Maze of federal oversight impedes North Dakota's anti-flaring push

Wed Oct 1, 2014 4:39pm EDT
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By Ernest Scheyder

TIOGA, N.D. Oct 1 (Reuters) - North Dakota's oil producers will struggle to comply with aggressive rules taking effect on Wednesday designed to curb the wasteful burning of natural gas, hindered by lengthy federal reviews of crucial pipelines.

The No. 2 U.S. oil state is pushing to resolve a problem commonly known as flaring, an environmental and economic squandering akin to burning cash.

Energy companies have been preparing since June for the deadline requiring them to capture 74 percent of natural gas extracted alongside crude oil from thousands of wells. The standards get tougher in January.

But the energy industry and state officials say they are bound to fall short of the goal through 2015, flaring gas in excess of targets and consequently having to trim oil production to comply with penalties built into the new standards..

The main reason, according to Reuters interviews and reviews of regulations, is simple: a Byzantine web of state and federal agencies who must sign off on new pipelines.

Too few pipelines and a lack of plant capacity to prepare gas for transport means North Dakota flares enough natural gas in one month to heat more than 160,000 homes for a year.

The pipelines are caught between state officials whose top energy policy goal is to cut flaring, and federal agencies, which weigh historical and ecological issues, including protection of habitats for rare plants and animals.

The federal holdups are "a major disappointment," said Lynn Helms, head of the North Dakota Department of Mineral Resources. "It will make it harder to meet that 74-percent goal."   Continued...