North Dakota continued on a record-setting pace for oil and natural gas production at the end of the first quarter, but state Department of Mineral Resources Director Lynn Helms also raised caution in his most recent monthly “Director’s Cut” report released Friday.

Helms urged oil/gas stakeholders to comment on both the draft federal Bureau of Land Management (BLM) and Environmental Protection Agency (EPA) rules related to hydraulic fracturing (fracking) on federal lands, and he said the state has “a significant number of concerns” regarding the proposed guidance on the use of diesel in fracking.

For the BLM and EPA fracking rules Helms said there is a “state’s rights issue” lurking because in both instances the states have already set rules. For the BLM draft rules, he also expressed concerns that a study of potential fracking impacts on groundwater is still incomplete and that a consultation with three affected Native American tribes has not taken place.

For EPA guidance on use of diesel fuel in fracking, the definition of diesel is “too broad,” there has been no attempt to identify dangerous concentrations of certain materials in various diesel concentrations, and the guidance is written for enhanced oil recovery wells,” showing “a serious lack of understanding of the horizontal drilling/hydraulic fracturing processes,” Helms said.

Helms reported new records for oil and gas production in March, and the fact that oil production now exceeds pipeline takeaway capacity, but said that rail and truck transportation is sufficient to make up the difference. Gas production in March was 19.2 Bcf (620 MMcf/d) compared with 17.4 Bcf (601 MMcf/d) in February; oil production hit 17.8 million bbl (575,490 b/d) compared with 16.1 million bbl (558,558 b/d) in February. Both were all-time records.

Rig counts have climbed steadily, moving from 202 in February to 209 in April, according to Helms.

Behind advances in fracking and the explosive growth it has unleased in the Bakken and Three Forks Shale formations, North Dakota — which had no drilling rigs operating in 1999 — recently passed Alaska to become the second biggest oil producer in the nation, according to statistics released by Bruce Hicks, assistant state mineral resources director (see Shale Daily, May 17).