North Dakota Proposes New Bakken Waste Rules

December 23, 2014 Elizabeth Alford

On December 12th, the ND Department of Health (DoH) proposed new limits for oil waste disposal that would drastically alter the way the industry does business in the Bakken region. This comes after a study conducted by Argonne National Laboratory concluded that the level of radioactive material (TENORM) found in waste can actually be much higher than current rates and still be safe for oil and landfill workers.

Amounts of radioactivity are measured in units called picocuries, and the new proposal would multiply the amount allowed in waste material by ten times. Landfills choose to accept the higher TENORM material will be required to go through a new permit modification process, which will provide better accountability for the tracking of the radioactive waste.

“Currently, approved landfills can accept waste of up to 5 picocuries per gram, which is approximately equivalent to background radiation. Extremely low standards were established because of a lack of available scientific data at the time,” said Dave Glatt, Environmental Health section chief for the NDDoH. “Our proposed rules are based on the best available science and will allow for the responsible and safe disposal of TENORM generated in North Dakota.”

As with other shale oil industry issues that have potential environmental and health concerns, this change brings mixed emotions from people with competing interests and those who are refuting the science of the report. The ND DoH has scheduled a series of special meetings in January to hear testimony and public comments concerning the proposal.

photo credit: joerodz cc

Keystone Showdown Likely for New Year

December 21, 2014 Elizabeth Alford

President Obama’s strong remarks at Friday’s press conference set the stage for what is likely to be a New Year’s showdown over the future of the Keystone pipeline. As the new Republican-led Congress is poised to make this issue its top priority when it reconvenes in January, Obama expressed his concern that the benefits to the U.S. have been exaggerated.

Congress narrowly rejected a bill in November that would approve continued construction that would wind through the Bakken formation of Montana and North Dakota. The votes fell predictably along party lines, but with recent elections bringing Republicans into the majority, a new bill is likely to pass quickly in the new year. It isn't clear whether the President will veto new legislation, but it will not be smooth sailing.

“Commenting on the pipeline, President Obama said that, “It’s very good for Canadian oil companies and it’s good for the Canadian oil industry, but it’s not going to be a huge benefit to U.S. consumers.”

At issue is whether the benefits of the new section of the Keystone pipeline outweighs the potential dangers espoused by democrats and environmental groups. These opposing voices claim that the pipeline will potentially bring great risk to the climate, air quality, the ecosystem, public health, the water supply and landowner rights.

Certainly this issue is complicated, and with the continued debate and outcry over the current methods of transportation for Bakken crude, alternatives must be explored and genuinely considered. Living in the modern world means risk, and at some point it becomes a matter of which risk we are more willing to take. We cannot continue to enjoy, even demand, the lifestyle that this crude affords us without also being willing to make the hard choices that its production demands.

Bakken Operators Slash Budgets for 2015

December 19, 2014 Elizabeth Alford

North Dakota Oil Tax Reductions — Bakken Producers Slash 2015 Budgets

As the free-fall in crude prices continues, major Bakken operators are expressing their caution by slashing their budgets for 2015.

Marathon Oil is the latest giant to announce that its projected budget will curb exploration spending by a whopping 20% for 2015. Though the company still forecasts spending in upwards of $4.4 billion, the decrease is another sign that the spiraling oil prices are casting a dark shadow over the incredible growth that is taking place in the shale regions.

“We remain confident in our investment opportunities in the three U.S. resource plays,” Marathon Oil President and Chief Executive Officer Lee Tillman said in a statement. “Our 2015 capital program is not opportunity constrained but will reflect sound discipline in managing cash flows in the current price environment.”

This news comes as oil plunged Thursday to an incredible $54.11, prices not seen since 2009. And Marathon is not the only E&P company to back off on growth plans. ConocoPhillips is also shaving 20% off for 2015, by deferring investment in unconventional plays. The company, however, is continuing to affirm its commitment to Bakken region, which continues to be a major source of growth for the company. Bakken’s largest operator, Continental Resources, also seems to be getting skittish as it announced Wednesday it will reduce spending in 2015 by $600 million and delay new rig starts while they wait out the current situation.

For more on 2015 budgets visit Reuters.com

Bakken Oil Transport Still Not Safe

December 17, 2014 Elizabeth Alford

When the North Dakota Industrial Commission issued its landmark ruling last week concerning the conditioning of oil, it appeared that they were making a serious move towards improving the safety of transporting crude out of the Bakken. But according to an article in the StarTribune, the new regulations, which go into effect April 2, 2015, won’t bring the industry any closer to a solution for a serious problem that is drawing fire from legislators, concerned citizens and environmental groups.

Alan Stankevitz, an expert on the DOT 111 tanker car, explains in the StarTribune that the standards set by the commission, which includes Gov. Jack Dalrymple, are not enough to adequately address the problem. The order establishes new regulations that demand facilities to maintain an operating pressure at less than 13.7 psi. This is a much larger number than the volatility point for Bakken crude, which is between 11.5 and 11.8 psi.

“Stankevitz writes, “The bottom line is that the limit has been set so high by North Dakota that the mandate is toothless. The same volatile oil that caused the massive explosions in Casselton, N.D., and Lac-Mégantic would still have been allowed to ride the rails, according to this new mandate.”

Stankevitz goes on to charge the commission with using ‘smoke and mirror tactics’ to divert attention away from the real issue, which he believes to be the routine use of old and outdated tanker cars that are leased by the petroleum industry for transportation.

New Regulations for Oil Transportation in the Bakken

December 16, 2014 Elizabeth Alford

new regulations for Bakken add strict guidelines

In an effort to improve the safety of crude production in the Bakken region, the North Dakota Industrial Commission issued an order on December 9th that will impose new regulations on oil producers.

The order (no. 25417) is the result of an investigation that began at an emotionally charged hearing in September. Over the past two months, commission members Gov. Jack Dalrymple, Attorney General Wayne Stenehjem and Agriculture Commissioner Doug Goehring considered oral and written comments from technical witnesses, manufacturers, land/royalty owners and the general public.

The new regulations will go into effect on April 1, 2015 and require that all new wells in the Bakken Petroleum System utilize equipment that controls vapor pressure in order to lessen the likelihood of explosions during transportation. This order comes as a series of troublesome events in 2014 escalated a growing national concern over the transportation methods of Bakken crude.

“The commission issued a joint statement that “The North Dakota Industrial Commission reiterates the importance of making Bakken crude oil as safe as possible for transportation. This order will bring every barrel of Bakken crude within standards to improve the safety of oil for transport.”

In order to come into compliance, producers will have to shell out millions of dollars for new equipment, updated facilities and increased personnel. The order also establishes the Commission’s jurisdiction over these matters and provides for potential criminal and civil penalties for producers that are deemed noncompliant.

Read the Commission Report here.