American Oil and Gas Reporter - April 2015 - 16

IndustryDigest
New Mexico Revamps
Produced Water Rules
To Promote Recycling

SANTA FE, N.M.-The New Mexico
Oil Conservation Commission has
adopted a rule proposed by the New
Mexico Oil & Gas Association. OCC
says it will reduce the industry's
freshwater consumption by promoting
recycling and reusing produced water.
"This is a big deal," affirms
NMOGA Communications Director
Wally Drangmeister. "Operators were
able to undertake produced water
projects to minimize freshwater use, but
everything was done on a one-off
application to OCC. This rule
recognizes, on behalf of regulators and
the industry, a desire to codify this so
that the rules are predictable and make
sense."
Under Title 19, Chapter 15, part 34
of the New Mexico Administrative
Code, a recycling facility is defined as a
stationary or portable facility used
exclusively for treating, reusing or
recycling produced water. Recycling
containment is a storage container that
uses a synthetic liner as the primary and
secondary containment device, and is
used solely in conjunction with a
recycling facility to store, treat or
recycle produced water only for use in
drilling, completing or plugging oil or
gas wells.
Among the provisions of the new
rule, the OCC says:
* No permit or registration is
required from OCC for disposing
produced water from drilling,
completion, producing, secondary
recovery, pressure maintenance or well
plugging activities.
* Recycling facilities may be on or
off the drilling location and serve a
number of wells.
* Recycling containments may hold
produced fluids that include freshwater,
brackish water, recycled and treated
water, fluids added to water to facilitate
drilling or completion, water produced
with oil or gas, flowback from
operations, water generated by an oil or
gas processing facility, or other waters
gathered for drilling or completion.
They may not include any hazardous
wastes.
* Registered recycling
containments may be operated for five
years from registration, with annual
16 THE AMERICAN OIL & GAS REPORTER

extensions thereafter.
NMOGA and the Independent
Petroleum Association of New Mexico
testified before OCC in support of the
new rule. It became effective March 31.
"This rule will make water recycling
projects even more prevalent,"
Drangmeister predicts. "David Martin,
secretary of the New Mexico Energy,
Minerals and Resources Department,
was the primary driving force behind
getting the industry and regulators to
address this." r

North Dakota Provides
Relief From Flaring Rule

BISMARCK, N.D.-Reacting to
operator requests for relief from forced
production curtailments, North Dakota
regulators have issued revisions to the
state's associated gas flaring rules that
clarify circumstances when exemptions
will be granted.
The North Dakota Industrial
Commission reports revisions it adopted
in March exempt natural gas flared
from a producing well's total on the
date a force majeure event occurs,
provided the circumstances are
documented by the gas gathering or
processing company.
Lynn Helms, director at the
Department of Mineral Resources' Oil
& Gas Division, offers two examples of
unforeseen events that would result in
flared gas volumes not counting against
an operator's monthly capture
percentage. In one, Helms cited a power
surge at a gas processing plant that
caused a two-day shutdown. Another
example occurred when a gathering line
was stopped following heavy rain that
exposed the line on a hillside.
"This is a significant change for
operators," affirms Ron Ness, president
of the North Dakota Petroleum Council.
"Gas processors file their force majeure
reports monthly, and the operator now
may deduct that volume from his
monthly flared total without having to
request an individual exemption."
The NDIC holds forced production
curtailments as an incentive for
operators to meet the state's gas capture
goals, says Helms, pointing out that oil
production from a well that captures
less than the current goal of 77 percent
of gas produced but more than 60
percent is limited to 200 barrels a day.

Production is limited to 100 bbl/d for
wells capturing less than 60 percent.
"Our concern with curtailment
always has been unexpected delays or
an expansion of infrastructure,"
observes Ness. "These revisions are an
improvement."
Under the revisions to NDIC Order
24665, adopted March 24, an operator
seeking a temporary exemption must
show an inability to meet gas capture
targets because of:
* Third-party rights-of-way delays;
* Midstream downtime for
upgrades or maintenance;
* Restrictions or delays from
federal regulators;
* Safety concerns;
* Unanticipated delays in access to
electrical power; or
* Possible reservoir damage.
Requests for temporary exemptions
"may be considered for other types of
extenuating circumstances" if the result
is "a significant net increase in gas
capture within one year," according to
the revised guidance.
The revisions also add penalties for
failing to file a hearing request when
gas capture goals are not met and for
failure to comply with a production
curtailment notice.
According to Helms, operators who
fail to request a hearing can be fined
$1,000 in the first month, doubling
monthly to a maximum $12,500 fine.
Failure to comply with production
curtailment can result in a verbal notice
of violation the first month, followed by
a written NOV the second month and a
fine of up to $12,500 per well per day in
the third month. Ì

Kansas Well Operators
Are Ordered To Reduce
Their Injection Volumes

TOPEKA, KS.-Noting increased
seismic activity, the Kansas Corporation
Commission has ordered reductions in
injection volumes for wells operating in
two south-central Kansas counties.
The commission says Kansas
experienced 30 earthquakes from 1981
to 2010, but reported four in 2013, 127
in 2014 and 51 through March 16 of
this year, with the majority occurring in
Harper and Sumner counties.
The KCC asserts the increase
coincides with a jump in the number of
American Oil and Gas Reporter - April 2015

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