New rules take effect for Bakken crude, but will they improve safety?

WILLISTON, N.D. – New rules for conditioning Bakken crude oil take effect today, but will they improve the safety of transporting crude by rail?

The industry and state regulators say yes.

Critics say no.

And a scientist researching the issue says we don’t know yet.

So how is the public supposed to make sense of it all? We’ll try to break it down.

What is the new oil conditioning order?

Starting today, oil companies in North Dakota will be required to remove more volatile gases from Bakken crude oil so it has a vapor pressure of no greater than 13.7 pounds per square inch.

Oil conditioning occurs at the well through equipment that separates the oil, gas and water. Companies can meet the new standard by operating their equipment at specific pressures and temperatures. If they choose an alternative method, companies will need to submit documentation that shows they are meeting the standard.

How was 13.7 chosen?

The independent standards organization ASTM, formerly American Society for Testing and Materials, defines stable crude oil as having a vapor pressure of 14.7 psi. Equipment that tests for vapor pressure has a margin of error of 1, so state regulators chose 13.7 to ensure that it meets the definition, said Alison Ritter, spokeswoman for the Department of Mineral Resources.

Will a vapor pressure of 13.7 make Bakken crude safer in the event of a train derailment?

We don’t know yet, says Chad Wocken, senior research manager with the University of North Dakota’s Energy and Environmental Research Center. More research is needed to understand what properties in Bakken crude cause it to be so volatile, he said.

“We don’t really know what vapor pressure would allow a current rail car to transport crude safely,” Wocken said.

The EERC plans to participate in a Department of Energy study that would further investigate the characteristics of Bakken crude to understand what causes the massive fireballs that have resulted from recent train derailments.

While the vapor pressure is one indicator, Wocken said other factors also need to be analyzed. If the study is funded, it could occur later this year or next year, Wocken said.

“Trying to understand how all these crude oil properties really impact behavior in an accident setting is something that really needs to be studied,” Wocken said.

Then what does the order accomplish?

For the first time, it ensures that Bakken crude meets a consistent standard. State regulators consider it one step toward making rail transportation of Bakken crude oil safer, Ritter said. Other key areas include improving track maintenance, stronger rail cars and new federal Department of Transportation rules, she said.

“When you know what’s in the cars, you can design a better, safer car,” Ritter said.

The order could be amended if new research points to a different vapor pressure guideline, Ritter said.

“We are using the best science that we have available,” she said.

Is the industry ready?

Yes, said Kari Cutting, vice president of the North Dakota Petroleum Council, who estimates companies have spent $20 million on equipment to comply with the order. The new requirement also will cost the industry an estimated 10 cents to 20 cents per barrel, or $120,000 to $240,000 a day based on daily oil production of 1.2 million barrels per day, she said.

How will it be enforced?

Department of Mineral Resources field inspectors will check the pressure and temperature settings during routine well inspections, which are supposed to occur quarterly, Ritter said. Violations can lead to civil or criminal penalties.

What do critics say?

Ron Schalow of Fargo, an outspoken critic of rail transportation of Bakken crude, said he can’t get officials to tell him how many fewer fatalities will result from this new order.

“There’s going to be more derailments, and the same thing is going to happen,” Schalow said. “I think they devised something that would make it look like they were doing something, but they avoided what they really needed to do, which was stabilization.”

Does the order allow for stabilization or other technology?

Companies could request a hearing with the North Dakota Industrial Commission if they want to adopt another process to condition the oil, including stabilization, which safety advocates often mention but is not required by the state.

But if the companies pursue stabilization, they also would need to have additional pipelines and stabilization facilities in place to handle the additional light hydrocarbons that are removed during the process, Ritter said.

So far no companies have requested hearings for an alternative technology, she said.

More research is still needed to determine if stabilization would make rail transportation of Bakken crude safer, Wocken said.

What other consequences will this order have?

The new order is expected to increase natural gas flaring by 2 percent because of the additional gases that are removed from the oil, Ritter said.

That will put additional constraints on operators who are already trying to meet new requirements from the Industrial Commission to reduce flaring.

“We’re literally burning the candle at both ends,” Ritter said.

The department estimates that companies will restrict oil production by 12,000 barrels a day to comply with the oil conditioning order and another 12,000 barrels a day to comply with flaring guidelines also in effect, Ritter said.

