American Oil and Gas Reporter - January 2016 - 128

The Presidential Papers
excellence that have become the norm.
And at the same time, we will take the
steps necessary to build the relationships
and provide the technical and scientific
information that our local and national
communities need to feel comfortable
with our industry.

Here is the good news: We know the
energy our industry produces is essential
to the quality of life Americans enjoy,
and it will remain indispensable for
decades-and probably centuries. Societies
without access to reliable, affordable energy lead lives of constant struggle and

North Dakota
Petroleum Council
W. PERRY PEARCE
Manager, State Government Affairs,
Rocky Mountain Division
ConocoPhillips
Denver

FROM THE CHAIRMAN
It was a year of many challenges. Oil
prices remained the industry's trending
topic as mainstream news reports depicted
bust in the Bakken. According to many
reporters, the key indicator of that Bakken
bust was reflected in the fact that production dropped from 1.18 million barrels
a day in September 2014 to 1.16 MMbbl/d
in September 2015-a whopping 22,000
barrels. That, they say, is a bust.
Of course, the oil price slide and resultant activity slowdown should not be
trivialized. Many companies were forced
to lay off workers and make other difficult
decisions. For those who live and work
in North Dakota, however, the state of
the industry is anything but a bust.
In fact, like many shale plays across
the nation, the Bakken has proven resilient.
Although there are far fewer rigs than
this time last year, production has remained
virtually level. Communities that once
struggled to keep pace with the rapid
growth of the first several years of Bakken
development have gained an opportunity
to invest in infrastructure and other projects. They know the industry is not only
here to stay, but that development can
and likely will resume after the market
correction.
2015 Legislative Assembly
This infrastructure build-out resulted
from the hard work during the North
Dakota legislative session of many community and industry leaders, who pushed

hard for the more than $1.1 billion appropriation for impacted counties and
cities. The legislature, which meets biennially, convened in January and consumed
the first four months of 2015. The North
Dakota Petroleum Council and its members were busy throughout these months,
during which they tracked 132 bills, attended more than 170 hearings and testified
85 times on relevant bills and issues.
Among these bills was a package that
provided landmark oil and gas tax reform
that reduced the overall tax rate to 10
percent in lieu of a formerly unpredictable
tax code. It was a tough battle, but ultimately, the final bill passed and thereby
improved state and local governments'
ability to plan for future needs and development.
The legislative session also made significant strides to address producers' ongoing easement challenges. The assembly
passed pipeline legislation that funded
research into technologies and processes
for land reclamation or remediation, especially at sites with produced water
spills. A new ombudsman program will
help landowners and industry resolve issues with easements and ensure we can
continue to be good neighbors and partners.
Finally, successful landmark legislation
will pave the way for greater efficiencies
and value-added projects. This includes
legislation that will allow drill cuttings
to be recycled and reused for road base

128 THE AMERICAN OIL & GAS REPORTER

misery. We are among the world's elite
few industries that can offer solutions
that result in more prosperous, safe, and
secure societies.
The world ought to fear a scenario in
which we are prevented from doing our
jobs.
❒
or other projects, which will reduce our
operations' waste and impacts.
Flaring Flexibility
Our legislative work did not end when
the session adjourned. Flaring has continued to be a top concern. We have made
great strides in the past few years to
capture more natural gas, and total flaring
dropped more than 50 percent in 2015.
This has transpired even as we have seen
natural gas production increase, as low
oil prices force companies into our most
productive core fields.
Since January 2014, the industry has
invested more than $3 billion in oil and
gas infrastructure, including more than
1,250 miles of pipeline, 450 million cubic
feet a day of new and expanded gas
plants, and 75,000 bbl/d of natural gas
liquids pipeline capacity.
Another $1.6 billion in infrastructure
is expected within the next 18 months,
including 415 MMcf/d of new gas plant
capacity.
Despite this great progress, our industry still faces considerable challenges
in reaching the state's aggressive gas
capture goals. As the deadline loomed,
NDPC worked hard to inform decision
makers that many producers faced difficult situations. This prompted the state
to increase flexibility, and the measures
include extending deadlines for future
gas capture goals and allowing gas capture credits for operators who exceed
capture targets.
Ongoing Support
In addition to our legislative work,
NDPC also was active in engaging and
developing relationships with community
leaders and residents. The award-winning
North Dakota Oil Can! program held
several successful events, including the
Bakken Rocks CookFest, which reached
more than 3,000 people in small communities, Pick Up the Patch, is a program
dedicated to litter collection, and the Oil
Can! Fishing Derby has raised more than

American Oil and Gas Reporter - January 2016

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