Topic: North Dakota

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Wyoming federal judge issues preliminary injunction against BLM’s hydraulic fracturing regulations

The Independent Petroleum Association of America (IPAA) and several states, including Wyoming, Colorado, North Dakota, Utah, and the Ute Indian Tribe rejoiced when Wyoming federal judge Scott W. Skavdahl issued a preliminary injunction against the U.S. Bureau of Land Management’s (BLM) new hydraulic fracturing regulations.

“We are pleased to see Judge Skavdahl agrees with our request to first hear the merits of our case before this final federal rule goes into effect,” IPAA Pres. Barry Russell stated following the September 30 order.

The complaint was filed by IPAA and Western Energy Alliance on March 20 to challenge BLM’s final ruling … Continue Reading

North Dakota utilizes tax incentive scheme to encourage oil production

According to the North Dakota Industrial Commission, the amount of crude oil produced in the state has decreased dramatically. Whereas 1.2 MMb/d of crude oil was produced in the state in December, only 37 Mb/d was produced in January. In addition, the number of wells completed in the state also dropped. Commentators have speculated that the drop in production and well completions is the result of low crude oil prices. However, companies may simply be biding their time until North Dakota tax incentives are triggered.

Two taxes apply to the majority of the crude oil produced in North Dakota. The … Continue Reading

Opposition to federal fracking rules grows

Earlier this year, the Department of Interior’s Bureau of Land Management (BLM) released its final version of rules governing hydraulic fracturing on federal land. As discussed in a previous post, these rules will not only impose heightened requirements on drilling operations but also increase the reporting duties for drilling operators. Shortly after the BLM released its proposal, the Independent Petroleum Association of America (IPAA) and Western Energy Alliance (WEA) sued the BLM in Wyoming to challenge the proposed rules. The IPAA and WEA argued that the BLM’s rules are unnecessary because states adequately regulate hydraulic fracturing. The IPAA and … Continue Reading

North Dakota considers additional regulation of oil and gas operations

Several federal agencies have announced that they will adopt additional regulations for the oil and gas industry this year. It appears that states are also weighing additional regulatory measures. North Dakota is contemplating legislation targeted at reducing the time oil companies burn natural gas from oil wells.

The bill proposal is sponsored by Senator Connie Triplett. If enacted, the bill would mandate that companies pay royalties and taxes on natural gas within fourteen days after an oil well starts production. Under the current system, companies need not pay royalties or taxes until a year after the beginning of production. If … Continue Reading

North Dakota adopts heightened safety standards for the transportation of oil by rail

The increase in the number of accidents involving the transportation of oil by rail has increased the scrutiny on shippers of Bakken crude oil. In response, the United States Department of Transportation has proposed new rules to govern the shipment of oil by rail and has also issued emergency orders on this topic. It appears that states are beginning to take an active role in the regulation of Bakken crude oil as well.

On December 9th, the North Dakota Industrial Commission (Commission) announced new regulations governing the shipment of Bakken crude oil in the state. Under the new standards, companies … Continue Reading

Increased rail traffic leads to heightened regulations

Compared to last year, transportation of goods by rail has increased. The two commodities with the largest increase in rail traffic have been coal and crude oil products. Transportation of crude oil and petroleum products by rail has increased by 13.4 percent. From January to October 2014, more than 672,000 tank cars have transported oil and petroleum products. Commentators have suggested that the increase is a result of the increased production of crude oil and the limited amount of pipeline available to transport the material. The amount of crude oil and petroleum products transported by rail pales in comparison to … Continue Reading

IPAA response to proposed rule on transportation of crude oil by rail

The Independent Petroleum Association of America (IPAA) and the North Dakota Petroleum Council (NDPC) recently submitted comments regarding the proposed rule concerning the shipping of crude oil by rail. In the rule, the Department of Transportation Pipeline and Hazardous Materials Safety Administration (PHMSA) specified, among other things, that the tanker car fleet currently used must be retrofitted within a two-year period to comply with heightened standards specified in the rule.

The IPAA and NDPC commented that, according to industry experts, at least six years are needed to replace the current fleet. Imposing a two-year phase-out would, in the IPAA and … Continue Reading

Reports show Bakken crude oil within safety standards

The North Dakota Petroleum Council (NDPC) and the American Fuel & Petrochemical Manufacturers (AFPM) recently released the results of studies relating to the characteristics of Bakken crude oil and the standards required to transport crude oil by rail.