 

Marred by recent spill, pipeline company outlines next project

CROSBY, N.D. – The Public Service Commission pressed a pipeline company for details Monday about how it would detect spills in a proposed crude oil pipeline in northwest North Dakota.

Meadowlark Midstream, the company under investigation after a massive saltwater pipeline leak near Williston, is seeking permission from state regulators to proceed with a new project.

The company proposes to construct a 46-mile steel pipeline to carry oil from its pump station southeast of Fortuna to the Basin Transload Rail Facility southeast of Columbus.

The pipeline would initially carry 20,000 to 25,000 barrels per day and could increase to 50,000 barrels per day, said John Millar, a vice president for Summit Midstream, the parent company of Meadowlark.

The rail facility, which ships Bakken crude to East Coast refineries, currently receives most of its shipments by truck, Millar said. The pipeline would not eliminate truck traffic, but it would reduce how far the trucks have to travel to get oil to the rail facility, he said.

Commissioners and staff with the PSC referenced Meadowlark’s recent saltwater pipeline break north of Williston that spilled nearly 3 million gallons of brine adjacent to Blacktail Creek. The Department of Mineral Resources and the North Dakota Department of Health are investigating the spill, the largest of its kind in state history.

The company has done a lot of work since that spill was discovered Jan. 6 to better prevent and detect spills, Millar said.

“We’re really focused on that right now, I can assure you,” Millar said.

The proposed crude pipeline would be equipped with technology so it could be remotely monitored around the clock from a control center in Texas, Millar said.

Block valves at each end of the pipeline could be controlled remotely from that operations center. The pipeline also would have six intermediate block valves that could be shut down manually, Millar said.

“You indicated that someone could get there very quickly. What’s very quickly?” asked Zack Pelham, legal counsel for the PSC.

Millar said the company has two staff members in Divide County with plans to add a third. He estimated they could likely respond in 15 minutes.

In addition, the pipeline would be monitored through aerial inspections every two weeks and routine foot patrols, Millar said.

Commission Chairwoman Julie Fedorchak asked the company to submit details about how many staff are dedicated to monitoring North Dakota pipelines from the Texas control center.

The PSC also took testimony from several members of the public. Evan Whiteford, a representative of the Great Lakes Organizing Committee of North Dakota/Minnesota Laborers’ union, testified about concerns he’s observed about the quality of the work in another Summit project.

Whiteford told commissioners the deficiencies he observed by another subcontractor made him question of quality of Summit’s environmental work.

Clint McKinney, who works for B&G Oilfield Service, testified that he’s worked for Summit on other projects and the company employs an environmental consultant to monitor that the work is up to par.

“They are cracking down,” McKinney said.

Fedorchak estimated the PSC would make a decision by mid-April. Meadowlark would like to begin construction on the $33 million project in May and estimates construction would take most of this year.

The PSC also is considering another application from Meadowlark for a smaller crude oil pipeline in Williams County.

 

Manufacturers trying to find their niche in oil industry

WILLISTON, N.D. – A product a North Dakota manufacturing company began making for one oil customer is now exported to several states.

The success story of a product from Steffes Corp., with locations in Dickinson and Grand Forks, served as an example this week for regional manufacturers trying to break into the oil and gas business.

Steffes, which eight years ago began making tanks and walkways for the oil industry instead of ag hopper bins, had one customer that wanted a better flaring system, said Todd Mayer, new product development and sales manager.

Steffes developed a natural gas flaring system that burns cleaner, with less volatile organic compounds released into the air, and the company anticipated the customer would order one or two a month, Mayer said during a Manufacturing and Logistics Conference held in Williston.

The company never marketed the product, but word of mouth prompted demand for the flaring system to spread. Steffes now sells it to other companies in North Dakota as well as Texas, Colorado, Wyoming and New Mexico, Mayer said.

Manufacturing companies from the region, including several from eastern North Dakota, attended the conference to learn how they, too, could make products for the oil and gas industry.

“I would say there’s very little that we can’t make here,” said David Lehman, manufacturing engineering extension specialist with North Dakota State University.

The event served as the launch of a new initiative from Williston Economic Development to reduce costs for companies operating in the Bakken by offering more products and services locally.

