North Dakota gas flaring rules will hit companies on oil production

North Dakota is cracking down on oil and gas exploration in its shale formation, adopting the most stringent state rules to date to curb the burning of natural gas as waste.

Companies that fail to curb the amount of natural gas burned off, also known as flaring, and wasted as collateral of the state's booming oil production will face limits on the amount of oil they can pump.

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North Dakota's state Industrial Commission passed the policy Tuesday, setting goals for flaring in periodic steps through 2020, The Associated Press reports.

"There are going to be a couple of producers out there who will feel the pinch and are going to be scrambling," said Gov. Jack Dalrymple, who is also chairman of the Industrial Commission.

As the No. 2 oil producer in the nation behind Texas, North Dakota's daily crude output topped 1 million barrels in April for the first time.

Oil companies burn off gas that comes out of the ground, along with crude from wells when pipelines or demand can't absorb the amount of fuel being produced.