UPDATED: Company launches experiment to re-use oil drilling waste

BISMARCK – An oilfield service company says it can recycle Bakken drilling waste while protecting the environment, turning waste that would otherwise go to a landfill into material for roads or other uses.

Nuverra Environmental Solutions is one of three companies that will launch a pilot project approved by the North Dakota Department of Health to recycle solid drilling waste.

“We want to make sure that this program is good for the landowner, it’s good for the operator and good for the environment,” said CEO Mark Johnsrud, who announced the new initiative Monday from the state Capitol.

Every Bakken well produces an estimated 26 semi-truck loads of waste known as drill cuttings that need to be mixed with a stabilizing material such as fly ash and disposed of, the Department of Mineral Resources has said.

Nearly 2.5 million tons of oilfield waste went to special waste landfills in North Dakota last year, and that accounted for about 20 to 25 percent of the total drilling waste, said Scott Radig with the North Dakota Department of Health. A majority of drilling waste is buried in cuttings pits on drilling locations.

“If you go talk to a lot of farmers, they don’t want these pits on their land anymore,” Johnsrud said. “The possibility of having something bad happen is out there.”

Nuverra, which has invested more than three years and $30 million into this initiative, says its process called Terrafficient can recycle 100 percent of that waste, according to Johnsrud.

Companies in other states successfully recycle drilling waste, but the high salt content in Bakken drill cuttings has made it more challenging to develop a process that protects the environment.

“The biggest concern is really the salt that’s in the drilling waste and the potential for it to impact plants and groundwater,” said Radig, director of the Division of Waste Management.

The health department has approved Nuverra and two other companies to move forward with two-year projects to test the technology and develop regulations for recycling drilling waste. Three other proposals are still being reviewed, Radig said.

“Potentially, it could be a real benefit, both to counties that are looking for scarce materials to make roads, or as an alternative to piling up a bunch of waste in a landfill,” Radig said.

Nuverra is working with the Energy and Environmental Research Center at the University of North Dakota to test to the technology before trying it in the field in the Watford City area.

Nuverra proposes to reuse the drilling waste in three ways: mix it with gravel so the gravel will compact better and not wash off the roads; reuse it as a road base material; and use it within municipal landfills as daily cover material, Radig said.

The testing will include using the recycled material to construct a road within Nuverra’s own landfill facility near Arnegard, Radig said. A gravel road in central McKenzie County that is still being selected will be used to test mixing the recycled material with gravel, Radig said.

Additional applications, including deicing roads and use as bedding for pipeline construction, are also being studied but won’t be part of the pilot project, said John Harju, EERC associate director of research.

The experiments are not without critics.

Wayde Schafer with the Dacotah chapter of the Sierra Club testified at the Legislature against recycling drill cuttings for road material, which he argued does not meet the definition of a beneficial use. He also raised concerns about how well it will be monitored and the potential for environmental impacts.

“High levels of salt in oilfield waste is toxic for our land which is already experiencing impacts from brine spills, releases and accidents,” Schafer said.

Dennis Fewless, who recently retired from the health department as director of Division of Water Quality, will return to the department part-time to oversee the project. Fewless will work with the companies to set up testing procedures and verify the treatment will have no environmental impacts.

“It is an important project and we wanted somebody to be able to dedicate some time to it,” Radig said.

Symmetry Oilfield Solutions of Colorado and Renewable Resources LLC of Killdeer also are approved by the health department to do test projects. Those companies do not plan to work with the EERC, but they will be required to work with a certified lab, Radig said.

“Each company kind of has their own unique ideas and ways that they think that they can work with this material beneficially,” Radig said.

State leaders, including Gov. Jack Dalrymple, joined Johnsrud in making the announcement at the Capitol on Monday. Legislators approved a bill last session, House Bill 1390, which paved the way for the pilot projects.

Tons of oilfield waste disposed of in North Dakota*

2014: 2.5 million

2013: 1.8 million

2012: 1.1 million

2011: 0.5 million

Source: North Dakota Department of Health

Figures represent oilfield waste, primarily drilling waste, disposed of in special waste landfills permitted by the North Dakota Department of Health. It does not include drilling waste buried on drilling locations, which is how a majority of the waste gets disposed of. Figures for 2015 are expected to be lower due to the drop in drilling.

