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Winter weather causes slight drop in oil production

BISMARCK—Winter weather contributed to a slight slowdown in North Dakota oil activity in December, bringing the state's production down 1.3 percent to an average of 1.18 million barrels per day.

Director of Mineral Resources Lynn Helms said Thursday, Feb. 15, he expects to continue seeing modest decreases in oil production as cold, windy weather makes hydraulic fracturing and other operations more costly.

Oil production is projected to gradually climb in 2018 and break the state's record of 1.2 million barrels per day set in December 2014. Helms joked that his best prediction for when the record will be broken is "the first month that we get 30 nice days of weather."

Natural gas production dropped less than 1 percent in December to an average of 2.08 billion cubic feet per day, according to the preliminary figures.

Natural gas flaring decreased from 14 percent in November to 13 percent in December, with the figures falling within the gas capture target set by the North Dakota Industrial Commission.

The volume of natural gas flared was 273 million cubic feet per day in December, a decrease of about 10 million cubic feet, Helms said.

To put that into context, Helms said the volume of gas burned off is roughly equivalent to the amount of gas processed daily at the Hess Tioga Gas Plant, currently the state's largest gas processing plant.

Flaring continues to be higher on the Fort Berthold Reservation, with about 20 percent of gas flared in December.

Helms told the North Dakota Industrial Commission this week that delays to get pipeline projects approved by the Bureau of Indian Affairs are making it difficult for companies to reduce flaring on the reservation.

He cautioned that companies will not be able to meet the state's gas capture goals unless the federal right-of-way permitting process improves.

Officials have invited Interior Secretary Ryan Zinke to the Williston Basin Petroleum Conference in May in Bismarck. Helms said his goal is to get Zinke together with tribal, state and BIA officials to develop solutions.

In November, eight companies failed to meet the state's gas capture target, which requires companies to capture 85 percent of the Bakken gas produced.

One company is required to limit oil production on three wells in February for missing the goal, according to the Department of Mineral Resources. The other seven are not facing production restrictions because they meet an exception in the state's policy.

The state had 57 drilling rigs operating on Thursday, up from 38 that were active at this time last year.

About 77 percent of oil was transported out of the region by pipelines in December, while 9 percent was transported by rail, said Justin Kringstad, director of the North Dakota Pipeline Authority.