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North Dakota oil industry says new regs exceed legislative intent

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The North Dakota Petroleum Council is saying that new regulations proposed by the State Industrial Commission exceed legislative intent.

In a letter from NDPC President Ron Ness to Bruce Hicks, Assistant Director of the Oil and Gas Division of the commission, Ness says proposed rule changes “go beyond what we believe was the intent of the Legislature.” The letter was presented to the commission during a public hearing for comments on the new rules held October 2nd.

The commission is proposing 41 rule changes (see here) in the wake legislation passed during the 2013 session of the state assembly earlier this year. Ness says many of those changes come with the concurrence of the oil industry, some even at the request of the industry, but others go too far.

The group’s comments on the new rules (see here) total 10 pages highlighting  33 areas they feel are too broad, unnecessary or duplicative.

One area of concern in particular seems to be an expanded definition of water treatment plant to include plants used to recycle water used in production.

“The unintended consequences of this definition will include onsite treatment and identify rigs as treating plants with the end result being discouraging the recycling of water during a clean out, a small process that serves to minimize waste and chemical use,” the group says by way of comment on the proposed rule. “In addition, Industry is concerned that DMR may not be staffed adequately to manage the  increased workload from this proposed definition change without adoption of our revisions.”

In closing out his letter to the commission, Ness warns against over regulation.

“The oil and gas industry is heavily regulated and we recognize the need to adapt regulations to address issues as they arise,” Ness wrote in the conclusion of his letter.. “However, we must keep in mind that today’s economics might not always exist and we must remain cognizant that not all facets of the industry are the same. Overregulation in a volatile national and global economy could lead to undesirable effects if we are not diligent in monitoring the ever-changing regulator and economic environment.”

Comments on the proposed rules are still being accepted by the commission. All comments must be submitted to DMR by 5 p.m. on Friday, October 11, 2013 and should be sent to the Oil & Gas Division, 1016 East Calgary Avenue, Bismarck, ND 58503.

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