Crude oil and natural gas production in the Bakken are at record highs, and with the surge in production has come infrastructure constraints and higher rates of flared gas, renewing concerns about possible production shut-ins. As gas production volumes exceeded gas processing capacity, the flaring rate in April 2018 rose to 15% of total monthly volumes –– precisely the current limit set by North Dakota’s gas capture plan and three percentage points above the 12% cap due to kick in this November. Rig counts, producers’ drilling plans and $70/bbl crude oil prices all point to further production growth, which means that without additional processing capacity — or a change in the gas-capture policy — it will be increasingly difficult for producers and processors to comply. Today, we look at the latest developments in Bakken gas production, gas-related infrastructure and the gas capture policy.
As we discussed last fall in There’s a Fire in the Night, the Bakken oil and gas industry has been struggling with gas capture and flaring issues for the better part of the last decade. There was a time, going back to 2011, when as much as 37% of produced gas was being flared as oil and associated gas production was on a tear and gas gathering and processing were struggling to keep up. That prompted the North Dakota Industrial Commission (NDIC) to require exploration and production companies (E&Ps) to file a “gas capture plan” (GCP) with their drilling permits and put in place flaring limits.
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The new rules limit flaring to one year after first production from a well, after which time producers have to do one of the following: connect the well to a gas gathering pipeline, cap it, or link it to an electrical generator or a compression or liquefaction system that consumes at least 75% of the gas onsite. The NDIC also set targets for reducing the share of produced gas that is burned off statewide: flaring no more than 26% of total gas production by November 2014, 23% by January 2015, 20% by April 2016, 15% by November 2016, 12% by November 2018 and 9% by November 2020.
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About the song
"Back in the High Life Again," written by Steve Winwood and Will Jennings, appeared on Winwood's fourth studio album of the same name, released in December 1986. It was recorded at Unique Recording Studio, the Power Station, and Giant Studio in New York City. The album was produced by Russ Titelman and Winwood. The single went to #1 for three weeks on the Adult Contemporary charts, and went to #13 on the Billboard Hot 100. “Back in the High Life Again" received a Grammy nomination for Record of the Year in 1988. The personnel on the single are: Steve Winwood (vocals, piano, synthesizer, Moog bass, mandolin, and drum programming), Jimmy Bralower (drum programming), Rob Mounsey (synthesizer), and John Robinson (drums). James Taylor sang harmony vocals on the cut. The LP reached #3 on the U.S. albums charts. Seven of the eight songs on the album were released as singles. It has sold over five million copies to date.
Steve Winwood, an English rock musician, is known primarily as a vocalist and keyboard player, but he also plays guitar, mandolin, bass, drums and violin. He started his professional career as the singer/keyboardist in The Spencer Davis Group, who had their first hit, "Gimme Some Lovin'," when Steve was 16 years old. He was also a featured player and vocalist in two other bands — Traffic and Blind Faith — before his solo career took flight. He has a long list of session work with various successful artists. Winwood has had two Billboard Hot 100 #1 singles: "Higher Love" and "Roll With It." He was inducted into the Rock and Roll Hall of Fame with Traffic in 2004. In 2005, he won a BMI Icon Award. He has received two Grammy Awards, and in 2011 he received the Ivor Novello Award for Outstanding Song Collection. He continues to record and tour to this date.
