Oil production surges, but so does flaring
WILLISTON -- North Dakota oil production saw a 6.4 percent jump in July, but the percentage of natural gas that was flared also grew because of mechanical and electrical problems at two gas plants, officials said Friday.
North Dakota produced an average of 874,460 barrels of oil per day in July, another all-time high for the state, according to preliminary figures released by the Department of Mineral Resources.
Director Lynn Helms attributed the surge in production to more hydraulic fracturing crews that got to work in July after a wet spring and stormy winter.
"We expect next month to be a big month as well," Helms said.
The percent of natural gas flared in North Dakota has been holding steady or trending downward since hitting a historical high of 36 percent in September 2011. But in July, it increased from 28 percent to 30 percent.
The volume of natural gas vented and flared grew from 8.1 billion cubic feet to 9.2 billion cubic feet, Helms said.
"That's a significant increase in volume," he said.
Two gas plants experienced outages in late June and July due to mechanical problems and weather-related electrical outages, Helms said. The fragility of the electrical grid supporting the gas plants highlights the need for a proposed Basin Electric Cooperative transmission line, Helms said.
"That is very badly needed," Helms said. "The transmission grid is running on maximum. It's pretty much full all the time. It's very sensitive to a thunderstorm going through."
The North Dakota Industrial Commission is beginning to talk about policy changes to more aggressively address flaring.
Helms projects that with current market trends, the state's percentage of natural gas that is flared won't get below 5 percent until after 2020.
"It doesn't look like the market gets us far enough, fast enough," Helms said. "It's going to take some regulatory policy."
In July, a record 218 wells were connected to natural gas gathering lines, which is critical to reducing flaring, said Justin Kringstad, director of the North Dakota Pipeline Authority.
"The key is to make sure that not only are we keeping up with the pace of drilling, but getting ahead of it," he said.
A new number Kringstad released Friday shows that the state added 2,400 miles of oil and natural gas pipelines in 2012, for a total of 17,540 miles of pipeline in North Dakota.
"We expect this type of pace to continue," Kringstad said.