American Oil and Gas Reporter - August 2016 - 106

ConventionSection: North Dakota Petroleum Council

NDPC Finds Local Solutions For
Some National Issues
By Dan Larson
Special Correspondent
BISMARCK, N.D.-The North Dakota
oil patch has become a battleground between a federal government eager to
clamp down on emissions and a state
government protective of its role as the
primary regulator of operations in the
nation's second-largest oil producing region, according to leaders of the North
Dakota Petroleum Council.
As a result, the oil and gas industry,
while investing in improvements necessary
for regulatory compliance and facing continued market headwinds, often finds
itself in the middle, they report. "We
continue to see production falling while
the federal government is busy rolling
out new rules and the state is trying to
stay ahead of the game," assesses NDPC
President Ron Ness.
NDPC Chairman Eric Dillé, director
of government relations at EOG Resources
in Denver, says the slumping market is
forcing NDPC to stay vigilant so that the
constant flow of new federal rules does
not hamper recovery once the market revives. "Companies are working hard to
get through the slowdown," Dillé assesses.
"The industry always comes out of a slump
smarter about development. Our role is to
watch for federal overreach so we can get
back to work when things recover."
That role also calls for the industry to
have a say in North Dakota's electionyear politics. As NDPC's membership
prepares for its annual convention, scheduled for Sept. 19-21 in Minot, N.D., political issues are never far from the conversation.
In a GOP gubernatorial primary that
was described as "nasty" in news reports
and campaign television spots, Fargo
businessman Doug Burgum upset Attorney
General Wayne Stenehjem-who had won
Republican convention delegates' endorsement-in a June 14 primary. Burgum
will meet state Representative Marvin
Nelson, D-Rolla, in the general election.
"Burgum is not an unknown quantity,"
Ness offers. "He received the governor's
Theodore Roosevelt Rough Rider award

in 2009 after he founded a successful
software business and then a venture capital fund in Fargo. He has a staff of smart
people and I have found him to be a
good listener who is interested in learning
about our business."
Trump Energy Policy
North Dakota was at the center of this
year's presidential campaign on May 26
when Donald Trump, Republican candidate for president, delivered an energy
policy speech at the Williston Basin Petroleum Conference, held biennially in
North Dakota.
Addressing a sold-out crowd of 7,000
at the convention center in Bismarck,
Trump said he would push an energy
agenda as president that aimed for "complete American energy independence."
Declaring his full support for hydraulic
fracturing, Trump blasted his opponent
in the race for the White House and asserted that a victory for Democratic nominee Hillary Clinton, would "absolutely
knock out (fracturing). Do that, and you
are going to be back into the Middle East
. . . begging for oil again."
Trump promised to roll back the executive orders and federal regulations
impacting the energy industry enacted
under President Obama. In particular,
Trump vowed to head off the Environmental Protection Agency's move to redefine waters of the United States subject
to federal oversight, disengage from the
Paris climate agreement, and approve the
Keystone XL Pipeline project if a sufficient
proportion of the profits goes to the
United States.
Trump also thanked the North Dakota
delegation for its support during the primary. "You brought us over the line,
folks," he affirmed. "I will always remember that."
The new federal rules certainly have
not relented, but the state's push back
has not, either. In July, press accounts
note, North Dakota filed suit against the
federal government over EPA's methane
emission regulations (see story page 18).
In the lawsuit, Attorney General Stenehjem
says the rules exceed the agency's authority

106 THE AMERICAN OIL & GAS REPORTER

and are "arbitrary and capricious."
EPA issued the final rules in May as a
revision of Clean Air Act's New Source
Performance Standards. The agency says
the proposal is intended to reduce emissions of methane, volatile organic compounds and toxic air pollutants, and claims
the rules will cut methane emissions 4045 percent below 2012 levels by 2025.
"The EPA has made it clear it is not
going to back off what it sees as its
mission to cut emissions from oil and
gas operations," Ness remarks.
Powerful Irony
Other air quality and greenhouse gas
emission efforts by the Obama administration drew attention to North Dakota
this summer. Dillé points to an irony in
EPA's Clean Power Plan and its impact
on the state's efforts to reduce flaring of
associated gas across North Dakota.
"We have made tremendous strides in
capturing gas at the production level," he
describes. "With the investment our industry has made in infrastructure, we are
far ahead of our goals. But, if the Clean
Power Plan succeeds in reducing coalfired power in North Dakota, we could
see a backtrack."
Dillé says the large-scale natural gas
processing plants that have sprung up
across the Bakken require considerable
power to operate; which only can be supplied by the coal-burning generation fleet.
"The big gas processing plants are the
real horsepower behind our increasing
success in capturing gas," he notes. "Cut
back on that power supply and there may
be a problem."
The state also recognizes the potential
production impact of reducing coal-fired
electricity production. Lynn Helms, director of state's Mineral Resources Department, warned the House Committee
on Energy and Commerce on July 6 in
Washington about the Clean Power Plan's
potential environmental and financial
costs.
According to Helms' testimony, during
the next four years, electric power reductions to gas gathering and processing
facilities could result in flaring of 956

American Oil and Gas Reporter - August 2016

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