These studies in part respond to a safety alert issued on January 2, 2014, by the Pipeline and Hazardous Materials Safety Administration (PHMSA), which notified “the general public, emergency responders, and shippers and carriers that recent derailments and resulting fires indicate that the type of crude oil being transported from the Bakken region may be more flammable than traditional heavy crude oil.” … Continue Reading

Federal Judge in North Dakota dismisses thirteen gas-flaring royalty lawsuits

On May 14, 2014, US District Judge Daniel L. Hovland dismissed thirteen proposed class actions in which the plaintiffs sought payment of royalties for gas that was flared by oil and gas companies after flaring was permitted by North Dakota statute. The Judge ruled that the US District Court did not have subject matter jurisdiction because the plaintiffs had not exhausted their administrative remedies through the North Dakota Industrial Commission, the state agency that regulates oil and gas activities, including flaring violations.

The plaintiffs did not file a complaint with the Industrial Commission, arguing that exhaustion of administrative remedies was … Continue Reading

EPA reviews states’ solid waste management regulations for oil and gas operations

In an April 1, 2014 memorandum, the U.S. Environmental Protection Agency (EPA) summarized state regulatory programs concerning the management of solid waste from oil and natural gas exploration, development and production (E&P) operations.

In reviewing each state’s regulations, the EPA focused on surface storage and disposal facilities managing produced waters, drilling muds, drilling cuttings, hydraulic fracturing return fluids, and various other waste liquids and materials intrinsically related to oil and gas E&P.

The EPA found that the state regulations were primarily concerned with the “technical requirements associated with the design, construction, operation, maintenance, closure, and reclamation of surface pits, … Continue Reading

Three oil companies voluntarily provide Bakken crude oil testing information to U.S. Department of Transportation

On May 2, 2014, the U.S. Department of Transportation (USDOT) announced that three oil and gas companies voluntarily provided testing data on the crude oil that they ship from North Dakota’s Bakken Shale. This data was supplied in response to the USDOT’s call for action in January 2014, asking that oil companies, shippers, railroads, and industry stakeholders focus on ways to improve accident prevention and mitigation.

The USDOT’s announcement follows months of evaluation and discussions relating to recent train derailments of tanker cars carrying Bakken crude oil, including incidents in Minnesota, Maryland, Pennsylvania, North Dakota, and at three sites in … Continue Reading

Wrongful death lawsuits, by-pass routes and first responder training – Issues relating to the transport of oil products by rail

Nineteen wrongful death lawsuits from the July 2013 train derailment and explosion in Lac-Mégantic, Quebec, Canada were transferred from U.S. District Court in Illinois to the U.S. District Court in Maine on March 21, 2014.

The Maine federal judge ordering the transfer found that these lawsuits were “related to” the Maine bankruptcy proceedings filed by Montreal Maine and Atlantic Railroad Ltd. (MMAR) one month after the accident. Presented with evidence of shared insurance between MMAR and some of the wrongful death defendants, the Court made the “limited finding that claims against certain of the defendants named therein are related to … Continue Reading

North Dakota approves flare reduction recommendations

The North Dakota Industrial Commission adopted several recommendations from the Department of Mineral Resources to reduce the amount of flaring in the state.

These recommendations were based on work of the North Dakota Petroleum Council (NDPC) Flaring Task Force that was formed to study ways to increase the capture of flared gas. In December 2013, North Dakota flared 36% of its produced natural gas.

The NDPC estimates that, by adopting these recommendations, North Dakota could increase natural gas capture to 85% within two years, 90% within six years, and up to 95% thereafter.
The recommendations include:

  • After June 1, 2014,
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Emergency order requires testing and classification of crude oil transported by rail

On February 25, 2014, the US Department of Transportation (DOT) issued an emergency order requiring rail shippers of crude oil to test the crude’s makeup before shipping it and to classify the crude as Packing Group I (high danger) or Packing Group II (medium danger) hazardous material until further notice.

The DOT’s emergency order recognizes that the misclassification of petroleum crude oil as a Packing Group III (low danger) material is an “imminent hazard . . . that presents a substantial likelihood that death, serious illness, severe personal injury, or a substantial endangerment to health, property, or the environment may … Continue Reading

US DOT discuss transport safety issues with oil and rail industry leaders

With the recent December 30, 2013 derailment of tanker cars carrying oil in Casselton, North Dakota, as well as other 2013 incidents  in western Minnesota, Baltimore, Alabama, and at three sites in Canada (Gainfield, Landis, and Lac-Mégantic, where 47 people were killed when  an unattended 72-car freight train derailed in the center of town), the US Department of Transportation (DOT) met with representatives from the oil and railroad industries to discuss transport safety issues relating to crude oil.

