BISMARCK – Contentious orders approved by North Dakota regulators to curb natural gas flaring and make Bakken crude oil safer for transport would be dragged back through a lengthy rulemaking process or become void under a bill sponsored by nine Republican lawmakers.
A separate bill filed this week would also expand the state Industrial Commission’s makeup from three members to five, adding the state tax commissioner and Public Service Commission chairperson to the panel now consisting of the governor, attorney general and agriculture commissioner.
A spokesman for Gov. Jack Dalrymple said the governor doesn’t see the need for either bill.
“What problem is it that needs to be solved? We think the current Industrial Commission is doing a good job, including its work to reduce flaring and to ensure that Bakken oil has limited volatility,” Jeff Zent said.
Rep. Keith Kempenich, R-Bowman, the lead sponsor of both bills, said the one pertaining to rulemaking procedures, House Bill 1187, is a reaction to the flaring goals and oil conditioning standards approved as orders by the Industrial Commission in July and December without going through the Legislature’s Administrative Rules Committee.
“We need to be involved when they get into that broad of public policy,” he said, adding, “The Legislature was pretty much left out of the loop as far as what those policies were.”
Kempenich said the committee likely would have rejected the flaring order, calling the goals “arbitrary.”
The order adopted July 1 requires operators in the Bakken/Three Forks pools to meet gas capture goals of 77 percent by Jan. 1, 85 percent by January 2016 and 90 percent by October 2020, or have to scale back production. They met the first goal of 74 percent by Oct. 1. The goals were recommended by an industry task force.
Department of Mineral Resources Director Lynn Helms told lawmakers last week that operators have delayed well completions to meet the gas capture goals. He said it will be a “real stretch” for operators to meet the 85 percent goal by January 2016, and officials have discussed pushing back the goal – a flexibility the commission has because it’s an order and not a hard-and-fast rule, department spokeswoman Alison Ritter said.
The order to make oil conditioning standards to make it safer for transport is set to go into effect April 1.
Under the bill, general rules that didn’t go through the administrative rules process and were put in place through an order dated after June 30, 2014 – which covers both the flaring order and oil conditioning standards – would be void, but not until the law takes effect Jan. 1, 2016.
Kempenich said that would give the commission time to run the orders through the rules process, which Ritter said typically takes nine to 10 months and involves public notices, hearings, comments and multiple reviews.
“More than likely, they’d have to write them a little broader than they did, and then get more specific in their orders” when dealing with individual operators, Kempenich said.
He said the bill to expand the commission, House Bill 1179, is aimed at improving communication because anytime two of the three members discuss matters, it constitutes a quorum subject to open meetings laws. The panel also is increasingly dealing with policy issues that deserve more eyes, he said.
Sen. Bill Bowman, R-Bowman, also introduced a resolution this week calling for an interim study of the Industrial Commission’s membership as it relates to the oil and gas industry.
Concurrent Resolution 4009 notes that other states such as Wyoming have regulatory boards with members possessing industry expertise, “which provides greater experience and technical knowledge in decisions regarding the oil and gas industry.”