North Dakota Governor Sees Oil Production Dip From Flaring Rule Change

Hess To Form MLP For North Dakota Oil, Gas Transport Assets
Some of North Dakota's oil companies likely will experience a production dip starting next month as they try to meet aggressive new flaring standards, Governor Jack Dalrymple says.

Reuters

WILLISTON, N.D., Sept 18 (Reuters) - Some of North Dakota's oil companies likely will experience a production dip starting next month as they try to meet aggressive new flaring standards, Governor Jack Dalrymple said on Thursday.

Flaring, the wasteful burning of natural gas that is extracted alongside crude, has become a widespread problem in the state, the nation's second-largest oil producer.

In an effort to curb the problem, which harms quality of life and reduces tax revenue, state regulators will require companies to flare no more than 26 percent of produced gas starting Oct. 1, with standards tightening in the future.

If producers fail to meet the standards, they will have to curb production.

"A lot of people were surprised we took that step because there are going to be some operators impacted by this," Dalrymple, a Republican, said in a speech to the North Dakota Association of Oil and Gas Producing Counties. "We are very committed to reducing the flaring of natural gas."

Dalrymple, the chair of the state's Industrial Commission, a three-person regulatory body with direct oil industry oversight, has been a vocal opponent of flaring.

In June, Dalrymple set an aggressive goal for the state's oil and gas pipeline capacity to nearly double within two years, enabling more gas to be collected from well sites so it is not flared.


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