Company seeks flaring exemptions: XTO Energy wants 140 wells excused from rule

BISMARCK - North Dakota’s new policy for exempting oil wells from gas-flaring rules will soon be put to the test as XTO Energy is requesting exceptions for 140 oil wells in Dunn and McKenzie counties.
According to the request, the company says it has nowhere to take the gas because OneOK, a gas-processing company, was unable to secure an easement agreement for one final tract and can’t build a 20-mile pipeline expansion. The easements are complicated by the need to cross the Fort Berthold Indian Reservation or U.S. Forest Service land, according to documents filed with the case.
The request was heard Thursday by the Oil and Gas Division and will be forwarded to the State Industrial Commission for action. Earlier this week, the three-man board more clearly defined gas-capture rules, imposing penalties for noncompliance and establishing flexibility to cover extenuating circumstances.
The pipeline would have moved 40
million cubic feet per day to the company’s Garden Creek gas plant in McKenzie County, according to OneOK.
The gas company expects the situation to continue until late 2016 when a proposed Bear Creek gas-processing plant in Dunn County goes into service. XTO wants the exception until then.
Jan Swenson, executive director of the Badlands Conservation Alliance, said her group opposes XTO exceptions for any of the wells drilled or permitted starting in 2014, when the company would have known the proposed pipeline expansion was in trouble.
“This opens the door pretty wide,” Swenson said.
As of January, XTO was flaring 38 percent of its gas and selling the rest to OneOK and other gas plants, according to company paperwork. That’s 15 percent more gas flared than permitted by the state.
The company reduced oil and gas production in February and March to reach compliance, according to XTO, which maintains it is also deferring bringing new wells on line and deploying gas-capture units.
Oil and Gas Division spokeswoman Alison Ritter said Lynn Helms, director of the department, is empowered to sign such exception orders.
“But after putting the policy in place, the Industrial Commission said that, for the time being, it would like to see all the requests for exceptions,” Ritter said.
There are no current requests for flaring exceptions on April’s docket.