Dakota Access Pipeline gains survey access across ND

WILLISTON, N.D. – Most North Dakota landowners who were sued for survey access by Dakota Access Pipeline reached agreements with the company and had their cases dismissed this week.

One landowner did take the matter to court, but a judge ruled in the company’s favor.

Energy Transfer Partners proposes to build the 1,134-mile pipeline from Stanley to Patoka, Ill. to transport 450,000 barrels of Bakken crude a day.

Dakota Access LLC filed civil lawsuits against several landowners in Williams, McKenzie, Mountrail, Dunn and Morton counties to gain survey access.

Although most landowners granted the survey access, being served a court summons prompted some to join a landowner group that is working with attorneys to negotiate with the company.

“They’d been sued and they wanted to join up with a larger group for more negotiating leverage,” said Montana attorney Matt Kelly, who is representing 64 landowners with Bismarck attorney Derrick Braaten.

North Dakota Public Service Commissioners told the company at a hearing two weeks ago they wanted to see more voluntary participation from landowners on the route.

Dakota Access has obtained easements for nearly 60 percent of the tracts along the North Dakota route, a spokeswoman said this week.

Mountrail County landowner Charles Ramberg, who continues to negotiate on an easement, said it’s hard to do business with a company that hands out a court summons.

“This Dakota Access, they just come up here and they said ‘If you don’t like what we’re doing, we’ll take you to court.’ Nobody likes to be treated like that,” Ramberg said.

McKenzie County rancher Rick Lawlar, who has several pipelines on his land, said it was the first time a company sued him for survey access.

“It’s disturbing,” Lawlar said.

Landowner Douglas Bopp of rural New Salem was the only landowner who did not settle with the company on survey access and appeared in Morton County District Court. The proposed pipeline would cut diagonally through his farmsite.

“He feels that there’s other routes that they could take to avoid his land, and he knows that there’s other people including the state of North Dakota that may welcome this pipeline,” said his attorney, Bryan Giese.

South Central Judicial District Judge Cynthia Feland granted the company’s petition for survey access. The company is required to give Bopp prior notice and be held responsible for any damage to crops, Giese said.

The Public Service Commission has two more public hearings on the project, one on June 15 in Killdeer and one on June 26 in Williston. More information is available at www.psc.nd.gov.

State regulators say well sites are ready for flooding

WILLISTON, N.D. – Oil companies with wells near the confluence of the Missouri and Yellowstone rivers are ready for flooding that’s projected to occur this weekend, state regulators said Friday.

Companies with wells in the most flood-prone areas have either shut down wells or secured the sites to prevent spills or incidents, Department of Mineral Resources spokeswoman Alison Ritter said.

“They’ve taken the necessary steps they need to,” she said.

The National Weather Service predicts that the Missouri River at Williston will hit flood stage of 22 feet on Saturday and peak at 22.5 feet on Monday, said hydrologist Allen Schlag.

While severe flooding is not expected, the water levels could get high enough to cut off access roads to wells and make some sites more vulnerable to accidents, Schlag said. Nearly 80 wells are in an area threatened by flooding.

Zavanna, the company responsible for an oil spill in March 2014 when an ice jam caused flooding in the area, has shut in four wells per an order from the state, as well as voluntarily shut in additional wells in the area.

“I feel confident that we’ve taken the necessary steps to protect that area,” said David Hodges, senior vice president of operations.

Other companies also have voluntarily shut in wells in the most flood-prone areas, Ritter said. Oil and Gas Division inspectors said water was starting to affect some roads in an area near Trenton that also flooded in 2011, she said.

In last year’s flood, a Zavanna well site had an oil tank that was not secured and spilled a reported 1,386 gallons into the rivers.

The company paid $3.5 million to clean up that spill, which contaminated more than 1 mile of shoreline of the Big Oxbow Wildlife Management Area. The North Dakota Industrial Commission levied $41,500 in fines and fees for the spill, and the North Dakota Department of Health may issue additional fines.

A settlement agreement requires Zavanna to shut down four wells between March 1 and May 30 of each year. The company has chosen to take the additional steps of shutting down about a dozen wells in that area from January through June each year and removing all oil and chemicals from the sites in anticipation of flooding, Hodges said.

“I don’t ever want to go through what occurred there a year ago,” Hodges said.

Zavanna was getting ready to bring some of the wells back online when advised of the potential for flooding, he said. The company will monitor the river levels to decide when to resume operations at those sites.

The company’s wells in that area are older, less productive wells from the Madison formation, Hodges said.

