North Slope operator gets hearing on nearly $937,000 in proposed gas flaring penalties

Mustang Holding LLC will get a public hearing in January on nearly $937,000 in penalties state regulators have proposed for burning off gas at its North Slope oil field without permission.

The Alaska Oil and Gas Conservation Commission set the hearing for Jan. 7 in Anchorage, according to a notice issued Tuesday. It covers two penalty orders for flaring at the Southern Miluveach Unit.

The commission says Mustang was told it wouldn't get permission to keep flaring, or burning off gas, for well testing after Oct. 31, 2025, and that regular production at the field began Nov. 22. The company kept flaring, according to its own reports to the commission, and the commission found that "the continued flaring was knowing and intentional."

The first order proposes $741,520 for about 112 million cubic feet of gas flared from November through March. The second, issued Oct. 16, proposes $195,214 for about 33 million cubic feet flared from April through July. Each penalty is twice the fair market value of the gas burned, which the orders say state law requires.

Mustang doesn't dispute that the flaring happened or how much gas was burned. It argued that regular production hadn't begun because its permanent production facilities weren't finished, and that the flaring was neither willful nor commercially motivated. The commission agreed that the flaring dropped each month and that the company didn't hide it, but kept both penalties as proposed.

The commission had granted a hearing on the first order in August and scheduled it for Oct. 20. The new notice adds the second order to the January hearing, which people can also join remotely. Written comments are due by the end of the hearing.