But it can be challenging for local manufacturers to get a foot in the door with oil companies, which typically make purchasing decisions at the corporate level.

Economic Development Director Shawn Wenko said his office will lead an in-depth study to understand the challenges the oil companies face and identify opportunities for manufacturers.

Oil industry representatives said during the conference that delays getting equipment or parts shipped in from other states often create costly delays.

“Time is money,” said Dave Ruffie, production foreman for Continental Resources.

North Dakota manufacturers have increased how much oil and gas business they’re doing over the past five years, Lehman said. But there’s room to do a lot more.

“What we’re doing is a fairly small percent of the entire supply chain,” Lehman said.

TrueNorth Steel, with corporate headquarters in Fargo, has produced oilfield tank products since the 1980s, said sales manager Scott Johnson. The company tries to stay innovative by spending time in the field to see what’s working and what’s not.

“It’s a lot more expensive to fix problems in the field than it is in our factory,” Johnson said.

In addition to oilfield tanks and catwalks, TrueNorth produces a steel containment system to contain oilfield spills that takes less time to install in the field than competing products, Johnson said.

Other North Dakota companies have begun doing oilfield work more recently.

Brad Odegard, owner of FlexTM in Wahpeton, said he first explored opportunities in the Bakken in 2011, spending the night in the Williston Walmart parking lot because he couldn’t find a hotel room.

Odegard said he found business in the Bakken by listening to what the challenges were and seeking expertise from the industry. One company representative in Denver was impressed that they could do weekly deliveries to the Bakken, he said.

Dana Wiertzema, sales manager for AIM Machining in Wahpeton, said for the past few years the company has manufactured products and reworked tools used by the oil industry. Some of company’s success has come from attending national oil conferences and reading trade magazines to find ideas, he said.

Attendees at the conference said they think the low oil prices and a slowdown in agriculture manufacturing provide opportunities for the two industries to work together.

“In the middle of the economy that’s slowing down, there’s opportunities,” Wiertzema said. “Why can’t we be part of that next success story?”

 

Study highlights oil’s economic impact on ND, but also shows how oil money trickles out of state

File photo by Dustin Monke / Forum News Service

File photo by Dustin Monke / Forum News Service

WILLISTON, N.D. – While a new economic impact study shows that the oil and gas industry contributed $43 billion to North Dakota’s economy in 2013, it also highlights that several billion dollars left the state.

About half of what the oil industry spends to drill and complete new wells in North Dakota — about $15 billion in 2013 — was not captured in the state’s economy, according to the study by North Dakota State University researchers.

More than $7 billion generated from North Dakota oil and gas exploration in 2013 went to out-of-state companies that provided goods and services for drilling, fracking or well completion, the study says.

A new initiative spearheaded by Williston Economic Development aims to capture more of those dollars in North Dakota.

“I think there’s opportunity for North Dakota to get more out of the petroleum industry than we have to date,” said Dean Bangsund, NDSU research scientist and co-author of the study.

The Enhanced Bakken Supply Chain Initiative seeks to reduce costs for oil companies while expanding manufacturing and business development in North Dakota.

Jeff Zarling, organizer of a Manufacturing and Logistics Conference being held in Williston this week, said oil companies often have no choice but to pay high transportation costs for a product because they can’t get it in North Dakota.

He compares it to ordering Ziploc bags from Amazon.com for $1.50 while paying $7.50 in shipping.

“It sounds funny, but that’s exactly what’s happening,” said Zarling, president of DAWA Solutions Group in Williston.

Economic impact

The oil and gas industry directly contributed $17 billion to North Dakota’s economy in 2013, according to the study by Bangsund and Nancy Hodur of NDSU’s Department of Agribusiness and Applied Economics.

The study also estimates that for every $1 the petroleum industry spent in North Dakota that year, another $1.43 in additional business activity was generated. With the addition of $25.7 billion in secondary impacts, the total economic impact of the industry was estimated to be $43 billion in North Dakota in 2013.

The North Dakota Petroleum Council has commissioned this study every two years since 2005.

The study also showed that the industry directly supported 55,137 full-time jobs as well as 26,403 secondary full-time jobs.

Ron Ness, president of the industry group, said it was interesting to see that the amount of dollars spent on production in 2013 was about equal to the amount spent on exploration, an indication that the workforce is becoming less transient.