The well with the tank that spilled, called the Pvt. Frazier well, has not produced oil since the incident and the company is evaluating whether to plug it, Hodges said.

Some oil wells ordered shut in until flood threat subsides

A flooded oil well near the confluence of the Missouri and Yellowstone rivers has a workover rig and other equipment on it on Friday, March 14, 2014, near Williston, N.D. It is one of four wells ordered shut in this year until a flood threat subsides. Tanner Overland, Overland Aerial Photography

A flooded oil well near the confluence of the Missouri and Yellowstone rivers has a workover rig and other equipment on it on Friday, March 14, 2014, near Williston, N.D. It is one of four wells ordered shut in this year until a flood threat subsides. Tanner Overland, Overland Aerial Photography

WILLISTON, N.D. – The company responsible for an oil spill last spring into the flooded Yellowstone and Missouri rivers has been ordered to shut in four wells until a flood threat subsides.

The Department of Mineral Resources Oil and Gas Division is keeping a close watch on oil activity near the confluence of the two rivers, where potential flooding could affect nearly 80 wells, spokeswoman Alison Ritter said Wednesday.

Zavanna, the company responsible for a spill after an ice jam caused wells to flood in March 2014, is no longer allowed to produce oil from four wells in that area each spring as a result of a settlement with the North Dakota Industrial Commission.

The agreement says the company must remove all oil, saltwater and other chemicals from the well sites, secure empty tanks with freshwater and shut in four wells from March 1 through May 30 of each year.

Regulators have told the company to keep those four wells closed until flooding potential subsides, Ritter said. The company is voluntarily shutting in other wells in the area, she added.

The Missouri River at Williston is projected to hit flood stage of 22 feet this weekend, a level that in the past has caused problems for oil and gas wells in the floodplain, said Allen Schlag, hydrologist with the National Weather Service.

In addition, the upper Yellowstone River has received rainfall in the past two weeks that exceeds the normal amount by four to six times, adding to modest runoff from snowmelt, Schlag said.

Schlag said he does not expect the flooding to be comparable to what the area experienced due to ice jams in March 2014, but the water levels warrant taking precautions at well sites.

Inspectors with the Oil and Gas Division are telling companies with wells in that area to take steps such as securing equipment on site and ensuring they have adequate dikes around the sites, Ritter said.

But in 2014, regulators issued similar advisories and some companies did not heed the warnings in time.

A Zavanna crew had mechanical issues trying to access sites by boat and workers got stranded, hindering the company’s preparation efforts.

A tank containing a reported 33 barrels, or 1,386 gallons, of oil at one Zavanna well site that was not secured floated and leaked oil into the floodwaters, according to the North Dakota Department of Health. At another well site, a drum of methanol was discovered missing and leaked a reported 6 gallons into river waters, health department documents show.

The spill contaminated more than 1 mile of shoreline of the Big Oxbow Wildlife Management Area. Crews removed more than 30 tons of oil-soaked vegetation and debris after more than a month of cleanup, Kent Luttschwager of the North Dakota Game and Fish Department said last year during a tour of the area.

Zavanna paid $3.5 million to clean up the spill, according to a document from the North Dakota Industrial Commission. The company removed and disposed of more than 3.5 million gallons of floodwater from the sites, the document shows.

The Industrial Commission issued a complaint against Zavanna for violations related to the flooded wells and proposed a penalty of $150,000.

A settlement reached with the company last month suspends 75 percent of the fine for two years and requires Zavanna to pay $37,500 in fines, plus $4,000 in administrative fees.

In addition, Zavanna was ordered to raise the dike on one flood-prone well to 7 feet and the other to 9 feet.

The settlement notes that Zavanna has shown commitment in following through with cleanup and implemented a contingency plan to prevent another incident. If the conditions are violated, the commission can impose the suspended $112,500 fine.

The North Dakota Department of Health issued a separate notice of violation to Zavanna for the incident. Health officials are working with the company and have not resolved the issue of a fine.

A phone message left with a Williston Zavanna employee was not returned Wednesday.

Regulators have not ordered any other companies to shut in wells, but some operators are doing so voluntarily, Ritter said.

“Everything is just precautionary to make sure that everybody’s taking care of what they need to in the event a flood does happen,” Ritter said.

The Missouri River at Williston is expected to hit 22.5 feet by early next week, the Weather Service said.

