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November 2011 • BAKKEN BREAKOUT
By Elliot Mann for the Tribune
yron Hanson looked out the window of his family’s farmhouse
and spotted what the locals call a stripper well, an old oil well that is nearing the end of functional use. Then, Hanson looked over at parts of the earth near the well, former reserve pits that have been a spot of consternation over the years since the well was drilled in 1958.
Hanson said that one disposal pit for the well’s used salt water was never lined, a process that better contains possible seepage. Other times, the disposal pit was filled too high, causing him to worry about the surrounding land and water. Little vegetation can be seen on those areas in particular, he said.
“I’ve got a couple of (reserve pits) on my land; they don’t grow anything,” Hanson said. “You can tell exactly where these reserve pits are because nothing grows on them.”
The North Dakota Industrial Commission Oil and Gas Division has recently released proposed changes to regulations for the crude oil and natural gas industry, particularly that reserve pits can no longer hold drilling liquid. The changes represent a scheduled,
biennial review of the state’s regulations. The proposed list of modifications runs about 30 pages deep, some are simple language changes that are relatively minor and others are specific, intensive changes that might seem like a foreign language to those outside of the oil patch.
Others represent easily defined costs, like a proposed increase for well bonds.
Representatives for the North Dakota Petroleum Council estimate that the changes in whole could add costs ranging from $200,000 to $400,000 per well. The average cost to develop a well has been estimated at $8 million. Using that high-end estimate of $400,000, the new regulations could represent a cost increase of about 5 percent to the cost of developing a well.
Even still, North Dakota Petroleum Council President Ron Ness voiced support for the major points of the proposed changes during a Nov. 1 hearing. The Council represents the businesses responsible for 98 percent of the 113 million barrels of oil produced in North Dakota last year.
Elliot Mann/for the Tribune North Dakota Petroleum Council president Ron Ness, front, said the oil companies that the council represents agree in principal to most of the major changes proposed by state regulators.
Ness said that most people were probably not expecting the bulk of oil companies to support the major rule changes because of the high price tag.
“You don’t see that happen everyday. Typically, you would see opposition to all of those costs. It’s an acknowledgement that we have to do it right,” Ness said. “It’s a pretty significant change on behalf of many of our members.”
Still, the Petroleum Council isn’t on
board with all of the proposed changes as they stand. Ness provided a 16-page list of the Council’s itemized responses to the proposed regulations, which he read to the state Industrial Commission at a Nov. 1 hearing.
The major changes The change that most Bakken-area landowners and oil producers would notice is the elimination of “wet reserve pits,” or pits typically used to store used drilling fluid and rock cuttings. If earthen, they are lined
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