How $1 Billion in Natural Gas Vanishes Into Thin Air

Producers in the Bakken: You have a problem.

Despite the huge gains in oil production that have come from the Bakken formation in North Dakota, producers in the region haven't found a way to market the natural gas from these wells, which has led to flaring it off. Aside from the environmental concerns of this technique, non-profit group Ceres estimates that flaring off gas is akin to throwing away about $1 billion in a year in potential revenue.

So why are all these producers tossing out that much potential? Because they simply haven't found a way to get it to market economically. To find out why fixing this issue is extremely difficult, tune in to the following video, where Fool.com contributor Tyler Crowe takes a look at some of the major factors that keep this problem from getting resolved.

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Read/Post Comments (10) | Recommend This Article (15)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

  • Report this Comment On August 11, 2013, at 11:11 AM, flhtcre wrote:

    To whom ever thought up the name for this forum , I say this " Stupid is as stupid does"

  • Report this Comment On August 11, 2013, at 11:33 AM, emjayay wrote:

    As long as these companies are permitted to extract our natural resources, they should be required to do whatever they have to so as to not waste them and create even more global warming. Flaring gas is using it to do nothing. They should be required to contain it and compress it and ship it, or build a pipeline first, or whatever it takes. If they don't think it's economically feasible, they shouldn't be permitted to do the extraction in the first time. It's not 1900.

  • Report this Comment On August 11, 2013, at 1:06 PM, toomuchgas wrote:

    Those who oppose pipelines are the ones that are making carbon pollution worse.

  • Report this Comment On August 11, 2013, at 1:22 PM, sagehopper wrote:

    And how much comes from swamps? How much comes from wastewater plants? How much comes from volcanism?

  • Report this Comment On August 11, 2013, at 4:41 PM, usairmrt wrote:

    I know a way to turn this wasted natural gas into electricity! It could be used at the well platforms or for home use. Its coming and oil is on the way out.

  • Report this Comment On August 11, 2013, at 8:30 PM, JasonFMcCullough wrote:

    This should be completely illegal. Flaring off at all should be illegal. It should be illegal to drill unless there is a place to put the product.

    Life on earth is on stake. Nothing less.

    The entire executive staff should be jailed for life.

    The fact is that methane leaks, the burning of tar sands products, all unconventional fossil fuels, and particular tar sands derived fossil fuels must end and it must end immediately. This may hurt many workers and a number of communities if governments don’t help. But it must happen.

    Unfortunately for all of us, the science is very clear: Tar Sands, Natural Gas leaks, and Coal will cause climate change to go beyond the control of humans. Worldwide, we have to fully stop using these fossil fuels 2030, with a rapid phase out occurring immediately. Only if the United States leads this effort do we have a chance.

    The consequences sound unreal, but they are true: there is now the probability that earth will go the way of Venus. If humans allow oceans to warm to the point where the 50+ million year buildup of methane hydrates currently sitting on ocean floors are released into the atmosphere, our planet will warm too much to support life. Earth will become another Venus.

    Between the unprecedented climate forcing by human use of fossil fuels + the release of methane hydrates – climate change will run away. Our surface temperature will go from 15C to 100C, and the oceans will boil away. This is where we are going. If we continue to burn coal and unconventional fossil fuels, this will happen in less than 300 years from now. The humans alive in 2100 will have such a different planet than we live on today as to be unknowable to us. We need to keep most known reserves of fossil fuels in the ground – regardless of what we fear that choice may do to our current immediate lifestyles.

    Our government must do more. Obama much do much more on this issue. We must lead and change the world.

    This is not science fiction. This is what science and the data tell us. Read about it. Study it. We can’t afford not to understand this. Listen to the leading scientists our world has to offer: Hansen, McKibben, etc.

    Please.

  • Report this Comment On August 11, 2013, at 11:02 PM, 21skidoo wrote:

    I totally agree with emajay. I know for a fact that there is a method for extracting the natural gas, which forms on top of crude oil deposits. Instead of burning it off, which is a waste of a natural resource, it could be tapped and capped and then fitted with a pumping system so that it could be pumped into tank trailers. It then could be transported a storage facility th be held for distribution as needed. Some years ago a huge deposit was discovered on thr North slope of Alaska. A piping system was installed to pump the natural gas from on top of the oil deposits and into abandoned Salt Domes for storage rather than providing it to the market, which would cause the price of natural gas to drop dramatically.

  • Report this Comment On August 12, 2013, at 4:56 AM, djconklin wrote:

    @sagehopper, An average adult breathes about 0.5 L of air per breath at rest. Normal air contains ~ 0.03 % of CO2 which gets enriched to 4 % of exhaled air. The difference, 3.97 % is what you exhaled. One mole of air at room temperature have a volume of ~22.4 L (use ideal gas equation p*V=n*R*T, p=pressure [bar], V=volume, n=amount in mole, R=ideal gas constant, T=temperature [Kelvin]). 1 mole CO2 is equivalent to 44 g.

    So, 0.5 L*(1 mole /22.4 L)*(44 g / mole) = 0.982 g or 0.034639oz for each breathe we take.

    A normal respiratory rate is somewhere around 8-14 breaths per minute. Given 1,440 minutes in a day, and assuming a normal respiratory rate of say 12 breaths per minute, and that respiratory rate doesn't vary much throughout the day, you'd have 12 * 1,440 = 17,280 breaths in a day.

    Given that there's about 7.5 billion people, that means we exhale some 97,422 tons per minute, or 1,623.7 tons per second.

    Industrial and commercial activites produce 2.5 million tons per second.

  • Report this Comment On August 12, 2013, at 4:57 AM, djconklin wrote:

    @ usairmrt, excellent idea--which means that they won't do it.

  • Report this Comment On August 14, 2013, at 6:51 PM, priely wrote:

    What the author forgot to mention is that each well is only allowed to flare for a specific period of time before it must capture the natural gas. Although like many government rules, it is possible to get these time periods extended.

    The main reason for flaring of natural gas, is the lack of pipeline capacity and avalibility, it is getting harder for a company to get easments for pipelines than ever before, and there is a lack of refrineries to process this gas into a usable form.

    There are currently plans for two refineries to be built in the Bakken, with one underway by MDU Resources who is partnering with Calumet. The first refinery to be built in the US for around 30 years.

    @ usairmrt, that is a great idea, and has been looked at, but is not currently feesable due to the amount of impurities in the gas.

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