Efforts to reduce natural gas flaring have hit the federal level.
On Wednesday, Sens. John Hoeven (R-N.D.), John Barrasso (R-Wyo.) and Mike Enzi (R-Wyo.) introduced the Natural Gas Gathering Enhancement Act on the Senate floor to expedite permitting of gathering lines on federal and Indian lands.
According to the Energy Information Administration, North Dakota, Texas and Wyoming are among the highest states flaring and venting natural gas.
It is still flared at nearly 30 percent on private and state lands in North Dakota, with an estimated 40 percent on the Fort Berthold Reservation.
“Our legislation is a good example of how we can produce more energy with better environmental stewardship by empowering states and tribes to develop their energy resources,” Hoeven said.
Flaring has been a hot-button issue in the oil and gas industry dating back to early last year.
In April 2013, the state approved House Bill 1134 to provide tax exemptions for innovations and new gas-gathering systems to reduce in-state flares.
The bill cut the amount of time well gas can be flared from one year to six months before it needs to be capped, connected to a gas gathering line or use 75 percent of it to run an on-site generator and other beneficial on-site projects.
In terms of breaks, HB 1134 provided a temporary, gradual property tax exemption for systems through January 2017. The first year was a 100 percent break before being reduced to 75 percent in year two, 50 percent in year three and 25 percent in year four.
The speed at which wells are drilled in the Bakken has been a direct cause of flaring because pipelines have been unable to be placed at the same rate.
A Flaring Task Force put together by the North Dakota Petroleum Council to address the flaring problem in the state introduced a plan to the North Dakota Industrial Commission in October 2013.
A spokesman for Hoeven said the senator enlisted help from North Dakota tribal leaders, oil and gas companies and regulators.
“This bill would provide a simple, yet much needed to fix to help expedite the construction of natural gas gathering lines of federal lands, which will result in reduced flaring of natural gas,” said Tessa Sandstrom, spokesperson for the North Dakota Petroleum Council.
The first report of the task force said it would simply take time to resolve the flaring issue and at last count the industry has spent more than $6 billion with 10,000 miles of pipeline throughout the Bakken. Another $800 million is being planned for the Williston Basin to reduce gas flaring.
In November, Alliance Pipeline officially opened its new gas pipeline and ONEOK announced it was moving forward on plans to build its sixth natural gas facility in North Dakota.
“There is so much focus nationally on the oil production in the Bakken, but North Dakota is also experiencing an unprecedented increase in natural gas production, with our most recent report showing another record output,” said Sen. Heidi Heitkamp (D-N.D.) in January during a ONEOK visit. “We absolutely need to increase our capacity to gather and process natural gas, just like ONEOK is doing, so we aren’t wasting this valuable resource, but are instead using it in homes and businesses throughout North Dakota and the country.”
Under the Senate bill introduced by Hoeven on Wednesday, Secretaries of the Interior and Agriculture would be required to issue rights-of-way for natural gas lines that qualify for categorical exclusion within 30 days and rights-of-way for all other gathering lines servicing oil wells within 60 days.
It would also provide categorical exclusion under the National Environmental Policy Act for lines on federal land, excluding the National Park System, National Wildlife Refuge System and the National Wilderness Preservation System.
Exclusions would also be made for lines located on Indian land and ones that service any oil well, but not natural gas well. It was noted the bill would not affect laws requiring the consent of Indian tribes or individual Indians prior to the issuance of rights-of-way on Indian land.
“When the NDPC Flaring Task Force made its presentation, we said we would need all key stakeholders involved to help us reach our capture goals, and we applaud Senator Hoeven for his leadership on this issue at the federal level,” Sandstrom said. “The North Dakota Petroleum Council and its members are committed to reducing flaring, and we hope this legislation will pass.”