“Those are the people that need to live here, that have their families here,” Ness said of the production workforce. “They have to be within a mile of that well.”

The oil and gas industry also generated $4.4 billion in government revenues, primarily in taxes.

In addition, the industry paid an estimated $4 billion in 2013 in royalties to private mineral owners. But more than half of those dollars left the state, the study said, because an estimated 60 percent of private mineral owners live outside of North Dakota.

Another area where dollars left the state was in infrastructure investment.

The study estimates the oil and gas industry spent $3.2 billion building gas processing plants, installing pipelines, constructing rail-loading terminals and adding other infrastructure in 2013.

But the portion of those dollars that was spent in North Dakota is unknown, the study says.

The researchers estimated that figure using data from other studies, which showed that constructing specialized facilities typically requires bringing that equipment in from out of state, Bangsund said.

The study estimates that about 44 percent of the dollars spent on infrastructure stayed in North Dakota, or about $1.5 billion.

Opportunity from efficiencies

The industry added 2,183 new oil and gas wells in 2013, spending just under $7 million to drill and complete each well, the study said.

That is an improvement from the average cost of $9.1 million the industry spent on each well in 2011.

In addition to labor and housing costs being high in North Dakota, operators have to spend more money to transport materials that are only manufactured several states away. In some cases, the operators also have to send tools or equipment out of state to be repaired or refurbished.

“It makes the Williston Basin a more costly operating environment for our producers because they have to source all these materials,” Zarling said.

With today’s low oil prices, companies now have more incentive than ever to try to reduce expenses.

“The industry is all of a sudden very interested in pursuing technologies and sources that can be more efficient than what they’ve been doing,” Bangsund said. “There may be opportunities there, may be substantial opportunities, to do something in state for a little less.”

For example, the industry currently spends a lot of money having mud motors used for directional drilling sent out of state to be refurbished.

“Instead of spending all the money to send mud motors to Houston, how do we do that in Williston?” Ness said.

If operators can significantly reduce expenses, that could make drilling in fringe areas of the Bakken more economic, Bangsund said.

The Manufacturing and Logistics Conference, being held Wednesday and Thursday at Williston State College, aims to bring together manufacturers, suppliers and other stakeholders with the energy industry to explore the opportunities.

“This is planting the seeds for something that’s going to take 10, 15 and 20 years to evolve into creating industry, diversifying our economy and leveraging this economic opportunity,” Zarling said.

 

Economic contribution of the oil and gas industry in 2013

$43 billion in direct and secondary impacts

–          $17 billion were direct impacts

–          $25.7 billion in secondary impacts

For every dollar the oil and gas industry spent in the state, another $1.43 was generated in additional business activity

About 40 percent of royalty owners live in North Dakota. They received more than $1.4 billion in royalties in 2013.

The industry directly contributed 55,137 full-time jobs and supported another 26,403 secondary full-time jobs

The industry contributed a total of $9.3 billion in personal income.

The petroleum industry generated $4.4 billion in government revenues, primarily taxes.

Industry spending 2013

$7.6 billion on exploration

$7.7 billion on production

$957 million on processing/transportation

$1.5 billion on infrastructure

Source: NDSU economic impact study of petroleum industry. Read the complete study at: http://ageconsearch.umn.edu

 

If you go

What: Manufacturing and Logistics Conference

When: March 25-26, with registration starting at 7 a.m. each day

Where: The Well at Williston State College

Info: Cost is $325

For more information: http://manlognd.com

Williston expands women’s clinic in response to rapid growth

Tara Lantis, who is 21 weeks pregnant, discusses her ultrasound with synographer Robert Moore during the grand opening of Mercy Medical Center's Women's Health Clinic on Tuesday, March 24, 2015, in Williston, N.D. Amy Dalrymple/Forum News Service

Tara Lantis, who is 21 weeks pregnant, discusses her ultrasound with sonographer Robert Moore during the grand opening of Mercy Medical Center’s Women’s Health Clinic on Tuesday, March 24, 2015, in Williston, N.D. Amy Dalrymple/Forum News Service

WILLISTON, N.D. – As Williston prepares for another year of record births, Mercy Medical Center celebrated Tuesday the completion of a new Women’s Health Clinic.

A record 804 babies were born in Williston in 2014, and practice manager Tim Olson said officials project that births could exceed 900 this year.

