Crude conditioning regulations start April 1

By The Bakken Magazine Staff | January 16, 2015

Starting April 1, crude produced from the Bakken pools of North Dakota will be less volatile than automobile or lawnmower gasoline. After months of in-person hearings and written commentary, the North Dakota Industrial Commission has made it official: crude produced in the state must meet certain temperature and pressure requirements before shipment. The crude conditioning order—No. 25417—requires the use of conditioning equipment to separate production fluids into gas and liquid to ensure that hydrocarbons such as natural gas liquids are not present during transport. The NDIC’s ruling places emphasis on the Reid Vapor Pressure of the crude. Although the RVP national standard for crude is roughly 14.7 pounds per square inch, the state has imposed a 13.7 psi limit on all transported crude.

“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,” NDIC said. In 2014, several private and government agencies performed Bakken crude characteristics studies. The results varied between the studies, but different testing methods were used.

The 13.7 threshold ensures that Bakken or Three Forks crude is at the state’s desired level of volatility. According to the Department of Mineral Resources, roughly 80 percent of all Bakken crude contains a 11.8 psi RVP.

For those producers who are not currently producing crude at or below the 13.7 level, equipment such as heater treaters or heated liquid separators placed on the well pad or on a gathering system must be used. Third-party testing will also be periodically required to verify the RVP numbers. The DMR will perform field checks on gauges placed on field equipment. Those found in violation of failing to condition crude to the 13.7 psi threshold will be subject to a $12,500 fine for each day the oil is left unconditioned.

Transload and pipeline operators are also linked to the oil conditioning regulations. Both must report crude loads to the DMR that arrive at a facility over the 13.7 number; a situation that the DMR said could require investigative work by all parties involved.

The new regulations do not allow for the blending of crude oil produced from the Bakken or Three Forks systems with liquids recovered from gas pipelines prior to oil sales, or the blending of crude with liquids such as condensate, pentanes, butanes or propane prior to sale.

Before arriving at its decision to implement the new conditioning and standards regulations, the NDIC received 1,114 pages of testimony from 33 groups or individuals before its initial hearing on the matter. Following the NDIC’s decision to reopen the subject for comment, the state received another 141 pages of testimony submitted by 25 various groups.