American Oil and Gas Reporter - August 2019 - 145

ConventionSection: North Dakota Petroleum Council
more. There have been three pipeline announcements."
According to company websites:
· ONEOK has received a North Dakota Public Service Commission permit to
build a pipeline from the company's processing plant in McKenzie County, N.D.
to Richland County, Mt. The system will
transport as much as 40,000 barrels a
day of natural gas liquids.
· MDU Resources Group Inc. says
its subsidiary, WBI Energy Inc., plans to
build 67 miles of pipeline to move gas
from core Bakken production areas in
western North Dakota to an interconnect
with Northern Border Pipeline. The North
Bakken Expansion Project will provide
200 million cubic feet a day of transportation capacity.
· Hiland Partner Holding LLC, a Kinder
Morgan company, is planning the Bakken
Missouri River Crossing Project to move
as much as 240 Mcf/d from Williams
County, N.D., to Mackenzie County.
Until those and other new pipelines
are available, Ness says producers will
struggle to meet flaring targets.
"With the ability to claim the variances
for rolling blackouts and various things
that the state has established, individual
companies are making it, but as an industry
we are not meeting the target," he admits.
"We have to see a substantial change,
and it is headed in the right direction for
now. But we have to keep the pressure
on and the investments coming to keep
building more infrastructure."
As an alternative to flaring, a pilot
program to study the effectiveness of
temporary underground gas storage is
under way. Ness says it's one of several
funded by the North Dakota Industrial
Commission through the University of
North Dakota's Energy & Environmental
Research Center. He points out that the
Broom Creek formation-a nonproducing
geological structure-appears to be the
most favorable gas storage location.
Lynn Helms, director of the North
Dakota Department of Mineral Resources,
is quoted in local press accounts as saying
he anticipates the projects will hold the
gas for two-five years, to allow the buildout of needed pipelines, processing plants
and other infrastructure. "The alternative
is more flaring or we really limit oil production growth, and we don't want to do
either one of those," Helms told the Industrial Commission. "If we innovate
here, we may have a way to allow oil
production growth and not flare gas."

Vapor Pressure
North Dakota modified its regulations
on vapor pressure limits for oil transportation at the end of 2018, and Ness
says producers are continuing to work
on meeting the new requirements. Following several Bakken oil-carrying train
derailments and explosions, the Industrial
Commission amended the regulations initially imposed in 2015.
Under the new rules, producers must
process the crude to remove the most
volatile gases to ensure its vapor pressure
is less than 13.7 psi. Instead of quarterly
reports, producers must conduct two coldweather pressure tests. Companies failing
to meet the new standard would revert to
the quarterly testing until four consecutive
tests meet the standards (AOGR, May
2018, pg. 23).
"Vapor pressure, in relation to gas
capture, probably is a bigger issue of
creating that additional stream into the
gas stream as you run it through your
heater treater and equipment at certain
thresholds. We think we have that pretty
much handled," Ness assures.
Most of the oil being transported out
of North Dakota continues to head south,
he says, mostly to Gulf Coast refineries.
A portion of North Dakota's crude is
sent west, but the state of Washington is
seeking to block oil imports by rail by
requiring all crude oil unloaded in the
state to meet a 9.0 psi vapor pressure
limitation (AOGR, May 2019, pg. 33).
"It appeared North Dakota planned
to litigate those (limitations on) oil shipments when that law went into effect in
July," Ness says. "We feel that is a violation of the Commerce Clause of the
U.S. Constitution."

According to media reports, North
Dakota's two U.S. senators, Republicans
John Hoeven and Kevin Cramer, have
joined Congressman Kelly Armstrong, RN.D., in protesting the Washington regulation to Transportation Secretary Elaine
Chao and Washington Governor Jay Inslee.
The three officials hold that the federal
government has primary authority over
crude oil shipped across state lines.
"Washington's law will limit our energy
industry's ability to access safe and reliable
transportation for this vital commodity,
impacting good-paying jobs in our state
and undermining our nation's energy security. At the same time, instead of getting
light, sweet Bakken crude, refineries in
the Pacific Northwest will have to rely
on foreign crude shipped by barge, which
is less environmentally sound," the three
wrote in a joint statement.
As industry productivity continues to
increase, Ness points out, two rigs running
today can accomplish what three rigs
used to do, so the downturn in the state's
rig count is not necessarily a harbinger
of falling production. As a plus, he notes
those productivity gains are helping to
alleviate the ongoing shortfall in workers
in North Dakota.
"Because of the ability to use these
pipelines and have some options available
for oil markets, North Dakota producers
have been getting good prices for Bakken
barrels," he assesses. "Oil has slid a little
bit, and some of our operators have struggled to attract capital, so a slightly higher
price would benefit us in a lot of ways.
And, the state always could use the revenues. I don't think anybody in North
Dakota would be too unhappy if we saw
another $10 in the price of oil."
r

North Dakota Safety Program
Provides Portable Certification
BISMARCK, N.D.-North Dakota's
oil-producing community is operating
under a new standardized contractor safety
orientation. The North Dakota Petroleum
Council says the ONE Basin-One Way!
program is the result of 18 months of
hard work and negotiations.
This safety program will be a tremendous benefit, not only to service providers
but to operators as well, predicts NDPC
President Ron Ness. It will provide field
workers with portable safety orientation

training certificates that they can take
with them from job to job.
"To date, 11 companies have pledged
to require their employees and service
contractors to have this orientation training," Ness described in July. "Traditionally,
each company had its own training. They
have come together though this program
and have created a uniform training class.
This process consolidates and creates a
uniform program that is transportable
with the employee, allowing him to work
AUGUST 2019 145

American Oil and Gas Reporter - August 2019

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