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Hoeven pushes ‘state’s first’ national energy policy

Posted 9/11/13 (Wed)

By Neal A. Shipman
Farmer Editor

Senator John Hoeven (R-N.D.), who has been championing a state’s first approach to energy development in Washington, D.C., has gained a very important ally in Congress who also believes that the impacted states can do a better job of regulating portions of the oil and gas industry than can the federal government.
And that ally is non other than Senator Ron Wyden (D-Ore.), who is the chairman of the U.S. Senate Committee on Energy & Natural Resources.
“North Dakota has produced jobs, dynamic economic growth and rising incomes with a strong, pro-growth approach to energy development,” stated Hoeven. “Today, we’re the second largest oil and gas producing state in the nation. We contribute 10 percent of America’s crude oil, and we continue to grow.”
Which is why, according to Hoeven, that he invited Wyden to see firsthand how North Dakota’s states-first approach to energy development over the past decade has helped the state develop all of its energy resources in tandem with good environmental stewardship. And how the same thing can be done on a national level.
“The Bakken is right at the heart of a historic energy boom, which is rewriting the playbook for American energy,” Wyden said. “As Chairman of the Energy Committee, I want to see for myself whether federal policies are keeping up with the pace of development there, and how to make sure that the U.S. is protecting the environment while maximizing the economic advantages of Shale oil and gas. Sen. Hoeven graciously offered to show me around his home state, and I’m excited to take him up on his invitation.”
Hoeven and Wyden spent the better parts of last Friday and Saturday touring oil well and frac sites around Watford City, as well as visiting with local energy experts and community leaders who told Wyden that drilling for oil and natural gas in North Dakota can be environmentally sound and does not pose a risk to drinking water supplies.
“We’ve always known that the Bakken was here,” stated Kathy Neset of Neset Consulting Service Inc., one of the premier geology consulting companies operating in the Williston Basin. “We’re just unlocking it now.”
According to Neset, McKenzie County is in the deepest part of the Bakken formation, which is why there is so much drilling activity in the county.
With the Bakken and other major formations that are being developed so far below the surface, according to Neset, there is virtually no chance of contamination of drinking water supplies.
“In this part of the state, the water is 2,000 feet below the surface,” stated Neset. “The Bakken formation is 11,000 feet below the surface. And that means that there is 9,000 feet of rock separating the oil from the water.”
Neset also informed Wyden that there are three layers of protection from the well bore to the surface to protect the water sources.
“Underground, things are very well protected,” stated Neset.
Wyden acknowledged that geology differs across the country, and for that reason he said that a one size concept of regulating the oil and gas industry doesn’t fit.
“Good policy means giving states a wide berth,” stated Wyden.
“Would it be good policy if we said that states had the right below ground?” asked Wyden of Neset. “And the federal government’s role would be on chemical fluids and spill reports?”
“I would agree,” stated Neset. “North Dakota knows what’s the best for North Dakota. And California knows what’s best for California.”
And even Wyden agreed that North Dakota’s spill disclosures are the best in the nation.
“You (North Dakota) are the ‘gold standard’ when it comes to spill disclosure,” stated Wyden. “In North  Dakota when one barrel of oil is spilled, it is reported.”
And according to representatives of Whiting Oil and Gas Corp., the oil industry is working hard in North Dakota to be good environmental stewards.
“We’re prepared to respond to any oil spill accidents either on the surface or on Lake Sakakawea,” stated Blaine Hoffmann, Whiting’s Northern Rockies Division superintendent. “North Dakota is a model state where everyone is working together.”
One of Wyden’s main concerns was the need for improved infrastructure in the Bakken, especially when it comes to getting more pipelines in the ground to reduce natural gas flaring.
“We’re going to need new pipelines to get the gas to market,” stated Wyden. “And we need better pipelines that are state-of-the-art that will help us get rid of the methane gas and help reduce emission levels.”
According to Hoeven, the bulk of the oil that is being produced in North Dakota is being transported by truck and train instead of by pipeline.
And according to Jack Ekstrom, Whiting’s vice president of Corporate and Government Relations, reducing the number of gas flares is the goal of his company.
“Whiting is spending $1 billion in North Dakota this year,” stated Ekstrom. “We are currently flaring less than 10 percent, but our goal is to have zero flaring.”
Ekstrom also told Wyden that the amount of oil that can be recovered from the Bakken is incredible.
“This is the end of the beginning when it comes to the development of the Bakken reserves,” stated Ekstrom. “It is not the beginning of the end.”