Related Articles
Forward article link
Share PDF with colleagues

North Dakota's gas flaring challenge lingers on

Nearly a decade into its hydrocarbons boom, North Dakota, the US’ second-largest oil producing state, still struggles to limit natural gas flaring

Oil production continues to surge in North Dakota. The state's gas infrastructure capacity has always lagged output increases, despite a programme to control gas flaring put in place in 2014.

North Dakota's challenge has been that most of its produced gas is associated gas, dependent on oil production volumes. The state's oil output, dominated by the prolific Bakken play, has skyrocketed this decade, to 1.27m barrels a day this July from an average 308,000 b/d in 2010, according to the US Energy Information Administration (EIA). Gas output has more than kept pace, with gross production sextupling to 688.9bn cubic feet in 2017 from 114bn cf in 2010.

North Dakota's difficulties with gas reflect similar infrastructure constraints that have evolved in other key producing areas as the US shale-gas and tight-oil revolution progresses. Oil production increases in Texas are being constrained by a lack of available pipeline capacity, while similar difficulties affect natural gas liquids output in the Marcellus/Utica shale play in the US Northeast.

Gas capture

State guidelines on gas "capture" for sale or on-site use have evolved since 2014. According to current North Dakota Industrial Commission (NDIC) Order 24665 Policy Guidance, issued this April, producers should currently be capturing 85% of produced gas, rising to 88% from this November and to 91% from November 2020. The industry appears broadly to have adhered to the limitations, which are backed up by an incentives programme rewarding producers who exceed the targets. The Trump administration's aims to relax methane emissions restrictions from oil and gas operations don't yet appear to have elicited any change in North Dakota policies.

Despite the state's gas capture policy, North Dakota remains a major source of vented and flared gas. EIA figures indicate that producers there vented or flared 88.5bn cf of gas in 2017, down from a peak of nearly 130bn cf in 2014; but this is still 3.5 times the 24.5bn cf flared or vented in 2010 and the figure has been rising this year.

Gas venting and flaring increases greenhouse gas emissions and, industry officials note, wastes money for producers and landowners. Since 2013, North Dakota gas venting and flaring has been consistently higher than that of Saudi Arabia, with eight times the oil output, according to the World Bank's Global Gas Flaring Reduction Partnership.

Processing facilities

Oil and gas producers hope to further reduce gas flaring through new midstream projects. Kinder Morgan aims to increase the processing capacity of its Roosevelt gas processing plant to 260m cubic feet a day from the current 60m cf/d by installing additional pipeline capacity. Hess Midstream Partners and Targa Resources are developing a 200m-cf/d gas processing facility in McKenzie County, and other similar facilities are being added, most targeted for commercial operation in 2020, when the tightest level of gas capture regulations kicks in.

Local press reports suggest that some of these facilities may be delayed due to the state's tight labour market. For the longer term, North Dakota's regulators are studying the possibility of developing gas storage facilities, perhaps to store gas for up to five years to ensure flaring is limited.

The NDIC in September announced it had commissioned a study by the University of North Dakota's Energy and Environmental Research Centre to evaluate the feasibility of such storage. That study is expected to be delivered in December. It isn't clear yet whether it will also evaluate the commercial options that gas storage might provide.

Also in this section
Discord in Australian LNG damages Asia export hopes
7 December 2018
Broad collaboration is essential if a new wave of Australian LNG projects is to be competitive
New Petrobras boss gets warm reception
7 December 2018
Appointment of ‘Chicago Boy’ to head state-owned giant reinforces reform agenda optimism
Interview: Neptune champions its diversity
6 December 2018
With assets in Europe, North Africa and Asia-Pacific, the London-based firm sees value in its broad international portfolio