Although the Williston area received significant rainfall this week, it was not enough to affect the flood projections for the Missouri and Yellowstone, Schlag said.

McKenzie County breaks ground on new jail, law enforcement center

Attorney General Wayne Stenehjem, second from left, speaks Tuesday, June 2, 2015, in Watford City, N.D., during a ceremony to celebrate construction of a McKenzie County Combined Law Enforcement Center. Amy Dalrymple/Forum News Service

Attorney General Wayne Stenehjem, second from left, speaks Tuesday, June 2, 2015, in Watford City, N.D., during a ceremony to celebrate construction of a McKenzie County Combined Law Enforcement Center. Amy Dalrymple/Forum News Service

WATFORD CITY, N.D. – As dozens of law enforcement officers lined up here Tuesday to celebrate the groundbreaking of a new jail, it was hard to believe that about six years ago the community had just four deputies and four police officers.

McKenzie County leaders are building a new facility to house growing law enforcement resources – which will soon include 25 deputies and 19 sworn police officers – that have expanded in the state’s busiest oil county.

The McKenzie County Combined Law Enforcement Center will include a 129-bed jail, saving the county money and staff time from transporting inmates as far as Fargo and Grand Forks due to lack of space.

The county in the heart of the Bakken has seen a rapid increase in crime in recent years along with the population growth.

“A lot of good people do come seeking opportunities, but also along with that comes opportunists, people who take advantage of our citizens, people who are here to deal drugs, to engage in human trafficking and other kinds of criminal activity,” said Attorney General Wayne Stenehjem, one of the officials who attended the ceremony.

In addition to the sheriff’s office and police department, the new facility will house the North Dakota Highway Patrol, the Bureau of Criminal Investigation, the Northwest Narcotics Task Force and other agencies.

“Unifying law enforcement agencies together in one building shows the citizens of McKenzie County our commitment to ensuring a safe and secure county to raise your families in,” McKenzie County Sheriff Gary Schwartzenberger said.

McKenzie County’s current jail has 12 beds, but the county typically has 45 to 65 inmates in custody, Schwartzenberger said. The county spent $2.2 million last year to transport and house prisoners in other counties, he said.

The lack of jail space means that misdemeanor offenders or other non-violent offenders sometimes have to postpone when they serve their sentence, said Northwest Judicial District Judge Robin Schmidt.

“Some people can’t get into jail,” Schmidt said. “I always tell them when they leave to make an appointment because it’s a popular place.”

County officials toured other facilities and studied the needs and determined that 129 beds would be a good number to start with, and the property will allow expansion of up to 200 beds if necessary, Schwartzenberger said.

County officials plan to finance the $57 million facility with a low-interest loan from the Bank of North Dakota and repay the loan with oil tax revenue. The North Dakota Industrial Commission is expected to vote on the proposal this month.

Excavation work has begun at the site, which is southeast of town at the corner of 12th Street and 11th Avenue Southeast. Construction on the 93,000-square-foot facility is anticipated to be complete in spring of 2017.

State legislators recently approved funding for 16 law enforcement-related jobs in Stenehjem’s office, including two Bureau of Criminal Investigation agents to be stationed permanently in McKenzie County.

Watford City Police Chief Art Walgren said the BCI agents will be a big help for more complicated cases that affect multiple jurisdictions. For example, the city has recently seen an increase in financial crimes and referred 20 cases of stolen credit card information to the BCI, Walgren said.

The Highway Patrol, which had one trooper in McKenzie County a decade ago, now has six stationed in the county, said Col. Michael Gerhart. The new facility will give troopers a home base in Watford City and prevent them from having to drive to Williston to pick up equipment.

Lt. Gov. Drew Wrigley said the new facility is more than a response to the needs in northwest North Dakota.

“It’s also a symbol of the community’s ongoing commitment to public safety and quality of life,”  Wrigley said.

AG’s opinion says state has discretion on abandoned wells

BISMARCK – An attorney general’s opinion issued Tuesday says the North Dakota Industrial Commission has discretion when deciding whether to plug oil and gas wells that have been abandoned for more than a year.

Rep. Kenton Onstad, D-Parshall, requested the opinion about a year ago to find out what duties the Industrial Commission has to plug wells that have been abandoned  – a source of frustration for landowners in his area.

