New rules, regulations coming for ND oil and gas industries New rules and regula
ID: 2440974 • Letter: N
Question
New rules, regulations coming for ND oil and gas industries
New rules and regulations are coming for North Dakota's oil and gas industry, but the one that is staying the same will probably make many on the western half of the state happy.
The Industrial Commission, comprised of the attorney general, the governor and the agriculture commissioner, approved rules that are intended to allow everyone to have a voice - as well as improve safety - in the state's oil and gas industry.
When the Department of Mineral Resources proposed limiting speakers in hearings to quote 'interested parties,' many voiced their displeasure. The DMR listened, and they've now eliminated that wording.
"The public did not want 'interested party' to be part of our rules or any kind of restriction on their ability to be able to state their opinion to the commission so it was just absolutely the appropriate thing to do to remove that proposal," says Lynn Helms, Department of Mineral Resources Director.
Helms also presented a rule that will require every well site to have a six-inch clay barrier, called a berm, around it. Many new well sites have them, but he says at least 4,000 old sites may need new berms.
"They didn't go back and put perimeter dikes on the things that they had previously constructed or drilled and so this is now going to apply to everything going back to 1951," says Helms.
Finally, the DMR is adding new pipeline requirements as well, such as forcing independent inspectors to answer to the department's inspectors.
"I think that's probably the most significant thing. There's some basic construction requirements but now the independent inspectors are going to be answering to someone," says Helms.
Helms says these rules could take effect as early as October.
While the Industrial Commission approved the rules, they still have to be approved by the attorney general's office and the Legislature's Administrative Rules Committee to take effect. ?
What does this do to the cost of U.S. oil production in the short run and long run?
How much does your answer depend on the nature of oil well costs, given the majority of the costs are purchasing the land, drilling, and shipping the oil, which are negotiated years in advance.
Do you think this policy will unfairly advantage large oil companies as compared to smaller ones? What would be the consequences if this was the case?
Explanation / Answer
The idea is to put parameter dikes on the things that they had previously constructed or drilled since 1951 as well as adding new pipeline requirement this will raise the cost of U.S. oil production in short run and reduce it in long run. The answer completely depend on the nature of oil well costs, as the majority of cost are purchasing the land, drilling, and shipping the oil, which are negotiated years in advance so in short run the cost are more than in long run.
No, this policy will not unfairly advantage large oil companies than smaller ones because large companies will have larger cost of nature of oil well and purchases of land, drilling and shipping while small companies can work in smaller areas. If this was the case then small companies would leave the oil production business and in the long run only large companies would be working in the oil business.