American Oil and Gas Reporter - February 2019 - 21

IndustryDigest
"once between Oct. 1 and Dec. 31 and
once between Jan. 1 and March 31, and at
least 30 days apart, although additional
VPCR4 testing may be required if
deemed necessary by the commission."
Local press reports cite data from the
North Dakota Department of Mineral
Resources indicating that only 60 out of
60,000 vapor pressure tests have failed
to meet the 13.7 psi standards since the
requirement was adopted in 2015, and
most of those occurred during the
winter months.
Importantly, points out North Dakota
Petroleum Council Vice President Kari
Cutting, the new guidance exempts
from testing companies that deliver
crude oil to a transporter under tariffs
that mandate a maximum vapor
pressure of 13.7, provided they file
supporting documentation.
The new guidance also:
· Allows the Oil & Gas Division to
inspect production facilities periodically
to confirm compliance;
· Prohibits blending crude oil with
natural gas liquids; and

· Requests transload rail facilities
to notify NDIC of any violation of
federal standards.
"Overall, we are very pleased," Cutting
says of the new vapor pressure guidance.
She recalls that during the rulemaking process, NDPC had argued that
vapor pressure testing should align with
the location where the crude oil is
physically delivered to rail transport.
The new guidance document requires
that VPCR4 tests be performed "in
accordance with the latest version of
ASTM D6377 . . . at the point of
custody transfer," and also calls for
"public hearings to consider alternative
oil conditioning methods."
Cutting says NDPC interprets that
language and the fact the changes were
issued as a policy/guidance document
rather than as an order as an indication
the NDIC wants to give the Oil & Gas
Division director more discretion.
"The commission's authority is
somewhat limited by chain of custody,"
she comments. "So, rather than writing
something more specific, our

interpretation is the NDIC likely will
allow some latitude to companies that
maintain their chain of custody closer to
a rail facility, but (the commissioners)
want to talk about the specifics and
know they are on the production side of
that chain of custody before they agree.
That is OK with us."
Also significant, Cutting mentions, is
that the new guidance specifies
separators and/or heater-treaters heat
produced fluids to no less than 110
degrees Fahrenheit from Oct. 1 through
March 31, but make no such requirement
for the other six months of the year.
"When you (heat to a minimum of
110 degrees) in the summertime, you
have a tendency to overheat the material
and force some of the crude oil into the
gas state," she explains. "By making the
policy guidance applicable only from
Oct. 1 through March 31, NDIC allows
companies to optimize their gas
separation equipment, rather than running
at the same set of conditions the other six
months, as long as they still achieve a
vapor pressure less than 13.7." r

FEBRUARY 2019 21
http://www.latshawdrilling.com
American Oil and Gas Reporter - February 2019

Table of Contents for the Digital Edition of American Oil and Gas Reporter - February 2019
