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North Dakota House committee advances controversial energy bill

A North Dakota House committee voted Thursday in support of a complex energy bill backed by the industry but opposed by many landowners who view it as taking their property rights.

The House Energy and Natural Resources Committee voted 10-2 to give a “do-pass” recommendation for a bill dealing with pore space, or the cavity or void in an underground formation.

The proposal, Senate Bill 2344, was introduced following a study that found it may be economically viable to temporarily store natural gas underground as an alternative to flaring.

Supporters say the bill is needed to provide clarity for the industry on issues related to using the pore space underground to temporarily store gas. The bill also has implications for injecting carbon dioxide underground to enhance oil recovery, as well as saltwater disposal well operations.

Committee members adopted amendments to the bill Thursday that some landowners said made the proposal more “palatable,” but they continued to oppose it.

The Northwest Landowners Association raised concerns about unintended consequences of the bill, including impacts to landowners who are paid for the injection of produced water into saltwater disposal wells.

Chairman Troy Coons said the bill as amended “remains offensive to what we stand for.”

The North Dakota Farmers Union also is among groups opposed to the bill. Lobbyist Kayla Pulvermacher said landowners are “sort of getting steamrolled.”

Supporters say language in the bill is needed to clarify legislative intent after a recent North Dakota Supreme Court decision caused some uncertainty for the oil and gas industry.

Denbury Resources, which is developing a carbon dioxide enhanced oil recovery project in southwest North Dakota, supports the bill. The company said in prepared testimony that failing to pass the bill would cause “significant legal and cost risk” that could put the project in jeopardy or make it a lower priority.

Lyn James, president of the Bowman City Commission, testified in support of the bill Thursday because local residents want the enhanced oil recovery project to move forward.

During discussion of the bill, committee member Rep. Matt Eidson, D-Grand Forks, raised questions about what is considered temporary use of pore space and what is permanent use.

Director of Mineral Resources Lynn Helms said the North Dakota Industrial Commission would develop rules and an enforcement process to decide how long storage can be considered temporary.

The oil industry is exploring temporarily storing produced natural gas in an underground formation and retrieving it years later after the state catches up with gas processing plant capacity and other infrastructure. Natural gas production is projected to peak in 2037, Helms said.

“It’s possible that under the Industrial Commission rules that we would allow 20 years before that gas had to come back out of the ground and go to market,” Helms said.

The committee recommendation on the bill fell along party lines, with Republicans supporting it and Democrats opposing it. Committee chairman Rep. Todd Porter, R-Mandan, one of the bill’s sponsors, called it “a balanced piece of legislation.”

The next step for the bill is a vote on the House floor, but it was not clear Thursday when that would be scheduled.

Blackout Energy is an industrial equipment provider located in Williston, North Dakota that offers heaters, light towers, coolers, frack stands, and fuel rigs for other businesses. The views and opinions expressed in this article are strictly those of its authors and were not written by Blackout Energy. This article was originally published by Bismarck Tribune.