“As long as that well is abandoned and sitting there not reclaimed, that surface owner is losing money,” Onstad said Tuesday. “The longer you let it sit, the more chances you have for problems on that particular site, a leaky tank or an old pipeline or something like that.”

Onstad writes in his request for an opinion that ambiguities in the law and the commission’s inconsistent enforcement “leave landowners in limbo with no foreseeable end.”

Attorney General Wayne Stenehjem, also a member of the Industrial Commission, writes that the commission may enter into contracts to plug abandoned wells under certain situations, but it has discretion about when to do so.

Once a well has failed to produce oil and gas in paying quantities for one year, it can be classified as abandoned.

State rules require abandoned wells to either be returned to production or plugged and reclaimed within six months. However, that may be waived for one year if the commission allows the well to be placed on “temporary abandoned status.”

Companies that request temporary abandoned status typically have plans to return and do something else with the well, such as convert it to an injection well or use it for enhanced oil recovery, said Department of Mineral Resources spokeswoman Alison Ritter.

The director of the Oil and Gas Division can extend the temporary abandoned status on a year-by-year basis.

North Dakota has 343 wells considered to be temporarily abandoned. Of those, 215 wells have been temporarily abandoned for seven or more years, Ritter said.

Rep. Marvin Nelson, D-Rolla, who sponsored legislation this past session related to these wells, said landowners contacted him about abuses of the system, including one temporarily abandoned well site that was used as a storage area.

“There are examples of wells that are on temporary abandoned status that have been on that status for decades,” Nelson said. “Is it really a legitimate temporary abandonment, or does the owner just not want to go through the expense and hassle of properly capping it or what?”

Under state rules, if a well is abandoned for one year or more, the bond posted for the well and equipment at the site are subject to forfeiture by the Industrial Commission. The commission can enter into contracts to reclaim the abandoned well in situations such as when the drilling company has no assets.

In his request for an opinion, Onstad asked if the Industrial Commission has a duty to act when a well is abandoned for more than one year and whether the commission must act in a certain timeframe. Onstad also asks what recourse landowners have if the commission does not act.

Stenehjem responds that the commission “has discretion in deciding when and to what extent it exercises its authority to plug an abandoned well and reclaim the well site.” Stenehjem said the commission also has discretion about the timeframe.

If a landowner believes that an operator failed to plug a well in violation of state rules, the landowner may ask the commission to investigate it, Stenhjem writes.

After reading the opinion, Onstad said if the commission has that discretion, “then why don’t they?”

Landowners with abandoned wells will have another avenue for recourse under a bill approved this past session.

House Bill 1358, which incorporated language from a bill introduced by Nelson, will allow landowners with wells that have been abandoned for at least seven years to request a review of the well’s status. Companies will have to justify during an Oil and Gas Division hearing their reason for temporary abandonment status.

Nelson said the current process is “almost rubber stamp mode,” but the new law will provide more protection to landowners.

Operators have plugged and reclaimed more than 10,350 wells in North Dakota since oil production began in the 1950s, Ritter said.

The state has stepped in and plugged two wells in the past five years, both in 2011, Ritter said. The state also will plug one well this year that was subject to a complaint from the Industrial Commission.

Wells on temporary abandoned status subject to mechanical integrity tests at least every five years and yearly inspections from the state.

The Industrial Commission consists of Stenehjem, Gov. Jack Dalrymple and Agriculture Commissioner Doug Goehring.

N.D. ‘large trigger’ oil tax cut won’t take effect

BISMARCK – The oil tax cut known as the large trigger will not take effect on Monday, causing the state to collect about a half billion dollars more this year than legislators budgeted.

The exemption would have taken effect next month if the price of West Texas Intermediate crude oil at Cushing, Okla., averaged below $55.09 a barrel for a fifth consecutive month in May. The trigger would have lowered the state’s oil extraction tax from 6.5 percent to 4 percent for existing wells and exempted new wells entirely for 24 months.

But oil prices rebounded in May, and the tax cut that loomed over the past legislative session will not take effect.

“Given that oil has been trading mostly in the upper 50s, well above $55.09, we will not be triggering,” State Tax Commissioner Ryan Rauschenberger said Friday.

Legislators built state budgets around a forecast that included the large trigger kicking in, with an estimated tax impact of about $80 million a month.

Ron Ness, president of the North Dakota Petroleum Council, said companies had been making plans to ramp up activity in June if the large trigger had taken effect.

“I think it’s a fairly significant blow to industry,” Ness said. “It would have been a good stimulus.”

