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North Dakota Official: Flaring Curbs to Cut Production

State and national initiatives (see Shale Daily, March 13) to significantly cut flaring of associated gas in North Dakota's Bakken Shale fields will result in some short-term cutbacks in the state's record production growth, the state's chief oil/natural gas regulator said Thursday.

As the state and the oil/gas industry are gearing up for an all-out push against flaring (see Shale Daily, March 5), Lynn Helms, director of the Department of Mineral Resources (DMR), which oversees oil/gas operations, said "it is almost inevitable if you are going to reduce flaring on wells that are connected to gathering systems, you are going to curtail production to the amount that the gathering system can collect and transport."

Helms said that leads to reductions of both oil and gas production in the nation's second-biggest oil-producing state where until this winter producers were setting new all-time production records monthly for both oil and gas.

"I think there is going to have to be some short-term sacrifice in order to achieve reductions in flaring and to incentivize the buildout of more gathering pipeline systems without destroying the economics of drilling Bakken-Three Forks," Helms said. "It's going to be a fairly difficult balancing act, and that's what [the state Industrial Commission] is striving for."

In response to questions during a monthly webcast in which new, dampened monthly production statistics were released, Helms said the oil/gas producers understand the situation and for the most part are supportive of getting more control over flaring.

Helms was reacting to the recent spike in the percentage of flared gas in the most recent monthly statistics [for last December] released last month and the upcoming prospects for the Industrial Commission finalizing a new anti-flaring program, drawing on recommendations from a task force of North Dakota Petroleum Council members.

In addition to the state's efforts, the federal Bureau of Land Management (BLM) has proposed rules for hydraulic fracturing and separately a proposal for anti-flaring measures applicable to federal lands, which account for about 20% of the oil-producing Williston Basin acreage in the western half of North Dakota. Helms said 30% of the state's production comes from the Native American reservation lands at Fort Berthold.

"We ought to expect that the BLM rules will lead to a decrease of production on the reservation when the [federal] Department of Interior imposes its rules," he said.

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