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  • NDPC provides comment on NDIC rules

    The North Dakota Petroleum Council (NDPC) says administrative rules for reporting of spills and well pad construction requirements that were proposed by the North Dakota Industrial Commission go beyond legislative intent and should be reevaluated for necessity and effectiveness. The NDPC submitted comments to the North Dakota Industrial Commission (NDIC) in October with suggested amendments to the rules, which involved 30 changes to the regulatory framework in North Dakota.

    “Many of the 30 proposed rule changes are clearly a step in the wrong direction,” said Brady Pelton, government affairs manager for the NDPC. “Several are simply unnecessary, costly and contrary to legislative intent. We support smart innovative adjustments to existing regulations, but several of those proposed go well beyond minor modifications.”

    The rules were a result of the 2017 legislative session, including legislation that increased the reporting threshold for spills contained on a wellsite or facility from one barrel to more than 10 barrels over a 15-day period. The new rules as written, however, would require all spills to be reported after spill or leak cleanup via sundry notice, effectively circumventing legislative intent on the matter.

    The NDIC also proposed requirements for well pad and facility construction, including the construction of dikes around all production equipment and the use synthetic liners on pads for treating plants, and also required adding detailed information to royalty statements. The NDPC argued that these rules would come at a substantial cost to the industry while offering no additional benefit to safe and responsible development, The NDPC urged that an economic analysis of those costs be done since they exceed $50,000 in additional costs.

    “We believe many of these rules should be reevaluated for their necessity and effectiveness. We must remain cognizant that not all facets of industry are the same, and one-size-fits-all rules are not good practice,” said Pelton. “Many of the proposed rules are extremely proscriptive and limit the industry’s ability to implement operational efficiencies developed through technological advances and hands-on experience. Overregulation and restrictive rules only add cost to those that follow the rules and limit the ability of those with the most expertise to develop effective solutions.”

    In addition to the initial comments submitted, the NDPC also provided supplemental comments suggesting the inclusion of the qualifier “if available” to several provisions. This includes one that would have required the reporting of oil and gas metering systems serial numbers and detailed schematics of flow lines and transfer lines during a bond and transfer of wells. In many circumstances, the NDPC argued this information may not be available to owners. The NDPC also proposed replacing a provision that called for an “environmental assessment” with “follow-up site assessment” to avoid confusion with federal language and clarify the purpose of the rule.

    The North Dakota Department of Mineral Resources Oil and Gas Division is now considering public comments, and the NDIC is scheduled to meet on December 4 for final consideration.