A subsidiary of Exxon Mobil Corp. is asking state regulators to grant an exception to the amount of natural gas companies are permitted to burn off at 140 of its oil wells in Dunn and McKenzie counties.
The state's Oil and Gas Division heard the request from XTO Energy this week in which the company argues it has nowhere to take its gas. This is because OneOK, a gas-processing company, couldn't secure an easement agreement and build a 20-mile pipeline expansion. OneOK said the pipeline would have moved 40 million cubic feet per day to their Garden Creek gas plant in McKenzie County.
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The request will now be forwarded to the state Industrial Commission, which earlier this week more clearly defined gas-capture rules, imposing penalties for noncompliance and establishing flexibility to cover extenuating circumstances, reported the Bismarck Tribune (http://bit.ly/1xJ4IXf ).
As of January, XTO was flaring 38 percent of its gas and selling the rest to OneOK and other gas plants, according to company paperwork. Currently, companies have to capture at least 77 percent of all natural gas released as a byproduct of oil production. Regulators can set production limits on oil companies if the targets are not met.
The company reduced its oil and gas production in February and March to reach compliance, according to XTO, which says it is also deferring bringing new wells on line and deploying gas-capture units.
Jan Swenson, executive director of the Badlands Conservation Alliance, said her group opposes XTO exceptions for any of the wells drilled or permitted starting in 2014, when the company would have known the proposed pipeline expansion was in trouble.
XTO expects their current predicament to continue until late 2016 when a proposed Bear Creek gas-processing plant in Dunn County goes into service. The company is asking for the exceptions until then.
Information from: Bismarck Tribune, http://www.bismarcktribune.com