§ 38-08-06.4 — Flaring of gas restricted - Imposition of tax - Payment of royalties - Industrial commission authority

North Dakota § 38-08-06.4

• Jurisdiction: North Dakota
• Title 38: Mining and Gas and Oil Production
• Ch. 38-08: Control of Gas and Oil Resources

Text

Industrial commission authority.
1. As permitted under rules of the industrial commission, gas produced with crude oil
from an oil well may be flared during a one-year period from the date of first production
from the well.
2. After the time period in subsection 1, flaring of gas from the well must cease and the
well must be:
a. Capped;
b. Connected to a gas gathering line;
c. Equipped with an electrical generator that consumes at least seventy-five percent
of the gas from the well;
d. Equipped with a system that intakes at least seventy-five percent of the gas and
natural gas liquids volume from the well for beneficial consumption by means of

compression to liquid for use as fuel, transport to a processing facility, production
of petrochemicals or fertilizer, conversion to liquid fuels, separating and collecting
over fifty percent of the propane and heavier hydrocarbons; or
e. Equipped with other value-added processes as approved by the industrial
commission which reduce the volume or intensity of the flare by more than sixty
percent.
3. An electrical generator and its attachment units to produce electricity from gas and a
collection system described in subdivision d of subsection 2 must be considered to be
personal property for all purposes.
4. For a well operated in violation of this section, the producer shall pay royalties to
royalty owners upon the value of the flared gas and shall also pay gross production tax
on the flared gas at the rate imposed under section 57-51-02.2.
5. The industrial commission may enforce this section and, for each well operator found
to be in violation of this section, may determine the value of flared gas for purposes of
payment of royalties under this section and its determination is final.
6. A producer may obtain an exemption from this section from the industrial commission
upon application that shows to the satisfaction of the industrial commission that
connection of the well to a natural gas gathering line is economically infeasible at the
time of the application or in the foreseeable future or that a market for the gas is not
available and that equipping the well with an electrical generator to produce electricity
from gas or employing a collection system described in subdivision d of subsection 2 is
economically infeasible.