An increase in oil activity would have benefited the state through more jobs and sales tax income, Ness said.

If oil prices decline again, there is still a chance that the large trigger could take effect in November. But a bill approved by legislators this past session makes the large trigger expire on Nov. 30.

“One month would essentially be a blip in the radar,” Rauschenberger said of the potential revenue impact.

Another state tax incentive known as the “small trigger,” which took effect Feb. 1, reduces the oil extraction tax from 6.5 percent to 2 percent for the first 75,000 barrels produced.

The small trigger incentive prompted more wells to be completed in March, Ness said. That incentive is set to expire on June 30, giving operators one more month to take advantage of the incentive.

Starting Jan. 1, the oil extraction tax will permanently decrease from 6.5 percent to 5 percent under legislation approved this past session. The gross production tax will not change, bringing the state’s overall tax on oil from 11.5 percent to 10 percent next year.

EPA involved in 2014 pipeline leak investigation

MANDAREE, N.D. – The Environmental Protection Agency is investigating whether Crestwood Midstream violated the Clean Water Act last year when a pipeline spill leaked about 1 million gallons of brine on the Fort Berthold Indian Reservation.

The EPA has issued Crestwood Midstream and Arrow Pipeline a Notice of Potential Violation for the July 2014 pipeline spill near Mandaree.

The notice states that the brine flowed in a stormwater ditch and then a ravine before entering an unnamed tributary and traveling about a mile north through a series of beaver dams before reaching Bear Den Bay of Lake Sakakawea. Lake Sakakawea and its tributaries are waters of the United States.

The EPA has not made a final determination.

Crestwood Midstream also received a grand jury subpoena this year regarding the spill from the North Dakota U.S. Attorney’s Office, according to notes to financial statements Crestwood filed with the Securities and Exchange Commission this month.

Chris Myers, acting U.S. attorney, did not return calls seeking comment.

The company reported two other smaller pipeline spills last year, totaling about 168,000 gallons of brine, as well as another pipeline spill reported May 7 near Mandaree. The tribe has estimated the latest spill at 220,000 gallons, but the spill report to the North Dakota Department of Health included an estimate of up to 336,000 gallons.

Crestwood Midstream did not respond to a request for comment.

Lynn Helms, director of the North Dakota Department of Mineral Resources, commented on the Crestwood saltwater gathering system last week during his monthly update on oil production, saying the system has “substantial problems.”

Helms said the pipeline system was installed in 2010, prior to new rules taking effect that allow the state to regulate gathering pipelines. Because the pipeline is at Fort Berthold, it falls under the jurisdiction of multiple agencies and the Three Affiliated Tribes environmental division has taken the lead on it, Helms said.

Edmund Baker, environmental director for the Three Affiliated Tribes, did not return a call seeking comment.

ND oil production up 1 percent in March

WILLISTON, N.D. – Fracking crews were busy in North Dakota in March, bringing the month’s oil production up 1 percent to just under 1.2 million barrels per day and surprising state regulators.

Lynn Helms, director of the Department of Mineral Resources, said Wednesday he anticipated another drop in oil production due to low prices, but operators completed an estimated 189 new wells in March, preliminary figures show.

North Dakota has been seeing an increase each month in the number of wells waiting on hydraulic fracturing crews – coined a “fracklog” – as operators wait for oil prices to rebound.

But that number decreased from 900 to 880 in March, likely a result of the state tax incentive known as the small trigger and the need for companies to maintain some cash flow, Helms said.

The state had 12,439 wells operating in March, the preliminary figures show, which is an all-time high.

Four companies – Hess Corp., Continental Resources, XTO Energy and Burlington Resources – made up the bulk of the new wells that were completed in March, Helms said. But companies EOG Resources and Marathon Oil have indicated they plan to hold off completing new wells as long as they can, he said.

Helms said he expects oil production to hold steady between 1.1 million barrels a day and 1.2 million barrels per day until mid-2016, unless oil prices exceed $65 or $70.

“It looks like a pretty flat picture as we project out until this time next year,” Helms said.

The number of drilling rigs operating in the state was 83 Wednesday, a 10 percent drop since April and the lowest number since January 2010. The record was 218 in May of 2012.

“We think we’re at or near the bottom,” Helms said.

