North Dakota set to extend deadline for gas flaring rules

By Ernest Scheyder
BISMARCK, N.D., Sept 24 (Reuters) - North Dakota is poised
to give the energy industry up to two extra years to curb the
amount of natural gas burned off at oil wells, a move that would
ease worries pipeline construction delays make it impossible to
meet aggressive flaring standards.
Governor Jack Dalrymple and the two other members of the
North Dakota Industrial Commission (NDIC), who spent months last
year finalizing the rules, will mull oil companies' request for
the extension at their Thursday meeting.
"These were lofty goals, but things have changed a bit and
we've got to take that into consideration," Doug Goehring, an
NDIC member and the state's agriculture commissioner, said in an
interview. "We're probably going to have to extend the
deadline."
Goehring, who said low commodity prices will influence his
vote, has an outsized influence over oil regulation due to his
seat on the NDIC.
Environmentalists oppose any extension and note the volume
of gas flared in the state continues to rise as more oil wells
are drilled, despite the best intentions of existing
regulations.
"We're just hoping the Industrial Commission will stand
firm," said Wayde Schafer, a spokesman for the Sierra Club's
North Dakota chapter.
The NDIC in June 2014 imposed four increasingly tighter
tranches for how much gas can be burned off.
The state's oil companies flared 20 percent of the natural
gas they produced in July, the latest month for which data are
available. That went beyond current standards to flare no more
than 23 percent.
The standards tighten to 15 percent in January, a goal the
industry says is untenable.
"Just like any road construction project, we've had
unanticipated delays that are frankly no fault of the
producers," said Ron Ness, president of the North Dakota
Petroleum Council, an industry trade group.
Ness said a Byzantine web of federal oversight impedes
construction of pipelines necessary to connect wells with
processing facilities. Oil can be stored in tanks indefinitely,
but natural gas must be piped away after
extraction.
Oneok's OKE.N decision to cancel its Lost Creek pipeline
and delays in federal approval for Hess Corp (NYSE:HES)'s HES.N Hawkeye
pipeline dashed hopes the January standards could be met, Ness
said.
Oil producers want two extra years to comply with the rules.
Lynn Helms, who advises the NDIC as head of the state's
Department of Mineral Resources, recommends a 10-month
extension. Goehring, the NDIC commissioner, said he does not
have a preferred timeline.