The newly renovated clinic adds two new OB/GYN physicians and a nurse practitioner to serve the rapidly growing community.

“It’s greatly needed and it’s going to be a huge asset to this community,” Olson said.

Mercy Medical Center recruited physicians Dr. Fareed Kadum, most recently of Atlanta, and Dr. Eugene Meade, most recently of Jamestown, for the new clinic, along with local nurse practitioner Heidi Grondahl.

As a former labor and delivery nurse in Williston, Grondahl recalls when the city used to see about 30 births a month. The booming economy resulting from oil development has caused that birth rate to nearly triple.

Tara Lantis moved to Williston two weeks ago with three kids and a fourth on the way. She was relieved to learn this week about the new clinic, and was among several mothers-to-be who got ultrasounds during an open house of the facility on Tuesday.

“It’s nice to know they have high-risk doctors here,” said Lantis, whose husband’s job brought the family from Montana to North Dakota.

Kadum added that the clinic will not only serve pregnant women, but also deal with all facets of women’s health care.

Mercy Medical Center CEO Matt Grimshaw said it took about six to nine months to recruit the doctors to Williston. Mercy has a great relationship with an independent women’s health clinic in Williston, Grimshaw said, but the growing population prompted Mercy to add the new providers.

“We really feel that the future is bright for OB services and the demand will continue to grow as Williston grows,” Grimshaw said.

Halliburton to close Minot facility

MINOT, N.D. – Halliburton will suspend operations in Minot starting April 1 and close the facility, a spokeswoman confirmed Tuesday.

The oilfield services company will transfer a majority of Minot employees to Halliburton locations in Williston and Dickinson, spokeswoman Susie McMichael said in a statement.

She declined to answer questions about how many jobs were cut or being transferred.

“Halliburton is closing the facility as a result of changing business needs from its customers,” McMichael said in the statement.

In response to low oil prices, Halliburton said in February it would cut between 5,200 to 6,400 jobs worldwide. Halliburton has declined to comment on how many jobs have been eliminated in North Dakota.

Earlier this month, Lynn Helms, director of the Department of Mineral Resources, estimated that low oil prices have led to the reduction of 3,000 to 4,000 oilfield jobs in North Dakota. The number of drilling rigs operating in North Dakota on Tuesday was 100, down about 80 rigs from mid-December.

 

Spill reported at Bottineau County site with history of spills

MAXBASS, N.D. – A company involved in a legal action with a Bottineau County landowner reported another spill Wednesday at the same saltwater disposal well with a history of spills.

Petro Harvester reported that a piping connection leak caused 285 barrels, or nearly 12,000 gallons, of brine to release from the Peterson 2 saltwater disposal well, said the North Dakota Oil and Gas Division.

The well, about six miles north of Maxbass, is on property owned by Daryl Peterson, who has long complained that brine spills involving that same location have not been properly cleaned up.

“It’s frustrating and disappointing,” Derrick Braaten, a Bismarck attorney representing Peterson, said of the latest spill.

Peterson, seeking to have his land fully restored, has filed an administrative action against Petro Harvester and other companies. He claims that continued leaks and spills have led to severe contamination of nearby farmland and attempts to clean it up have been inadequate. Hearings are scheduled to begin in June.

The latest spill occurred Tuesday afternoon and was reported to state authorities Wednesday morning, a spill report shows. A Petro Harvester spokesman said in a statement the company initiated cleanup within 90 minutes of discovering the spill and has successfully vacuumed up the brine. The cause of the hose leak is under investigation, the company said.

An Oil and Gas Division inspector had been to the location, the department said.

Petro Harvester and the Oil and Gas Division said the spill was contained within the dikes of the well site. Braaten said it appeared from photos Peterson took that most of the spill was contained but some may have left the location.

Peterson’s legal action also names companies Sagebrush Resource and Ballantyne Oil, previous owners of the well.

Brine is an unwanted byproduct of oil production and is considered an environmental hazard by the state. It is many times saltier than seawater and can easily kill vegetation exposed to it.

Pipeline company offers reassurances after recent spill

WILLISTON, N.D. – The company responsible for the largest saltwater pipeline spill in North Dakota’s history answered questions Wednesday about lessons learned as it proposes to build new crude oil pipelines in the state.

