ND considers new oil, gas rules, Regulations aim to reduce spills
BISMARCK – North Dakota is considering new oil and gas rules aimed at regulating pipelines and reducing spills, but the proposals would cost the industry money to implement at a time when margins are slim.
The North Dakota Industrial Commission approved the framework for proposed rule changes Tuesday and will soon accept comment from the public, including a series of hearings planned for western North Dakota.
Some rule changes -- including a set of new regulations for gathering pipelines -- were prompted by legislative action after high-profile pipeline spills.
Other changes include requirements for dikes around well sites and new rules for saltwater handling facilities.
The specific wording of the rules, which amend 20 sections of oil and gas regulations, are expected to be released by the end of the week, said Director of Mineral Resources Lynn Helms.
Helms said he expects to receive a lot of comments on a proposal to require all well sites and oilfield facilities to have 1-foot perimeter dikes to minimize the impact from spills.
Recently, about 75 percent of oil-related spills were contained on the well pad or location, but that statistic has slipped to below 70 percent, Helms said.
With the new diking requirement, more spills that result from trucks that overflow, vandalism or other incidents would stay within the dike and have less impact on the environment, he said. Some companies voluntarily build such dikes, but Helms said a majority do not.
“We don’t think it’s a large cost per facility, but there are thousands of those pads out there,” Helms said. “So the overall total cost will be significant.”
The largest set of rule changes applies to gathering pipelines, which have operated with little oversight in North Dakota. The rules include new bonding requirements, guidelines for installing pipelines and requirements for third-party inspections.
“The focus is on installation,” said Kevin Connors, pipeline program supervisor. “Through proper installation it’s the best form of spill prevention.”
The proposal also includes a more robust set of rules for saltwater handling facilities, prompted by a recent trend of hedge funds and other companies purchasing these facilities from operators, Helms said.
Regulators propose to expand the rules on the saltwater handling facilities “so these folks who are not oil and gas operators have a very significant system of rules to regulate their activities,” Helms said.
The Industrial Commission will accept public comment before acting on the rules. Public hearings will be held in Bismarck, Minot, Dickinson and Williston, likely in mid-April. The earliest the new rules could take effect is Oct. 1, Helms said.
“It’s very extensive and I think you’re going to get a lot of comments,” said Gov. Jack Dalrymple, who leads the three-member commission.
North Dakota Petroleum Council President Ron Ness said the industry group had not seen the rules, but planned to review them and add input. Ness said the industry has responded to more than 100 North Dakota rule changes in recent years.
“This group certainly likes rules,” Ness said. “It seems like this is a full-time job.”
Helms acknowledged that North Dakota has made more rule changes in recent years.
“But that’s because of the size and scope and speed of the Bakken oilfield,” Helms said.
The rules will be published on the department’s website, www.dmr.nd.gov/oilgas, after they’re released by Legislative Council.
Also Tuesday, the Industrial Commission agreed to ease the rules for wells with marginal oil production while oil prices remain extremely low. Low-producing wells would be allowed to remain on inactive status for up to one year under the action taken Tuesday. The state has 1,183 inactive wells, about 370 more than normal, Helms said.
“It’s a waste to have those wells plugged or to force those wells to be put back on production at these low prices,” Helms said.