The state of North Dakota has eased its flaring rules but plans to keep its gas capture goal of 88 percent. And the move will have a definite impact on the Oklahoma energy firms carrying out oil and gas exploration in the Bakken.
Bruce Hicks, Asst. Director of the North Dakota Mineral Resources Oil and Gas Division said the new goals will focus on increasing the volume of captured gas.
“It might appear that there could be some additional flaring going on with the leniency of some of these changes,” he told the Williston Herald. “But one thing to keep in mind is that the midstream projects out there that are going on were justified by the current production rates of wells.”
He explained there will be more of an effort to incentivizing investment in infreastructure.
“If the wells that are flaring are low producers, we shouldn’t really have an issue with those,” Hicks said. “It’s more the total volume they are worried about. So the (North Dakota Industrial Commission) wanted to make sure they are incentivizing the investment in gas capture infrastructure.”
Hicks said they also want to encourage investment in value-added projects, as well as infrastructure. This could include a petrochemicals plant, electrical generation, greenhouse projects, or use as rig fuels or for heating hydraulic fracturing water.
“There are a lot of projects out there that can use the gas in a beneficial way,” Hicks said. “Instead of selling the gas, use it.”
The commission will also allow more reasons for removing gas volumes from the state’s gas capture goals.
Wells in townships outside the Bakken core will also be able to subtract their volumes. That’s intended to allow the companies to show the volumes, to help prove that the wells are worth connecting to a gas capture system.
Producers will also be able to subtract flared volumes if the flaring was caused by another operator hooking onto the system. The new wells can pressure up the overall system, forcing other lines to flare.
The state’s review of its gas capture goals followed on a fifth month straight of missing its gas capture goals.
North Dakota’s gas production hit a record 2.532 billion cubic feet per day in September, according to the October production report, but it also flared 431 million cubic feet per day of that. the statewide gas capture was just 83 percent — short of the 85 percent goal in place at the time. That goal moved to 88 percent in November.
Hicks said the huge volumes of gas being flared in North Dakota were due to the combination of better technology and more wells being drilled in the core. During the downturn, many rigs moved into the core of the Bakken to dril. It is more economic to drill in the core, but gas-oil ratios are higher.