To capture a commodity; oil industry spends billions to capture natural gasIn one of the largest efforts to capture a valuable commodity in the state, the oil industry is spending more than $3 billion in North Dakota to secure natural gas, officials said Friday.
By: April Baumgarten, The Dickinson Press
In one of the largest efforts to capture a valuable commodity in the state, the oil industry is spending more than $3 billion in North Dakota to secure natural gas, officials said Friday.
“This is an unprecedented effort by the industry to capture this gas,” said Ron Ness, North Dakota Petroleum Council president.
The Bakken’s potential production area is almost 15,000 square miles, Ness said. Infrastructure for capturing oil has not been built in the oilfield.
“You have a lot of the Bakken production in areas that have never before have had significant oil or natural gas production,” Ness said. “It takes time, and you have a very short season to do it.”
Infrastructure is being developed in North Dakota for storing natural gas. Until it is developed, natural gas is flared.
“For every barrel of gas, you are losing $6 of economic value,” Ness said.
North Dakota is flaring 100 million cubic feet of gas each day, according to the American Petroleum Institute. North Dakota Petroleum Council Vice President Kari Cutting said the number sounds high.
“All of the companies want to see it captured,” Cutting said. “It’s much better to sell it than flare it. Once we get the infrastructure in place, the gas will not be flared.”
Ness said there were eight gas plants under construction in North Dakota. Pipelines and gas processing plants are also under construction.
The Oil and Gas Research Council, the State of North Dakota and private parties have invested more than $3 million researching new technologies to capture and utilize natural gas at well sites, Ness stated in a letter to The Dickinson Press. These projects include generating electricity on-site from gas, compressing gas into cylinders for transportation by truck and using natural gas to fuel drilling rigs instead of diesel.
Ness also wrote in the letter that North Dakota Congress passed a sales tax exemption to provide incentives for the construction of natural gas infrastructure in 2009.
There are several reasons to invest in capturing gas, said Brent Brannan, Oil and Gas Research program director.
“It is important to capture natural gas for environmental reasons and economic reasons,” Brannan said. “We can sell this natural gas for profit.”
Tim Dworshak, owner of B D R Well Service in Medora, said the industry could use infrastructure to capture oil instead of burning it.
“Every time I drive by it, I think, ‘I could heat my house and millions of other ones,’” Dworshak said.