The North Dakota Industrial Commission has adopted new conditioning standards to improve the safety of Bakken crude oil for transport. Order No. 25417 sets operating standards for conditioning equipment to properly separate production fluids into gas and liquid. The order includes parameters for temperatures and pressures under which the equipment must operate to ensure that light hydrocarbons are removed before oil is shipped to market. The three-member commission approved Commission Order 25417 after receiving additional comments on the working draft which the Commission discussed on November 13, 2014. The new standard — Commission Order No. 25417 — requires operators to condition Bakken crude oil to a vapor pressure of no more than 13.7 pounds per square inch (psi).
National standards set crude oil stability at a vapor pressure of 14.7 psi. Under the order, all Bakken crude oil produced in North Dakota will be conditioned with no exceptions. The order requires operators to separate light hydrocarbons from all Bakken crude oil to be transported and prohibits the blending of light hydrocarbons back into oil supplies prior to shipment. Lynn Helms, director of the state’s Department of Mineral Resources, said the department’s Oil and Gas Division staff will conduct field inspections to enforce compliance. He said oil companies that do not comply could face a penalty of up to $12,500 for every day in violation. Commission members said the effective date of April 1, 2015, allows time for producers who want to utilize alternative conditioning or stabilization methods to request a hearing before the commission and also allows time for companies to install needed equipment. The commission developed the new oil conditioning standards after a Sept. 23, 2014 public hearing and receipt of additional comments. In considering new standards, the commission heard from a wide range of stakeholders including North Dakota residents and representatives from the energy industry. Also taken into consideration were recent crude oil quality and safety studies including the federal government study conducted by the U.S. Pipeline and Hazardous Materials Safety Administration.
First, this commission order was written as a matter of safety. Rail accidents across the country have drawn attention for the need to better understand how Bakken oil is produced and processed at the well site. The commission initially received 1, 114 pages of testimony from 33 groups or individuals, all providing input on how Bakken crude oil is produced and how to make it as safe as possible to transport. Subsequent to the November 13, 2014 Industrial Commission meeting the record was opened and an additional 141 pages of testimony from 25 groups or individuals were provided on the working draft order. Second, the resulting order is based on science from the testimony received. The goal is to produce crude oil that does not exceed a Vapor Pressure of 13.7 pounds per square inch (psi). National standards recognize oil with a Vapor Pressure of 14.7 psi or less to be stable. Allowing for a Vapor Pressure of 13.7 psi or less, adjusts for an error margin of one psi in the sampling procedures and measurement equipment. It’s important to note that winter blend gasoline has a Vapor Pressure of 13.5 psi. An estimated 80% of Bakken wells will be able to produce a product below 13.7 psi Vapor Pressure by complying with temperature and pressure parameters detailed in paragraphs 2a through 2c of the commission order.
(a) Operate all well site crude oil conditioning equipment within flow rate, pressure, and temperature ranges specified by the manufacturer.
(b) Operating at a pressure of no more than 50 psi must heat fluid to at least 110 degrees Fahrenheit.
(c) Operating at a pressure greater than 50 psi must heat fluid to at least 110 degrees Fahrenheit and install equipment to recover vapors from the crude oil storage tanks.
Roughly 15% of Bakken wells operate equipment described in item 2d. Operators will need to demonstrate through sampling and testing in compliance with national standards that the resulting product does not exceed a Vapor Pressure of 13.7 psi.
(d) Operating at temperatures and pressures not described in paragraphs (b) or (c) must demonstrate through sampling and testing in compliance with national standards that Vapor Pressure is no greater than 13.7 psi. The remaining 5% of estimated wells are expected to seek alternative methods for conditioning or stabilizing crude oil and must request approval from the commission through notice and hearing.
(e) Facilities utilizing alternate methods for crude oil conditioning other than separators and/or emulsion heater-treaters will only be approved after due notice and hearing.
Finally, the standards described in the order are enforceable. The Oil and Gas Division’s more than 30 field inspectors can visually inspect gauges on facility equipment to determine operating temperatures and pressures while oil and gas measurement staff can review and approve Vapor Pressure testing. Additional Department of Mineral Resources staff has been included in the Governor’s budget for dedication to western North Dakota. Operators found in violation of the order could be subject to a penalty of $12,500 a day. The order is effective April 1, 2015. In conclusion, with the strong science and enforceability of this order, the state of North Dakota will be requiring that every barrel of Bakken crude oil will be conditioned.
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