There is talk that natural gas flaring in the Bakken is peaking and will soon start to decline. But even the most optimistic forecast has the share of gas being flared falling from the current 30% plus to between 5 and 10% by 2020. That goal is still 10 to 20 times the 0.5% share of gas being flared in Texas. Can more be done to reduce Bakken flaring to Texas levels? Today we look at what it would take to slow Bakken flaring to a flicker.
In Part 1 of this series we described how most flaring in the Bakken gas results from lags in development of the infrastructure to gather, process and transport gas. About 300 MMcf/d of the 1.1 Bcf/d of gas produced in the oil-rich region is currently being flared, either because gas gathering capacity has not been built to serve new wells, or because the gathering capacity that has been put in place requires more compression and/or expansion. There is a big push on to build more gas processing capacity in the Bakken, and in Part 2 we described the efforts also under way to construct more gas gathering lines, new laterals and interstate pipeline capacity.
Both the volume and percentage of Bakken gas flared have been rising in recent years, sometimes (and as recently as February) topping 35%. But the North Dakota Petroleum Council’s (NDPC) Flaring Task Force believes it is achievable to increase Bakken gas capture to 77% by early 2015, 85% by early 2016, and 90%--or even 95%--by 2020 (see Figure #1). The effort to reduce flaring is multi-pronged, and includes a new law, new regulations, and plans by the private sector to make creative, onsite use of otherwise stranded gas. We will start with the new law. Last summer, North Dakota’s governor signed a bill (House Bill 1134) that tightens the requirements for oil and gas producers that flare associated gas, and gives producers new alternatives for using gas that for whatever reason cannot be piped to processing plants and to market. North Dakota Industrial Commission (NDIC) rules still allow associated gas from a new oil well to be flared for one year from the date of first production, and that period can be extended when warranted. If not extended, the state law used to give producers only three options—cap the well, connect the gas flow to a gas gathering line, or install an onsite generator that consumes at least 75% of the gas to make electricity. Now the new law gives producers some additional alternatives.
For instance, they can now install systems that consume at least 75% of the associated gas by compressing the gas into a liquid for fuel, or convert the gas into petrochemicals or fertilizer.