North Dakota Flares $100 Million of Natural Gas a Month

This article was written by Oilprice.com -- the leading provider of energy news in the world. Also check out these recent articles.

It is well known that advances in technology have enabled the US to experience a huge boom in oil production over the past several years. Since 2007, oil production from North Dakota's Bakken formation has increased by 4,000%, and turning the state into the second largest oil producer after Texas. The problem is that a natural by-product of oil extraction is natural gas, and due to the lack of infrastructure to store, transport, and compress the gas, nearly 30% has to be burned at the well in a process known as flaring.

Think Progress reports that an estimated $100 million worth of natural gas is flared in North Dakota every month, depriving the US economy of a huge source of revenue, and also releasing vast amounts of carbon emissions into the atmosphere.

On Wednesday, the North Dakota Petroleum Council, comprised of hundreds of companies, promised to try and resolve this problem and reduce the amount of gas being flared.

"The industry can increase natural gas capture to 85 percent within two years, 90 percent capture in six years, and could capture up to 95 percent of gas."

The New York Times wrote that "roughly six million tons of carbon dioxide into the atmosphere every year, roughly equivalent to three medium-sized coal plants," and "experts expect a 40 percent increase in the gas produced from the Bakken field by the end of 2015."

Such large volumes of gas are flared because the infrastructure doesn't exist to make use of it, and it hasn't been developed due to the fact that gas is worth so little. The North Dakota Industrial Commission estimated that the crude oil to natural gas price ratio was 30 to 1 for 2013.

Ron Ness, the President of the North Dakota Petroleum Council, stated"where would your emphasis be? If you've got a barrel of oil that's worth $95 and you've got [1,000 cubic feet] of gas ... that's worth $4.25, which infrastructure would you build first?"

In July 2013, CERES released a report in which it explained that "natural gas requires its own infrastructure to be collected and marketed, necessitating further investment. In the absence of a strong regulatory framework that prohibits flaring, companies working with a limited amount of capital (which is to say all companies) have a strong incentive to put their capital toward oil production, given its higher return relative to natural gas."

Oil companies generally don't have the money to develop huge levels of infrastructure to carry the natural gas off to market, so another alternative would be to slow down the rate of production, reducing the volume of natural gas extracted.

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  • Report this Comment On February 03, 2014, at 2:00 PM, pierrelpn wrote:

    "Oil companies generally don't have the money to develop huge levels of infrastructure to carry the natural gas off to market . . ."

    If oil companies don't have it, who does?

  • Report this Comment On February 04, 2014, at 12:24 AM, speculawyer wrote:

    That should be illegal. It is a waste of a valuable resource. It is unnecessary CO2 production.

    I understand why they do it, but I don't that should be allowed.

  • Report this Comment On February 04, 2014, at 1:17 AM, elfkin wrote:

    can I point out one other, thing that is being wasted, which prices continue to go higher and higher because we are running out.... helium, which is extracted out of natural gas/oil the stock pile is dwindling, prices are high for this rare element,

  • Report this Comment On February 04, 2014, at 6:52 AM, ThinkMn wrote:

    This is why we need regulations. Corporations will kill the planet for profits just like Ferengies of Star Trek fame. Time to tax them for the flaring to make it more profitable to capture than flare.

    We get to use every cubic foot of Natural Gas but once. Let's put it to good use. Someday we may regret all that we have wasted.

  • Report this Comment On February 04, 2014, at 11:19 AM, oldetowneteamfan wrote:

    How's that "Energy Independence" thingy working? I guess it's working so well that we can burn the gas for no good reason and ship other sources to other countries. Good thing the water isn't getting poisoned, right?

  • Report this Comment On February 04, 2014, at 12:45 PM, RLv2 wrote:

    If they don't 'flare' they will have a big explosion, people will die, energy will still be released into the atmosphere and radicals Left of the Motley Loons won't be happy...

  • Report this Comment On February 04, 2014, at 1:23 PM, TruthSpeaker17 wrote:

    Yah, the oil companies don't have the money to "waste" on capturing and utilizing the natural gas that permeates the air here in north Dakota. Big Oil controls the world's economies, and it will never be regulated. This world needs an enema.

  • Report this Comment On February 04, 2014, at 5:17 PM, Observer82AB wrote:

    Too low pressure. Too low volume. Much too expensive at this point. But should happen some day. I observed this when i worked there.

  • Report this Comment On February 04, 2014, at 11:51 PM, Exhillbilly wrote:

    Only a hundred million a month, Why bother. Couldn't this be used for generating electicity firly cheaply

  • Report this Comment On February 05, 2014, at 9:27 AM, ckshag wrote:

    this might sound foolish but garnishing ninety million dollars a month in wasted natural gas is a matter of national security for a nation that for too long was dependant on others for its energy

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