Close, but no milestone: N.D. oil production up, but not 1 million barrels yet
By Amy Dalrymple
“We are back to setting records, just barely,” Department of Mineral Resources Director Lynn Helms said Tuesday.
The preliminary oil production figure for March is a 2.6 percent increase over February’s production.
Winter weather continued to affect oil production in March, with a few days where temperatures were well below zero, several days with winds too high for some crews to operate and a snowstorm on the final day of the month, he said.
Helms predicts North Dakota oil production will “squeak by” the 1 million barrel per day milestone when April production figures are released next month.
Natural gas flaring fell from 36 percent to 33 percent in March, largely because the expanded Hess Corp. gas plant in Tioga came online at the end of the month, Helms said. About 50 wells continued to be shut down in March to minimize flaring as the gas plant transitioned to an expanded plant.
Helms said he expects the rate of flaring will drop to 25 percent or below next month when figures reflect the gas being processed by the expanded plant.
To further reduce flaring, companies will be required starting June 1 to submit gas capture plans with their drilling permit applications. Helms said companies recently received letters with guidelines on what those gas capture plans should look like.
“I think it’s fair to say they’re extremely nervous about what this is going to mean,” he said.
In some cases, the new requirements could delay or restrict permitting or restrict production, Helms said. The North Dakota Industrial Commission took public comment in April and is still working to develop the final piece of its plan to reduce flaring, Helms said.
“There are companies that are going to be in really good shape in terms of the 76 percent capture goal by year end and there are other companies that aren’t,” Helms said.
A new policy on drilling near North Dakota’s “extraordinary places” took effect May 1, but the department has not yet seen a permit application within those areas, Helms said.
“I’m guessing that they are working to plan around it,” he said.
The new policy would lengthen the permitting process to allow for a comment period.
Rail transportation of crude oil fell slightly from 67 percent to 66 percent, driven by market conditions that prompted more barrels to be shipped by pipeline, said Justin Kringstad, director of the North Dakota Pipeline Authority.
About 700,000 to 715,000 barrels per day of crude oil were transported out of the Williston Basin in March, Kringstad said.