Meadowlark Midstream and Epping Transmission Co., both subsidiaries of Summit Midstream, presented to the North Dakota Public Service Commission plans for a 14-mile transmission pipeline in Williams County.

The proposed project, which would convert an existing 10-mile gathering line and add an additional four miles of new pipeline, would transport crude oil from the Epping Station to the Little Muddy Creek Station, which is about 10 miles northwest of Epping.

Zack Pelham, an attorney representing the PSC, asked what the company learned from the pipeline rupture discovered Jan. 6 north of Williston. The incident, which remains under investigation, spilled nearly 3 million gallons of produced water and contaminated nearby Blacktail Creek, the Little Muddy River and the Missouri River.

John Millar, who testified at the hearing for Meadowlark Midstream, said the proposed crude oil pipeline has a lower “risk profile” than the produced water pipeline that ruptured.

The oil pipeline would be made of steel, much stronger than the composite material called FiberSpar LinePipe the produced water pipeline was made of, Millar said.

The pipeline also would have safety systems, including shut-down valves and pressure and flow sensors that would be monitored 24/7 by a control center in Texas, he said. In addition, the pipeline would be monitored twice a month by air patrol and every week by ground patrol, Millar said.

“I think right-of-way patrolling is something we’ve learned to do probably better,” Millar said. “We’re still trying to figure out why with the patrols we did have in place we didn’t see this spill. We think that’s going to be a more prominent part of our surveillance.”

The company also is making improvements to how pipelines are monitored from the control center, Millar said. The crude oil transmission pipeline would have fewer inlets than the saltwater gathering system, making it easier to monitor for imbalances, he said.

The PSC does not regulate gathering pipelines, including produced water pipelines, but the January spill will factor into the commission’s deliberations to ensure that the company is working to prevent future leaks, Chairwoman Julie Fedorchak said.

“I felt pretty comfortable with the responses that the company offered today,” Fedorchak said after the meeting. “We will do our best to make sure the company has the right plans in place and has changed their procedures to avoid future accidents.”

No members of the public testified at the hearing. Millar said the company has obtained all the necessary right-of-way agreements for the project and he’s not aware of concerns from landowners.

The company requested a 55,000 barrel storage facility as part of the project but Williams County denied the zoning permit.

Administrative law judge Wade Mann presided over the hearing because of scheduling conflicts the three-member commission had this month with the legislative session. Mann will issue a recommendation and the commission will accept, reject or modify the application, a process Fedorchak estimates will be complete in 30 days.

Meadowlark Midstream also is proposing a 46-mile crude oil transmission line in Divide and Burke counties in northwest North Dakota. That hearing, scheduled for 9:30 a.m. March 30 at the community center in Crosby, is expected to attract public input, Fedorchak said. All three members of the commission plan to attend, she said.

The North Dakota Industrial Commission and the North Dakota Department of Health are investigating the brine spill discovered Jan. 6. Director of Mineral Resources Lynn Helms has said preliminary information indicates that the pipeline was leaking for more than 12 days when the rupture was discovered, but the investigation is ongoing.

Low prices prompt 3 percent decline in ND oil production

BISMARCK – North Dakota oil production dropped 3 percent in January to just shy of 1.2 million barrels per day, the Department of Mineral Resources said Thursday.

Low oil prices are prompting more operators to delay bringing new oil wells online, Director Lynn Helms said, causing monthly oil production to drop from last month’s record high.

The low prices also have led to a rapid decline in the number of drilling rigs operating in North Dakota, which was 111 on Thursday, the lowest since April 2010.

The rig count is expected to bottom out around 100, Helms said, about 20 lower than he predicted a month ago. The state’s record was 218 rigs operating in May 2012.

Drilling contractors have cut at least 800 full-time jobs in North Dakota, Helms said, and will cut more as additional rigs become idle. Helms estimated the total jobs lost at 3,000 to 4,000.

“It’s becoming painful for them out there in the Oil Patch,” Helms said.

Crews completed 47 wells in January, according to the preliminary numbers, compared with 183 wells that were completed in December.

Helms estimates that the state needs to have 115 wells drilled and completed each month to maintain production of 1.2 million barrels per day.

While additional months of declining production are expected, Helms said he anticipates a surge in production in June.

