Flaring

Over at the Bakken Shale Discussion Group, they are discussing the issue of flaring.

Some data points and new links.

From the Bakken Formation Discussion Forum:

North Dakota Century Code states that gas can only be flared for 60 days after a well is completed without financial sanctions or production being limited to less than 200 bbls of oil per day. An absolute maximum of one year is available under special exemptions without paying taxes, royalties, or sanctions.

By the way, that entire "comment" is an excellent overview of the issue of flaring in North Dakota. I highly recommend folks going to the link who are interested in this issue.

There are at least two PDFs that provide additional information:

• NDIC source, narrative
• NDIC, rule book

According to one of the sources (PDF), "Typically wells are allowed to produce at a maximum efficient rate or MER for a period of time (generally 30 - 60 days) in order to evaluate the potential of the well and stabilize the production. After such time, the well production is then restricted to 200 bopd for another 30-60 days, then 150 bopd for an additional 30-60 days, and finally 100 bopd until the well is connected to a gas-gathering system. Further extensions may be granted provided certain conditions are met." -- Section 38-08-04 of the North Dakota Century Code.

Having said that, there may be more to the answer. Another source (PDF) states that "Currently, state law, under section 38-08-06.4 of the North Dakota Century Code, grants an exemption from payment of taxes and royalties to all new wells for one year from date of completion.

So, it appears that if the law hasn't changed, the "one-year rule" applies.

We will probably get a more definitive answer from the discussion group since I always defer to them if there are different opinions.

Interestingly enough, I do not recall having seen the Bakken Formation Discussion Forum before; if so, I have forgotten. It is now linked at the sidebar at the right.