A bill sponsored by nine Republican lawmakers could potentially void North Dakota’s efforts to curb natural gas flaring and the conditioning of Bakken’s sweet crude, according to a report by The Dickinson Press.
Lead sponsor of the bill Rep. Keith Kempenich said that one of the bills is in response to the flaring goals and oil conditioning standards being approved by the Industrial Commission without going through the Legislature’s Administrative Rules Committee. The Dickinson Press reports that Kempenich said, “We need to be involved when they get into that broad of public policy. The Legislature was pretty much left out of the loop as far as what those policies were.” He added that the rules committee would have likely rejected the order to reduce flaring because the goals are “arbitrary.”
That order, adopted July 1, requires oil and gas producers in the Bakken and Three Forks shale formations to capture 77 percent of the gas being released by January 1, 85 percent by January 2016 and 90 percent by October 2020. If operators are unable to meet these goals they would be forced to cut back on production.
These goals, recommended by an industry task force, have already caused some producers to delay well completions. Spokeswoman for the Department of Mineral Resources Alison Ritter said operators will be hard pressed to meet the 2016 reduction goals, but officials have discussed pushing the goals back. The commission allows this flexibility because it isn’t a steadfast rule.
The order for the new oil conditioning standards, aimed to make Bakken crude safer for transport, are scheduled to go into effect April 1. The proposed bill, however, specifies that general orders that weren’t subject to the administrative rules process and were put into place after June 30, 2014 would be void, but not until the law takes effect January 1, 2016.
The orders for both flaring reduction and oil conditioning would be affected by the new law. Since the new law wouldn’t go into effect for another year, the commission would have time to submit the orders to the rules process. The approval process generally takes up to 10 months and requires public notices, comments, hearings and various reviews. Jeff Zent, spokesman for Gov. Jack Dalrymple, said, “What problem is it that needs to be solved? We think the current Industrial Commission is doing a good job, including its work to reduce flaring and to ensure that Bakken oil has limited volatility.”
Another bill that was filed this week aims to expand the state Industrial Commission from three to five members. The new additions would include the Public Service Commission chairperson and the state tax commissioner to the panel. The commission is currently made up of the governor, attorney general and agricultural commissioner. Additionally, Sen. Bill Bowman introduced a resolution calling for an interim study of the Industrial Commission and its membership’s relationships with the oil and gas industry. A recently submitted resolution notes that other states have regulatory boards comprised of industry experts.