Pipeline Permitting Delays In North Dakota

The story of North Dakota's flaring and crude by rail problems in one image: Natural gas flares from an oil well as an oil truck passes a site where a new pipeline is being laid.

Emily Guerin

The story of North Dakota's flaring and crude by rail problems in one image: Natural gas flares from an oil well as an oil truck passes a site where a new pipeline is being laid.

North Dakota oil producers were supposed to cut natural gas flaring by 74 percent as of October 1.  It is not likely that they have met that deadline - but we won't know until January when production figures are released.  October 1 was the first deadline for oil companies to get serious about curbing flaring, the process of burning off the natural gas that comes up from oil wells. There's a lot of gas in the oil here, and not enough pipelines (or pipelines that are big enough) in the ground to capture all that gas and take it it to a processing plant. So the companies burn it off, essentially wasting more than $1 billion worth of gas each year.

In June, regulators here passed new rules giving oil companies 90 days to reduce flaring.  Starting October 1, companies can't flare more than 26 percent of the natural gas they produce.  If they don't meet the standard, they can't produce as much oil.

But outside forces could make it hard for companies to meet that goal, as Ernest Scheyder reports for Reuters.

The main reason, according to Reuters interviews and reviews of regulations, is simple: a Byzantine web of state and federal agencies who must sign off on new pipelines.

Too few pipelines and a lack of plant capacity to prepare gas for transport means North Dakota flares enough natural gas in one month to heat more than 160,000 homes for a year.

The pipelines are caught between state officials whose top energy policy goal is to cut flaring, and federal agencies, which weigh historical and ecological issues, including protection of habitats for rare plants and animals.

The federal holdups are "a major disappointment," said Lynn Helms, head of the North Dakota Department of Mineral Resources. "It will make it harder to meet that 74-percent goal."

All federal agencies have to sign off on any new pipelines that cross their land. For companies looking to build pipelines out of North Dakota, that often means getting approval from the Bureau of Land Management, U.S. Forest Service and Army Corps of Engineers. There's also the Three Affiliated Tribes of the Mandan, Hidatsa and Arikara (MHA) Nation, which is smack in the middle of the Bakken oil field, and, of course, neighboring states like Minnesota and South Dakota.

Of course, that's not just an issue for pipeline companies. As Leigh Paterson reported, big wind projects in Wyoming also need a handful of approvals from private and public entities.

In North Dakota, the delays aren't confined to natural gas pipelines. Pipelines that would carry oil are also running into setbacks, as James MacPherson of the AP reports.

Enbridge is trying to build the 612-mile pipeline to carry 225,000 barrels of oil a day through northern Minnesota to a hub in Wisconsin. The pipeline was expected to be ready in early 2016, but because of a "longer than expected permitting process" in Minnesota, it likely won't be in until 2017, Enbridge spokeswoman Katie Haarsager said.

The lack of pipelines is a big reason why so much oil moves by rail from North Dakota to the rest of the country.  These permitting delays create another issue, in addition to flaring: more oil moves by rail, causing concerns for people around the country who live near railroad tracks.