Following North Dakota State’s implementation of new rules to reduce flaring, the North Dakota Oil and Gas Division is taking regulatory action on five oil and gas operators that are flaring more gas than the permitted amount, according to the Forum News Service (FNS).
Beginning this month, these companies are required to decrease production to 100 barrels per day on wells where flaring restrictions weren’t met. If the production restrictions aren’t met, companies could be subject to daily penalties. As reported by Lauren Donovan for FNS, spokeswoman for the Oil and Gas Division Alison Ritter said that since the flaring restriction order was put into effect, this is the highest number of companies ordered to restrict production. The flaring regulations, implemented January 1 of this year, require operators to capture 77 percent of produced gas.
Ritter explained that the restriction orders could potentially be in effect for a full month. The restrictions will either be continued or lifted after the affected companies submit production reports for the month. The companies which received production restriction orders include Emerald Oil, Oxy, QEP, Abraxas Petroleum and Enerplus. Emerald Oil was the only company to have production restricted for each month of the New Year.
Since the original orders were issued, though, production restrictions placed on wells operated by Enerplus, OXY and QEP have been lifted by the ND Oil and Gas Division. Restrictions were placed on the companies following an audit for the month of January which found that the 77 percent gas capture goal had not been met. An audit performed the following month, however, found that the companies’ state-wide gas capture percentage to be at or above the 77 percent goal.
In a statement, Enerplus Communications and Public Affairs Coordinator Jessie Koerner said, “Enerplus takes complying with all applicable regulations seriously. As such, we have worked to manage those wells that aren’t yet attached to pipelines, or have installed newer technologies such as natural gas liquid skids to reduce our flaring so that we may comply with the North Dakota Industrial Commission order.”
The Associated Press reached out to Emerald Oil Vice President for Finance and Investor Relations Mitch Ayer on the matter. He said the company hasn’t been able to meet the state’s new regulations at some of its well sites due to the rules going into effect before its new midstream systems went online. The systems help capture more natural gas. Ayer told the AP, “It was basically a timing issue between the two.” Ayer added that the new system will transport natural gas from McKenzie County to a plant outside of Watford City that came online late March.
Updated April 14, 2015.