Almlie, Helms: Innovation leads, regs follow
In May 2017, Gov. Doug Burgum asked oil and gas pipeline operators with assets in the state to participate in a daylong conversation on the topic of spills. The meeting came on the heels of several high-visibility spills in the state, as well as the nationally publicized Dakota Access Pipeline (DAPL) protests.
Gov. Burgum’s message to the operators was that the public had zero tolerance for pipeline spills or leaks. Rather than threaten with a heavy hand of regulation however, he challenged the industry to apply technology and innovation to improve pipeline integrity and safety.
One result was the formation of North Dakota’s intelligent Pipeline Integrity Program (iPIPE), an approach that lets innovation lead and regulation follow, resulting in smarter, more practical policy. Here’s why it makes sense: In the age of social media, even small leaks can become big news, shared widely and perceived as a disaster. The cost of innovative technology and increased regulations could be a lot less than the price of lost social license due to public scrutiny.
On the other hand, regulators find it extremely difficult to keep up with the speed of technological innovation. Innovation is forward looking and proactive, whereas regulation is often backward looking. Regulation is in a race to keep up with innovation, if it’s working properly. So, how to break this cycle?
North Dakota’s answer was to have regulators mandate the result, but leave the process for getting there to industry. In the case of iPIPE, six major industry leaders stepped forward to work with the state’s oil and gas research and regulatory bodies, both under the direction of the North Dakota Industrial Commission, to foster creation and application of new technology to better detect and prevent pipeline leaks.
Each industry member contributes annually and commits to a multi-year program to ensure momentum. North Dakota provides cost match funding to the program, leveraging the available resources. Technology providers also provide substantial cost sharing to ensure they have a vested interest in the iPIPE process in return for a forum to test their products.
With coordination and support from the University of North Dakota’s Energy and Environmental Research Center, the iPIPE Technology Selection Panel hears presentations in a process some have likened to the television show “Shark Tank.” iPIPE hosts development and demonstration activities and provides feedback to advance the product offering closer to a commercial state.
Shared knowledge is at the core of iPIPE, as members share common challenges and solutions openly within this forum, elevating everyone’s performance in the safe delivery of oil and gas fluids to market. By their active participation, members demonstrate responsible citizenship to landowners, the general public, and regulators alike.
North Dakota’s progressive approach of funding cutting edge research to maximize economic benefits from its oil fields, while minimizing environmental impacts, is making a difference beyond its borders as well. Companies with no operations in North Dakota have joined iPIPE, applying beneficial technologies in such areas as the DJ Basin of Colorado, the Permian Basin in New Mexico and Texas and the Alberta Basin in Canada. iPIPE was among topics discussed at this year’s national “Energy Disruptors” conference hosted by energy data analytics provider Enverus.
Waiting for regulation often results in worse outcomes than being proactive about it. Regulation precipitated by an incident leaves regulators playing catch-up, companies playing defense, and the public mistrustful. Such regulation merely ensures the laggards meet minimum standards. Encouraging and supporting innovation allows operators to push the envelope on new technologies and best practices that regulation then follows.
Jay Almlie is a principal engineer at The Energy & Environmental Research Center at the University of North Dakota, and manages iPIPE on behalf of the consortium members.
Lynn Helms is director of the Department of Mineral Resources for the State of North Dakota.