Regulations Tightening for Natural Gas Flaring

Natural gas flaring is the controlled burning of natural gas at well sites in order to test the pressure, flow, and composition of an oil or gas well.  In some cases, like in the Bakken Shale which sits below North Dakota, Montana, and parts of Canada, natural gas flaring is used to burn excess gas that accompanies crude oil. In that case, the oil is more valuable and the infrastructure isn’t in place to cost-effectively produce the natural gas, as well. Since methane is a greenhouse gas, it is considered cleaner to burn the clean-burning natural gas, rather than vent it directly into the atmosphere.

At the Bakken Shale, operators have less stringent flaring regulations than other U.S. regions like Texas. State regulators are putting an end to this very soon in an effort to curb the amount of natural gas being burned at well sites. In North Dakota, the North Dakota Industrial Commission is enforcing tighter flaring regulations starting September 30^th of this year. North Dakota has recently seen a dramatic increase in crude-oil production thanks to fracking in the Bakken Shale. However, much of the natural gas is not being captured.

According to the Wall Street Journal, “[These] guidelines, which were proposed by the industry earlier this year, set targets for flaring at 23% of all gas produced by January 2015. The target is then reduced to only flaring 10% of gas produced by 2020 and potentially 5% beyond that.” The state is currently burning off about 30% of gas produced. These changes are actually very feasible seeing as how Texas only burns off 0.8%, according to the Texas Railroad Commission. However, that doesn’t mean smaller operators won’t be negatively affected by the new regulations. Many independent operators do not have the capital or ability to make these changes so rapidly. If a company doesn’t meet the new guidelines on a statewide basis, their well operations could be completely halted.

The U.S. Department of Interior is also currently considering new federal flaring regulations. Oil and gas regulations can change at any time and can change rapidly. Companies of all sizes need to be ready for these changes at all times. More than ever, regulatory change management is becoming a priority for the oil and gas industry. The best tool to help manage this is regulatory compliance software.

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