At the meeting on January 15, 2014, representatives from the American Petroleum Institute (API) and the Association of American Railroads (AAR) reportedly … Continue Reading

Safety alert relating to flammability of North Dakota Bakken crude oil transported by rail

On December 30, 2013, near the town of Casselton, North Dakota, a westbound train carrying grain derailed. Within minutes, an eastbound 106-car train transporting Bakken crude oil hit the derailed train. The collision caused eighteen oil cars to leave the tracks and catch fire. While no one was hurt, many of the town’s 2,400 residents temporarily evacuated their homes for two days due to explosions, intense flames, and heavy smoke from the burning cars.

Taking note of this and other similar incidents involving trains carrying crude oil (see below), the Pipeline and Hazardous Materials Safety Administration (PHMSA) issued a safety Continue Reading

International Energy Agency predicts that the US will become world’s top energy producer in 2015 but will relinquish that position by 2020

The International Energy Agency (IEA), which was formed in the 1970s to keep track of trends and improve energy security, released its World Energy Outlook 2013 in London on November 12, 2013. The 2013 Outlook provides a review of key trends that IEA believes will shape the future of global energy through 2035. For the US, the IEA projects that it will pass Saudi Arabia and Russia as the world’s top oil producer by 2015 due to the use of hydraulic fracturing and other unconventional technologies in developing its shale gas resources. This will bring the US closer to energy … Continue Reading

North Dakota mineral owners file ten class actions relating to royalties owed for flaring natural gas

Ten class actions were filed in North Dakota by mineral owners alleging lost income due to the flaring of natural gas by various oil and gas producers. According to a July 2013 report by Ceres, the flaring of natural gas in North Dakota has doubled in the past two years.
The lawsuits allege that  the producers have violated several North Dakota Industrial Commission rules relating to flaring and paying royalties for flared gas. After an oil well begins to produce, North Dakota allows limited flaring during the first year. After one year, the producer must apply for a written … Continue Reading

USGS assesses undiscovered oil resources in Bakken and Three Forks Formations

The U.S. Geological Survey (USGS) recently completed a geology-based assessment of the oil and gas resources of the Bakken and Three Forks Formations, located in North Dakota, Montana, and South Dakota, finding that these formations together hold an estimated mean of 7.38 billion barrels of oil, 6.7 trillion cubic feet (tcf) of gas, and 0.53 billion barrels of natural gas liquids. See USGS Fact Sheet 2013–3013: Assessment of Undiscovered Oil Resources in the Bakken and Three Forks Formations, Williston Basin Province, Montana, North Dakota, and South Dakota, 2013. The Three Forks Formation was found to have 3.73 billion barrels … Continue Reading

Survey of Flaring Regs for Arkansas, Colorado, Louisiana, North Dakota, Pennsylvania, Texas and Wyoming

Survey of Flaring Regs for Arkansas, Colorado, Louisiana, North Dakota, Pennsylvania, Texas and WyomingNatural gas production is booming in the United States.

Operators, aided by advances in hydraulic fracturing, have ramped up production, whether by reworking old oil wells or exploiting new formations altogether.
However, just because an operator has the ability to produce natural gas does not necessarily mean that it can sell the gas; compressors, pipelines, treatment plants, and other infrastructure must be prepared in order to get the gas to market.

In some cases, this lack of infrastructure has led operators to vent or flare gas at the wellhead.

In order to get a better understanding of where the law … Continue Reading

Texas, Other States Move Forward With Hydraulic Fracturing Disclosure Regulations

Earlier this year, Texas became the latest state to draft regulations requiring the disclosure of chemicals used in the hydraulic fracturing process. Michigan and Montana issued similar regulations over the summer, joining Arkansas, Wyoming, and Pennsylvania as states recently active in regulating hydraulic fracturing.[1] The new regulations require specific disclosures by operators and outline requirements for construction and operation of the well and continued monitoring of well activity. Three additional states, Louisiana, New York, and North Dakota, have proposed regulations open for public comment. This briefing examines recent changes and additions in hydraulic fracturing regulations throughout the country.

Texas: Public

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