North Dakota Gas Flaring Litigation

North

Dakota
Gas

Flaring

Litigation

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North Dakota Press Release

Bismarck, ND October 16, 2013

Today North Dakota mineral owners filed ten class action lawsuits in North Dakota state district court against oil companies operating in North Dakota’s Bakken oilfield, seeking damages for natural gas flared – or burnt off into the atmosphere – from oil wells in violation of state flaring laws. Copies of the complaints filed are available at www.ndgasflaringlitigation.com

The named plaintiffs and the class members they seek to represent in each case are western North Dakota mineral rights owners who potentially have lost millions of dollars in royalties due to producers’ practice of burning off large quantities of gas rather than selling it. The lawsuits seek to force operators to comply with state law and pay royalties to mineral owners on the value of flared gas, and by so doing create a compelling economic incentive for producers to reduce and eliminate the wasteful practice of flaring. Bakken natural gas is some of the most valuable gas in the country due to its density of natural gas liquids (NGLs).

Flaring of natural gas from North Dakota oil wells is a controversial practice that has more than doubled in volume in the last two years, according to recent reports. NASA photos of flaring in North Dakota oilfields taken from space resemble a large urban area rivaling Minneapolis-St. Paul and Chicago in size. The North Dakota Industrial Commission, which regulates the state's oil and gas industry, is working hard to regulate the recent Bakken shale oil and gas boom and with public support is looking for ways to reduce wasteful wholesale flaring of valuable gas.

Gas flaring in North Dakota has risen meteorically over the past few years, triggering growing public concern on a local and national scale. In 1999, North Dakota flared only 3% of its gas production. The North Dakota Department of Mineral Resources announced recently that operators flared off 30% of the gas produced in July 2013. An estimated $100 million worth of gas is flared in North Dakota each month. In March 2012, a group of investors representing $500 billion in assets sent a public letter to twenty-one of the largest U.S. shale oil producers, asking them to reduce flaring because it might ultimately “threaten the industry’s license to operate.” On August 25, 2013, the Bismarck Tribune editorialized on the need for “a harder line” by the state on flaring.

North Dakota law allows limited flaring during the first year after an oil well enters production if certain oil production limits are followed; then after a year, a producer must apply for a written exemption for any future flaring. If it fails to do so it must pay royalties and state taxes on the flared gas. In the lawsuits, the plaintiffs allege that operators are flaring in excess of production limits during the first year, and flaring beyond a year without exemptions, and without paying royalties on flared gas, which violates North Dakota law. Presently around 1500 wells are flaring gas in North Dakota without connections to pipeline and processing plant infrastructure. Other wells supposedly have pipeline connections in place but producers continue to flare the gas anyway.

Counsel for the royalty owners are five law firms from North Dakota, Colorado, Texas, Montana and Wyoming with oil and gas and class action experience:

Baumstark Braaten Law Partners

Murdock Law Firm, PC

The Monts Firm

Balzer Law Firm,PC

Tarlow, Stonecipher & Steele, PLLC

For more information please contact Derrick Braaten at Baumstark Braaten Law Partners in Bismarck, ND 701-221-2911

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