Regulator: North Dakota oil drillers coming in below new threshold for natural gas flaring

Energy Associated Press

North Dakota's oil industry is coming in even lower than the targets set by new rules that require reducing the amount of natural gas burned off as a byproduct of oil production, the state's top energy regulator said Friday.

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Regulators endorsed a policy in July that sets goals to reduce flaring in incremental steps through 2020. The new rules allow regulators to set production limits on oil companies if the targets are not met.

The change requires flaring rates to be reduced to 26 percent by Oct. 1 and 10 percent within six years as infrastructure catches up with oil development.

State Mineral Resources Director Lynn Helms said North Dakota's natural gas flaring rate was 22 percent for October.

"I couldn't be happier," Helms said. "Overall, it was really good compliance."

Sixty of the 68 companies drilling the in the state were flaring below the new threshold, while four of the companies that far exceeded the new standards may face production limits, he said.

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The percentage of flared natural gas in North Dakota has been about one-third of production in recent years, though the overall volume has dramatically increased. Less than 1 percent of natural gas is flared from oil fields nationwide, and less than 3 percent worldwide, the U.S. Energy Department said.

Wayde Schafer, a North Dakota spokesman for the Sierra Club, said the reduction in flaring was welcome, "but it's premature to be patting ourselves on the back. It's still more than 20 times the national average."

Ron Ness, president of the North Dakota Petroleum Council, said the flaring percentage will drop dramatically, once all easements are obtained from landowners for major gas pipeline projects that are proposed.

Ness has said the industry has already invested more than $6 billion in infrastructure to capture natural gas in the past six years and plans to spend at least an additional $1.7 billion over the next two years building gas pipelines and other infrastructure.

Natural gas production in North Dakota set a record in October, at more than 1.42 million cubic feet daily. That's up from 1.41 million cubic feet daily in September.

Helms said oil drillers produced 1.18 million barrels of oil a day in October, down about 4,050 barrels daily from September. October figures were the latest available because oil production numbers typically lag at least two months.

October's production was the first time in eight months that the state did not set a monthly oil production record, Helms said.