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North Dakota Flaring Program Unprecedented, State Official Says

With mandated gas capture plans and better long-range communications with midstream processing/gathering system operators, North Dakota's full-court press to greatly cut the percentage of associated gas flared at the wellhead is taking on a new life.

The effort kicked off earlier this month is unprecedented among other states with robust oil and natural gas production, the state's top oilfield regulator said Tuesday in reporting the latest Bakken Shale production levels.

The gas capture plans now required on all new oil and gas drilling permits began June 1 (see Shale Daily, March 5) and 165 plans have been submitted so far, said,Director of the Department of Mineral Resources Lynn Helms. He called the plans a "sea change for the industry in terms of taking flaring seriously." So far, the plans appear to be "very consistent and complete," he said.

Added gas processing, gathering and new interconnectivity are all being pursued by midstream companies, according to Helms, who attended a meeting of gathering system companies on Tuesday before his webcast (see Shale Daily, June 2).

While expressing continued disappointment in the latest flaring percentage staying at 30% in April, Helms nevertheless said he expects declines to the low 20% levels in the months ahead. In mapping out aggressive flaring mitigation options, the North Dakota Petroleum Council's larger members have committed to capturing 76% of their associated gas by October, Helms said.

Flared volumes of gas were their lowest in six months in April, totaling 10.3 Bcf, Helms said in response to a question on his monthly production report webinar. This compared to 11.4 Bcf in March (see Shale Daily, May 27). "We're definitely making progress; it is difficult to measure, but we're doing it."

The largest operators, with six or more rigs, are leading the way on flaring, Helms said, adding that they are giving the gathering system operators 18 to 24 months advance notice on their future takeaway needs.

"We are inventing an entirely new system for changing the flaring paradigms," said Helms, who reported on a recent Bureau of Land Management debriefing meeting in which he learned that Wyoming, Colorado and Texas are using what he called "variations of what North Dakota used to have" for their flaring programs.

"We are inventing something absolutely brand new here."

In response to questions about the goal of getting flaring into the low 20% range, Helms said he anticipates that the totals for May and June, when they are known later in the summer, will point toward that level.

"We're definitely on target to exceed the 76% capture level by Oct. 1 that industry has promised us," Helms said. "So if we don't get there in the next couple of months, I am very confident from what we have seen in the gas capture plans and from the midstream companies that we're going to be there by the fourth quarter this year."

Helms also met with midstream companies on Tuesday to get their feedback about gas capture plans and how they are working with operators on those plans. He said it was "very encouraging" based on the data the companies presented. "They have data all the way out through 2016 from the operators."

"The operators are now thinking of gas capture 400 days before they ever submit their permits," Helms said. "We have really made that shift and the midstream companies feel like they are getting lots of really great [advanced] information. One midstream company has made plans to add compression, loop gathering lines in two or three places because they can see surges in gas production coming."

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