North Dakota Considers Slowing Down Oil Boom

North Dakota is considering measures to slow down the oil rush in the Bakken to cut down on the state’s higher-than-average rate of flaring natural gas, which many people feel has gotten out of control.

The Associated Press reported that on April 22, the North Dakota Industrial Commission, which oversees oil and gas production in the state, took testimony from supporters and detractors of a proposed slowdown in oil production.

At the hearing, landowners decried the negative consequences of gas flaring, citing a threat to public health and lost revenue from burning natural gas instead of capturing it.

Industry officials pushed back, arguing that the companies are already taking voluntary steps to capture more natural gas than can be sold. Currently, oil and gas companies operating in North Dakota flare 36 percent of natural gas that is extracted, for lack of pipeline and processing infrastructure to capture it. That compares to a nationwide average of only 1 percent, and a worldwide average of only 3 percent, according to the Energy Information Agency (EIA).

But oil and gas industry representatives warned that less flaring would hurt business, and therefore, the state.

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“If production curtailment is the chosen regulatory path, then wells will be shut in or not even drilled. Revenues will be reduced, taxes will not be generated and those jobs will be lost. And the gas will not be captured and used productively,” said Roger Kelley, director of regulatory affairs for Oklahoma City-based Continental Resources Inc., a prominent driller in the Bakken.

This isn’t the first time North Dakota has felt pressure to rein in its exploding oil and gas industry. Back in January, Robert Harms, the chairman of North Dakota’s Republican Party called for a more “moderated approach.” On April 22, one of the state’s two U.S. senators, John Hoeven (R), although stopping short of calling for slower production, said reducing flaring would help the economy and also improve energy security.

The North Dakota Industrial Commission is comprised of three officials: Republican Gov. Jack Dalrymple, state Attorney General Wayne Stenehjem, and state Agriculture Commissioner Doug Goehring.

By James Burgess of Oilprice.com