Proposal to End Exemptions for Flaring - KXNet - Bismarck/Minot/Williston/Dickinson

Proposal to End Exemptions for Flaring

People around the world are keeping their eyes on North Dakota and the amount of natural gas being burned off in oil country.

Pictures showing how western North Dakota "lights up" have been circulating thanks to Google Earth.

That light shows natural gas being flared on well sites.

Senator Tim Mathern introduced a bill that restricts how much gas is being wasted.

Oil producers can flare natural gas for a year without paying taxes or royalties on it.

They can also request extensions if they can't get the site connected to a natural gas pipeline.

Mathern's bill doesn't ban flaring but it does limit those exemptions.

It mandates that companies pay taxes and royalties after one year, even if the gas continues to be flared.

Mathern says the greatest amount of natural gas is produced in a well's first couple years.

But North Dakota Petroleum Council President, Ron Ness says the bill penalizes oil companies for something they can't control.

Ness says, "remember the law of unintended consequences, you have to have the cash flow for someone to fund the gas processors who are going to build the plants and make the commitments and we are doing, I think, a tremendous job in trying to make way here."

Senator Tim Mathern says the one year limit is a compromise between present industry practice and a future of no flaring.

"I have no question about the possibility of no flaring is happening in the future, I just don't think it's possible right now," says Mathern.

30% of the natural gas being produced is being wasted, which is worth over 100 million dollars a year in lost taxes alone.

Ness says the natural gas industry is investing four billion dollars in capturing additional natural gas by adding pipelines and expanding and building new natural gas processing facilities.