) has agreed informally that new anti-flaring rules would be enforced on the federally managed lands.

The three affiliated tribes -- Mandan, Hidatsa and Arikara (MHA) -- that comprise Fort Berthold have established rules similar to those set to take effect June 1. The state Industrial Commission will require gas capture plans for new drilling permits or requests for intensified drilling at existing wellsites, said Department of Mineral Resources (DMR) Director Lynn Helms, who oversees oil and gas activities.

Fort Berthold oil production has become a significant contributor in the nation's second-largest oil-producing state, and tribal leaders are touting the reservation's output as among the top 10 oil producing states in the nation (see Shale Daily, April 28).

In his March production report, the most recent, Helms said on Tuesday there were 24 drilling rigs operating on the reservation (nine on fee lands that involve the state oversight and 15 on trust lands managed by BLM), producing 300,770 b/d, the majority (187,315 b/d) coming from the fee lands.

Fort Berthold has 1,174 active wells: 748 on trust lands and 426 on fee lands, according to DMR's latest statistics. The state estimates that there are more than 2,000 additional potential wells to be drilled on the reservation where in March 156 wells were awaiting completion and 310 new drilling permits were approved, the vast majority on trust lands.

Helms said the state has a "gentleman's agreement" with BLM related to Fort Berthold and state oil and gas rules. "We agreed we will mutually enforce the stricter rules and requirements regarding flaring," said Helms.

"So far I don't expect there to be any big areas of conflict," he said. "The three affiliated tribes have adopted similar rules and regulations." He acknowledged "some disagreement" over how much regulatory authority the state has.

Whether in regard to reservation or other lands, operators are wary of the new requirements for capture plans that carry the possibility of production limits for noncompliance, Helms said in response to questions during a webinar Wednesday.

The additional requirements are expected to add several days to the existing permitting process, which now averages about 27 days, he said. In addition, there are "significant barriers" to the ability to continue the robust production growth on Fort Berthold.

"The BLM and other federal agencies have really improved in terms of the drilling permit approval, but in terms of other critical approvals -- rights of way and flaring -- they are way behind. In addition, flaring numbers on the reservation are about twice as big as they are off the reservation, so that is going to impact the state's overall numbers greatly."

He said the major barriers to production on Fort Berthold will come from the BLM's hydraulic fracturing rules and the "major burden" that they are going to place on already overstressed federal staff. Pending BLM flaring rules, on a longer-range timeline, also would add to those barriers.

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