Oil Boom Shifts The Landscape Of Rural North Dakota

Those familiar with the US oil and gas industry probably saw the now famous picture of North Dakota from space at night that depicts widespread natural gas flaring. As hydrocarbon production – primarily oil – rapidly increases, new wells in remote areas often flare natural gas until gathering pipelines are constructed to transport the gas to consumers.

Reducing flared natural gas volumes is a high priority for environmental and economic reasons, and a new North Dakota Pipeline Authority report discusses challenges and potential solutions. Much of the gas being produced is rich in liquids, which adds value to the resource and incentivizes gas sales.

“A common misconception regarding natural gas flaring in North Dakota is the belief that natural gas prices are currently too low in the United States to justify new gathering and processing infrastructure. This belief is based on the existing dry natural gas markets (methane) and could not be any further from the current reality in North Dakota. In actuality, the value of Bakken natural gas, including the natural gas liquids (NGLs), makes it very economically attractive to construct the required infrastructure to capture the resource.

Natural gas produced from the Bakken is very rich in NGLs (Figure 1). One thousand cubic feet (MCF) of raw natural gas from a Bakken well may contain around eight to twelve gallons of NGLs. These NGLs (ethane, propane, butane, and natural gasoline) are very valuable with the current market value of raw natural gas from the Bakken around $6.50-$8.00 per MCF.”

Bakken gas quality

Figure 1.

Read the entire report here.