The goals proposed by an industry task force and adopted by the commission in March 2014 required the industry to boost the percentage of gas captured at wellheads statewide from 77 percent this year to 85 percent on January 1 and 90 percent by October 2020.
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Twenty percent of the gas produced was flared in July and the rate was 18 percent in June.
The industry sought an extension on the 15 percent benchmark until November. 1, 2017, due to problems with federal permits, land access permission for pipelines, and delays in the development of gas processing plants.
The commission originally ordered operators to reduce flaring to 15% by the first quarter of 2016 and to between 5% to 10% by the fourth quarter of 2020. He said industry needs to slow production if they don’t have the infrastructure in place to meet the goals. But on Thursday, the commission approved a plan to review flaring goals each December, every year, and to finalize a three-month rolling credits program which could allow certain operators to exceed limits without being in violation of the flaring reduction mandate.
Attorney General Wayne Stenehjem, who sits on the commission with Governor Jack Dalrymple and Agriculture Commissioner Doug Goehring said, “I’m interested in the end game – where do we wind up”.
Depressed crude oil prices are dealing heavy blows to North Dakota’s tax revenues, to the extent that it will likely need to update budget forecasts for future years.
Industry officials expressed skepticism about being able to meet that, but North Dakota Petroleum Council President Ron Ness said “we will do our best to get there”. About 20 percent is now burned off in North Dakota because the infrastructure isn’t there to move it to market.
“We are still committed to capturing 90 percent of gas by 2020”, he said.
“If Moody’s misses this bad, why would we want to go back to Moody’s?” asked Rep. Jeff Delzer, R-Underwood, chairman of the House Appropriations Committee.
Environmentalists and other activists lobbied the commission not to relax the flaring goals, saying the industry should have done a better job anticipating what it described as unforeseen circumstances such as higher gas production and difficulty obtaining right of way for pipelines.
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“It would be a reward system for people who are going above and beyond the goals”, Helms said.
