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BLM proposes flaring rule that could have big impact state revenues, royalty owners

A new rule will be presented by the Bureau of Land Management Thursday in Dickinson that could have a big impact on state tax revenues and royalty owner income. The proposed rule, which is aimed at curbing emissions and flaring, would seek to limit flaring from wells with mineral leases, but industry representatives warn the rule is duplicative to existing state regulations and could cost North Dakota taxpayers and royalty owners a total of $62.9 million in lost revenues and income if it is implemented.

“The industry supports the goals of capturing greater quantities of associated gas and reducing waste but this one-size-fits-all federal process could come at a cost to North Dakotans and infringes upon the states’ rights,” said Tessa Sandstrom, spokesman for the North Dakota Petroleum Council.

According to the North Dakota Department of Mineral Resources, about one-third of North Dakota’s spacing units would be impacted by the proposed rule. These units would also contain leases held by private mineral owners. The limits could make it difficult for industry to produce new wells, the Director for the Agency told KX News in a recent interview.

“So about 1/3rd of our spacing units would get all of our attention so all of the investment, all the capital, all the pipelines and compression and gas plants would have to be focused on getting pipes to those federal leases at the expense of gathering gas from our private and state leases.” says Helms.

Helms says that companies would have to slow down production to meet the proposed rule. Early industry estimates anticipate that production could decline by more than 20 percent on impacted wells, reducing production by as much as 8 million barrels per year.

“North Dakota has been a major player in reducing our nation’s dependence on foreign energy, but with other assets in other states affected by this rule, this could shift our reliance back on foreign oil, ending the strides we’ve made toward national energy security,” said Sandstrom.

The meeting will be held at the Astoria Hotel and Event Center in Dickinson, North Dakota, at 1:00 p.m. MST. Individuals wishing to speak during the general public meetings arrive early to sign in. Sign-in will begin at 12 p.m. MST and end at 1:00 p.m. MST, when the general public meetings begin.

We need to show support for the industry. Opponents of oil and gas are sure to attend in support of the rules, so it is vital that our industry makes a strong showing as well.

At a similar meeting in Farmington, New Mexico, more than 800 people voiced their concerns. In the current price environment, the BLM’s increased regulation would further strangle the industry and threaten jobs.

Please send this out to employees and friends of the industry and plan to attend the meeting this Thursday.

When: March 3, 2016, 1:00 p.m.

Where: 363 15th Street W., Dickinson, ND 58601

RSVP: Please RSVP here ASAP and specify that you are attending the Dickinson meeting.

Call-In: To access an audio portion of the presentation, please call: 1-888-469-3312 and enter the passcode 2011952#. Participants will be asked to state their names prior to joining the meeting.

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