May 22, 2013

Oil, gas production sets record

By Kate Ruggles
Farmer Staff Writer

To the surprise of the North Dakota Industrial Commission, despite three major snowstorms in March, oil and gas production during that time was at an all-time high. The average barrel per day produced in March was 782,812, while a new all-time high of 846,906 million cubic feet of natural gas was produced in that time as well.
Given that North Dakota continues to set oil and gas production records, and the reserves of oil and natural gas yet to be recovered are huge, the North Dakota Industrial Commission has been working hard to make sure everyone in Washington, D.C., understands the scope of oil and gas production as well.
“We don’t often get a lot of opportunities to go to Washington, D.C., and represent the interests of North Dakota,” states Lynn Helms, director of the North Dakota Industrial Commission. “But last week we were given that chance.”
Going with a group called the Western Energy Alliance, Helms and members of the Industrial Commission visited with 190 congressmen and senators and talked with them about issues such as federal policies and taxes that impact western energy states.
“I had the opportunity to testify in two hearings,” states Helms. “One was before the committee of Science, Space and Technology about the Keystone Pipeline.”
The Keystone Pipeline is a pipeline system that originates in Alberta, Canada, and will eventually extend down to the Gulf of Mexico. The project has not been approved by President Obama yet, and continues to be met with controversy.
“There are already 60,000 barrels per day committed to the Keystone Pipeline project. And there is space for 100,000 bpd,” states Helms.
According to Helms, that commitment and the space for additional commitments to transport crude by the Keystone Pipeline means 300 to 500 less semis on North Dakota highways every day.
“Oil would, instead of finding its way out of state by truck, be going out of state by pipeline,” states Helms. “And the Department of Transportation estimates that three to six traffic fatalities, and roughly 80 to 150 traffic injuries, are associated with that kind of trucking.”
The second committee Helms spoke in front of was the Department of the Interior on their proposed land management hydraulic fracturing rules.
“If the federal government adds an additional layer of permit regulations on to what we already have, then all federal lands in North Dakota will be severely impacted,” states Helms, referring specifically to the Ft. Berthold Indian Reservation.
“As it stands right now, it takes 180 to 200 days to get a drilling permit on Ft. Berthold, as opposed to 20 to 30 days for state and private lands,” states Helms. “Our estimate is that additional regulations will double that wait time.”
Helms states that he received a mix of reactions during his time in Washington, D.C.
“I met with the congressman from Oklahoma and he was all in on hydraulic fracturing. But the congressman from Idaho was not so much,” states Helms. “Then there were meetings with congressmen from Hawaii and California where there wasn’t much opportunity to get into a deep discussion. It was more of a meet and greet and leave some material behind.”
Helms states there are some pieces of legislation that could help. One is to tell the Department of Interior not to impose hydraulic fracturing regulations, and the other is for a pilot program that will promote the sharing of resources.
This second piece of legislation would, according to Helms, direct the Department of the Interior to move people from less busy parts of the country and rotate them into busier and bogged down places, like western North Dakota.
According to the North Dakota Industrial Commission, there are major strides taking place in oil and gas production. And not just regarding the recently released U.S. Geological Survey of the Bakken and Three Forks formations.
A report issued by the International Energy Agency refers to the technology being used in North Dakota in shale oil recovery as a game-changer. And Helms agrees.
“North Dakota will be one of the places that change the whole import/export dynamic in the United States,” states Helms.
As a whole, the Industrial Commission remains optimistic, both about their trip to Washington, D.C., and the state’s oil and gas production moving into the summer months.
Rig counts are currently at 193, and are estimated to reach 200 in the summer. Helms also expects to see significant strides in reducing flaring in the summer months, as well as more all-time high production records.