ND Defines Stricter Rules for Pipeline Construction & Stripper Well Exemptions

January 14, 2014 R.T. Dukes

A number of changes to the North Dakota Administrative Code could impact pipeline development and stripper wells in 2014. Approved by the North Dakota Industrial Commission last month, forty-seven (47) new rules were proposed, bringing the number of rules for oil and gas operations to seventy (70). According to the Department of Mineral Resources, a division of the Industrial Commission, the changes could take place as early as April 1, 2014. One particular area of the code, 43-02-03-29, addresses pipeline development in the region:

“All newly constructed underground gathering pipelines must be devoid of leaks and constructed of materials resistant to external corrosion and to the effects of transported fluids. All such pipelines installed in a trench must be installed in a manner that minimizes interference with agriculture, road and utility construction, the introduction of secondary stresses, the possibility of damage to the pipe, and tracer wire shall be buried with any nonconductive pipe installed. When a trench for an oil and gas underground gathering pipeline is backfilled, it must be backfilled in a manner that provides firm support under the pipe and prevents damage to the pipe and pipe coating from equipment or from the backfill material.”

The new regulations come at a time when increased scrutiny on pipeline development in the region is piquing. A Tesoro pipeline released approximately 20,000 bbls of crude near Tioga, ND, in October. The cause is believed to be related to corrosion.

NDIC's Authority to Define Stripper Wells Expanded

Yet another area of production that could see an impact are in wells defined as stripper wells. The Director of the Department of Mineral Resources, Lynn Helms, already had the authority to determine stripper well property status. The change could impact the number of wells receiving tax exemptions through stripper well status. The new regulations extend Helms's ability to determine a stripper well. Furthermore, the revised regulations account for horizontal drilling, relative to stripper wells:

"If a well that has previously qualified as a stripper well property is reentered and recompleted as a horizontal well, the stripper well property status on that well will terminate. "

Other facets of production worth noting that will be affected are with the notification of fires, leaks, spills or blowouts and underground injection wells.

Tesoro Website Launched In Response to Oil Spill

October 24, 2013 R.T. Dukes

Tesoro has launched tesoroalert.com to keep everyone up to date on the North Dakota oil spill response efforts. The spill was discovered at the on September 29th and became national news a couple of weeks later. Tesoro estimates 20,000 barrels of oil were spilled. The company has recovered approximately 4,000 barrels to date. The spill affected 7-8 acres and remediation efforts are expected to be completed by the end of 2014.

“We deeply regret our recent crude oil spill north of Tioga, North Dakota. This type of event is unacceptable. We take full responsibility and will make the situation right.......We`re committed to leaving the land in the same or better condition it was in before our event, and we are taking steps to prevent incidents of this kind from occurring again.”

— Dan Romasko, COO

A page of FAQs and the October 10th press release are also included on the site.

North Dakota Oil Spill Recovery Efforts Underway - Tesoro

October 18, 2013 R.T. Dukes

North Dakota oil spill recovery efforts are underway near Tioga in Williams County and it will likely be weeks before we know the full story.

The spill affected a little more than 7 acres and did not penetrate groundwater sources or impact wildlife.

Many have criticized the state for taking 11 days to notify the public. One reason for the delay was officials thought the spill was less than 1,000 bbls.

Tesoro now estimates more than 20,000 bbls of oil were spilled from the pipeline. Some are questioning those estimates, but again it's early and very difficult to estimate the true impact.

"As unfortunate as it is, it is actually very beneficial with a clay layer and not hitting water," one Tesoro official stated.

Tesoro and locals are actually lucky as there is thick clay layer approximately 10-12 feet deep that helped contain the oil. The seal has allowed Tesoro to recover more than 3,000 bbls already. Trenches have been dug to allow the oil to flow out of the soil. Those trenches will likely be used like french drains throughout the winter, while remediation efforts continue.

The section of pipe that was leaking has been sent to an independent lab to be studied and a replacement pipe circumventing the spill site is already being installed.

Watch for an official announcement from Tesoro as the cause and impact of the spill can be more confidently determined.

Tioga Pipeline Gets Regulatory Approval - 2013 In-Service

October 3, 2012 R.T. Dukes

The Tioga Pipeline received regulatory approval on October 1st. Alliance Pipeline has proposed the 12-inch, 79.3 mile lateral from Tioga, ND, to an intersection with the Alliance mainline near Sherwood, ND. From Sherwood, natural gas will be delivered to the Chicago market.

The pipeline has the potential to be expanded, but has been initially approved to transport a little more than 106 mmcfd. The pipeline is supported by a ten-year, 61.5 mmcfd agreement with Hess.

The new lateral will run through Williams, Mountrail, Burke, and Renville counties.

This is a good step toward marketing Bakken Shale gas production. Much of the gas produced to date has been flared due to limited pipeline capacity in the region.

Construction is expected to start immediately with the pipeline being completed in February of 2013. Additional facilities required before the pipeline is placed in service have a target completion of May 2013