The state now has an estimated 825 wells that are drilled but waiting for hydraulic fracturing crews. Those wells need to be completed within a year, and the deadline for 125 of those wells is at the end of June.

“We anticipate June to be a really big month in terms of completions and production increases,” Helms said.

A tax incentive referred to as the “large trigger” could take effect in June, also contributing to an increase in production that month.

If the West Texas Intermediate oil price is less than $55.09 for five consecutive months, the large trigger kicks in and provides an exemption from the oil extraction tax for the first 24 months of production.

Tax Commissioner Ryan Rauschenberger said Thursday that about 70 percent of the state’s oil production is from wells less than 24 months old.

“It has quite a large fiscal impact,” Rauschenberger said.

A new state revenue forecast that is expected next week assumes the large trigger will kick in this June and stay in effect at least part of next biennium, Rauschenberger said. The revised forecast also will take into consideration lower sales tax, income tax and corporate income tax revenue associated with fewer wells being drilled.

While a month earlier Helms said he didn’t think the state would hit the large trigger, he said Thursday he has since changed his attitude based on crude oil inventories nationwide that will have an impact on WTI prices.

The percent of natural gas flared in North Dakota decreased to 22 percent in January. Companies beat the January target set by the North Dakota Industrial Commission by 1 percent.

Flaring on the Fort Berthold Indian Reservation was lower than the rest of the state for the first time ever, Helms said. Flaring on trust lands within the reservation, which historically had been greater than the state’s average, was 20 percent.

The improvement largely resulted from companies adding more natural gas compressor stations last year, Helms said.

Some companies had to voluntarily curtail oil production in order to meet gas capture targets, an amount Helms estimated to be 12,000 to 15,000 barrels per day.

Also Thursday, the Dakota Resource Council and the Dacotah Chapter of the Sierra Club called on state legislators to do more to reduce natural gas flaring.

The organizations cited a recent poll conducted by the Social Science Research Institute at the University of North Dakota that found that 65 percent of respondents said mineral owners should be paid royalties for natural gas that is flared.

State investigates improper disposal of oilfield waste in Williston

Used filter socks were discovered this week next to the shop of an oilfield service company in Williston, N.D. Cleanup of the waste will begin on Friday. Photo courtesy of the North Dakota Department of Health

Used filter socks were discovered this week next to the shop of an oilfield service company in Williston, N.D. Cleanup of the waste will begin on Friday. Photo courtesy of the North Dakota Department of Health

WILLISTON, N.D. – State officials are investigating about 100 filter socks that were improperly disposed of in north Williston, the Department of Mineral Resources said Thursday.

Clean-up is expected to begin Friday to remove the new and used filter socks discovered by a citizen who reported the oilfield waste to authorities on Monday, said department spokeswoman Alison Ritter.

Used filter socks, a waste product of oil and gas production, contain low levels of naturally occurring radioactive waste and need to be transported out of state for disposal under current rules.

The filter socks were on trailers parked next to a shop within Williston city limits.

Green Diamond Environmental Services rents the location where the filter socks were found and agreed to cover the cost of cleanup and disposal which owner Lee Farris said is more than $12,500.

Investigators are still working to determine who is responsible for the waste, Ritter said, adding that it’s too early to comment on whether a fine will be warranted in this case.

Farris said he didn’t realize until he was contacted by the state that workers had not properly disposed of the used filter socks. He estimates about 40 of the filter socks found were used and the waste had been there for more than one year.

“I didn’t realize there were any dirty filters that needed to be disposed of or I would have done it a long time ago,” Farris said. “Nobody was trying to hide anything here.”

The North Dakota Department of Health also is investigating. Field tests indicate the level of radioactivity of the filter socks is slightly above the background radioactivity level at the site.

“The readings at the site were pretty low, so the public’s not at risk,” said Scott Radig, director of the Division of Waste Management.

Since last June, companies have been required to store used filter socks in covered, leak-proof containers at well sites. This is the first reported incident of improper disposal since that rule took effect, but officials believe the waste had been there prior to the new rule taking effect, Radig said.

Ritter encouraged the public to contact local law enforcement, the Department of Mineral Resources or the health department if they discover filter socks at an improper location.

Green Diamond Environmental Services hauls water for the oil industry, but has not been active in the Bakken for about a month due to the slowdown in activity resulting from low oil prices, Farris said.