Activist group retracts warnings about midwest oil wells

downloadAfter receiving additional data from the government, an activist group has retracted an analysis that suggested energy companies were not taking steps to cut back on a controversial practice.

The Bakken analysis — named for North Dakota’s gigantic underground deposit of oil and natural gas — was published by the Environmental Law and Policy Center (ELPC). It focused on a practice known as “gas flaring” — burning natural gas instead of using or selling it. The analysis, released last month, found that hundreds of wells in North Dakota had not filed the necessary plans for saving excess gas produced in the course of extracting oil from wells. But after the Department of Mineral Resources provided more data — we’re not sure what kind of data, specifically — the ELPC retracted that conclusion.

The group posted the retraction notice on September 25, just four days after they presented the analysis at a news conference. It states why their recent evaluation of companies’ plans to capture excess gas might be wrong — and what they’re doing next:

As we began the second phase of our analysis of gas capture plans, we discovered the Department of Mineral Resources gave us additional data which our analysis did not account for. As a result, we are withdrawing the initial findings pending a full review. We will be re-analyzing the data to determine if the gas capture plans are doing what they are intended to do – reduce wasteful flaring.

Flaring is a common practice, and controversial issue in the state. Environmental groups call it wasteful and polluting, while gas companies suggest that it avoids putting a dangerous amount of pressure on the pipelines. In recent years, according to the U.S. Energy Information Administration, flaring has been the fate of about one third of the natural gas extracted from the ground in North Dakota — a much larger amount than in other states.

A gas capture plan, which states how much gas will be extracted from the ground, and what will happen to it, is “an important first step in reducing wasteful flaring,” according to the ELPC. The state requires drill permits filed after May 31, 2014 to include such a plan. A summary of the ELPC analysis notes that out of the 3,258 North Dakota gas wells that are supposed to have gas capture plans, nearly half keep that data confidential, and at least 463 have no plan at all.

The ELPC presented the analysis in a news conference at the state capitol on September 21. The findings also suggested that oil producers might not be complying with regulations that require them to reduce flaring by a significant amount over the next few years.

The news conference took place a few days prior to a decision by the state legislature to modify the timeline for North Dakota oil producers to reduce flaring over the next five years. At the same time, according to Forum News Service, the oil industry had been urging lawmakers to relax the existing goals to reduce flaring.

Some were immediately skeptical of the ELPC’s numbers, said Forum News Service:

Department of Mineral Resources spokeswoman Alison Ritter said the information [ELPC] presented at the press conference was incorrect and that the department stands by the gas capture policy.

We asked Ritter what data the Department of Mineral Resources provided ELPC, and how that might have invalidated the report. She couldn’t tell us:

You would have to talk to ELPC to determine what went wrong with their analysis. I can only speculate as to what went wrong.

We did a not retain a copy of the exact data we provided ELPC, since it was pulled from our system.

We don’t know whether the ELPC’s analysis factored into the state legislature’s decision to update the goals to reduce flaring, which came a day before the analysis was retracted. Ritter explained the new goals:

The goals previously were [to reduce flaring by] 85% by Jan 1, 2016, and 90% by 2020.

They now are 80% by Apr. 1, 2016, 85% by Nov. 1 2016, 88% by Nov 1 2018, and 91-93% by 2020.

According to an Associated Press story, the change in flaring reduction goals favored neither industry nor activists:

The decision Thursday by the state Industrial Commission pleased neither the industry nor environmental groups, but regulators said it’s a give-and-take aimed at putting more natural gas on the market to the benefit of both energy companies and consumers.

We emailed a spokesperson for ELPC, and will update this post if we hear back.

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