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North Dakota Stiffens Oil Pipe, Reporting Rules

North Dakota officials on Thursday approved more extensive proposed pipeline regulations and reporting requirements for the oil and natural gas industry, including provisions aimed at cutting the amount of wellhead gas flaring.

The North Dakota Petroleum Council generally welcomed the new rules, calling them comprehensive, but council President Ron Ness cautioned against over-regulation and red tape, noting that 47 new rules were proposed this year, bringing to 70 the number of rules for oil/gas operations created in the past two years.

The three-member North Dakota Industrial Commission (NDIC), composed of the state's three top elected officials -- the governor, attorney general and agriculture commissioner -- approved proposed changes that had been vetted through a public review process.

After review by the attorney general's office, the proposed rules will go to the state legislature's Administrative Rules Committee for approval. Once finalized, a Department of Mineral Resources (DMR) spokesperson said, the rules are expected to take effect April 1.

"Today's approval of rule changes shows the commission's continued commitment to oversight of the oil/gas industry," said Gov. Jack Dalrymple, NDIC chairman. "These changes include regulations on gathering lines that were not previously included in pipeline rules."

In the 51-page document, two paragraphs were added to a section on well and lease equipment stating that, "All newly constructed underground gathering pipelines must be devoid of leaks and constructed of materials resistant to the effects of transported fluids. All such pipelines installed in a trench must be installed in a manner that minimizes interference with agricultural, road, and utility construction, the introduction of secondary stresses, and the possibility of damage to the pipe."

The DMR, which oversees day-to-day oil and gas operations, in the 2009-2011 period made changes that DMR Director Lynn Helms called "the most significant" in the state's history. Thus, in regard to the latest changes, Helms said they go beyond the importance of the earlier rule changes.

It is clear in many places these new rules aim to reflect the modern drilling world. In organizations for which the reporting requirements apply, the new rules add such entities as those "engaged in the disposal of produced water, or engaged in treating plant operations."

Setbacks for flaring equipment have to be farther away from any structure than the drilling equipment as one of the new ways to encourage operators to find alternatives to flaring associated natural gas.

The state also is expanding the list of entities from which it can access well records to include oil/gas service companies and those involved in injection wells or treating plants.

"The legislature saw a need for greater pipeline enforcement due to the growth in pipelines to move all fluids in western North Dakota," said Attorney General Wayne Stenehjem. The proposed rules will require operators to submit more data to the NDIC to track construction and reclamation of pipelines, along with tracking pipeline locations for surface owners, he said.

Another change mandated earlier in the year by the legislature increased the amount of funds that need to be available to deal with abandoned wells and reclamation sites. "Thanks to the oil and gas tax revenues, there will now be more funding available for reclamation if no responsible party can be found to reclaim the land," said Agriculture Commissioner Doug Goehring.

The proposed rules and full notice for the changes can be found at www.dmr.nd.gov/oilgas.

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