Attached to North Dakota's regulations to lower the amount of associated natural gas flared in its booming oilfields are specific annual targets to reduce the number of flaring wells, volumes and the percentages on a year-to-year basis.
The state introduced the regulations on Tuesday (see Shale Daily, July 2). Lynn Helms, who directs the Department of Mineral Resources (DMR), outlined the rules to reduce flared gas to 5% by the end of 2020 from 10% at the start of that year.
The most recent monthly statistics by DMR have placed flaring at 30%, and producers have a long way to go, but Helms expressed confidence that initial gas capture plans submitted for new drilling permits indicate the operators will get there, starting with a requirement by Oct. 1 to have the flared percentage down to 24%.
The timeline was developed by the North Dakota Petroleum Council's (NDPC) flaring task force and submitted to the state Industrial Commission (see Shale Daily, Jan. 30), which oversees DMR operations. "The task force met 20 times [last fall] and argued hard over what could be achieved and what was realistic," Helms said.
"The commission adopted the task force goals and those are enforced with the new order [approved Tuesday]." By Jan. 1 next year, the goal is 77% capture, going up to 85% the start of 2016 and by 2020 reaches 90%-95%, Helms said. The first production restrictions under the new rules, if they need to be imposed on some producers, would take effect Jan. 1.
Helms said it may be more difficult for operators to meet the capture goals on the Fort Berthold reservation lands on which a third of the state's oil production takes place because the flaring percentages are much higher (40%), compared to the rest of the state's production (20%)
"The Fort Berthold flaring numbers have been much higher than the rest of the state -- off the reservation its been averaging 20%; on the reservation it is 40%. That is going to be challenging. Whether a well is connected or not -- in the Fort Berthold Reservation, or somewhere else -- it could be subject to production restrictions as a result of flaring."
If there is "significant resistance" to correcting a violation, then restrictions and/or fines would be enforced. "Production restrictions have a twofold purpose: reduce the volumes of gas flared and also provide a strong financial incentive to contract with a gas gatherer," Helms said. "The fines will come if a company ignores the production restrictions."