Natural gas production increased 3 percent in March, but the percent of natural gas flared during the month was unchanged at 19 percent. About 10,000 barrels a day of oil production was curtailed in March so companies could meet gas capture targets set by the North Dakota Industrial Commission, the department said.

Helms said he thinks the state’s new rule to condition Bakken crude oil made a difference in last week’s oil train derailment near Heimdal. In that case, Hess Corp. submitted a test that showed the vapor pressure of the oil was 10.8 pounds per square inch when it was loaded in Tioga.

The order, which took effect April 1, requires companies to treat crude oil so it has a vapor pressure of no more than 13.7 pounds per square inch.

“We do think it helped,” Helms said. “I think if you compare the video and the photographs from Casselton to Heimdal, you see a different character to the derailment and the following fire.”

A vast majority of operators are complying with the new rules, but regulators have not yet had time to verify whether about 4,000 wells are in compliance, Helms said.

Companies can meet the standard by operating their equipment at specific pressures and temperatures. If they choose an alternative method, companies need to submit documentation of a vapor pressure test each quarter.

Operators of about 2,600 wells plan to submit tests to the Department of Mineral Resources. So far, regulators have reviewed more than 2,500 tests and all but eight, or more than 99 percent, were in compliance, Helms said.

“It’s a little bit overwhelming when you look at the amount of data they’re processing,” Helms said.

For another 9,800 wells, the Department of Mineral Resources will verify each quarter that equipment is being operated at the right pressures and temperatures. So far, inspectors have reviewed just under 5,800 sites, or about 60 percent, Helms said. Of those, 90 percent were in compliance, he said.

Those that are out of compliance are given 48 hours to adjust equipment and retest, he said.

The amount of crude oil transported by rail out of North Dakota fell slightly in March to below 700,000 barrels per day, according to estimates from the North Dakota Pipeline Authority. About 54 percent of oil was transported by rail while 40 percent was transported by pipeline.

Director Justin Kringstad attributed the decrease in rail transportation to a drop in oil production in Montana, which he said has no active drilling rigs, a decline in the amount of oil being trucked in from Canada and the Double H Pipeline which recently went into service.

Heitkamp co-sponsors bill to lift ban on U.S. crude oil exports

WASHINGTON – U.S. Sens. Heidi Heitkamp, D.-N.D., and Republican Lisa Murkowski of Alaska plan to introduce a bipartisan bill today to lift the ban on American crude oil exports.

Heitkamp, in an interview Tuesday with Forum News Service, called the 1970s-era ban “antiquated” and said it inhibits American competitiveness.

“We believe the time has come for Congress to weigh in and protect our energy renaissance,” Heitkamp said.

North Dakota would benefit from lifting the ban because U.S. refiners that can process light, sweet crude oil such as Bakken crude are maxed out.

“There is a desperate need to open up the international markets for North Dakota crude,” Heitkamp said.

Sen. John Hoeven, R-N.D., also joined the senators in introducing the bill.

“Lifting the decades-old law banning U.S. producers from selling their product on the world market will help produce more energy, grow our economy and create more jobs, both in North Dakota and across the nation,” Hoeven said in a statement.

Other sponsors are Sens. John Barrasso, R-Wyo., John McCain, R-Ariz., Bob Corker, R-Tenn., Lamar Alexander, R-Tenn., James Risch, R-Idaho, Jeff Flake, R-Ariz., Shelley Capito, R-W.Va., Jim Inhofe, R-Okla., Marco Rubio, R-Fla., and James Lankford, R-Okla.

The proposed legislation seeks to authorize crude and condensate oil produced in the U.S. to be exported on the same basis as petroleum exports. It includes a provision that would allow the president to prohibit oil exports for reasons of national security.

Heitkamp said she and Murkowski, the ranking member on the Senate Committee on Energy & Natural Resources who toured the Bakken in the fall of 2012, are working to build bipartisan support for the legislation.

In addition to opening up U.S. crude to new markets, lifting the ban would promote energy security for the U.S. and its allies, Heitkamp said.

“It would also encourage our friends and allies to import or leverage American oil to lessen the influence and dominant energy positions of unstable countries like Iran, Russia, or Venezuela,” Heitkamp said while speaking on the Senate floor earlier this month. “We have a real opportunity to make a needed change that supports our country, our economy and our security.”

North Dakota state legislators urged members of Congress to lift the export ban in a concurrent resolution they approved during the recent session. Legislators directed that the resolution be sent to every member of Congress.