North Dakota Regulators to Enforce Gas-Flaring Rules

The North Dakota Industrial Commission announced that it will begin to enforce regulations that reduce flaring of natural gas produced as a byproduct at oil wells. The state is currently burning significant quantities of natural gas because of inadequate pipeline and processing infrastructure.

Key Details

  • Flaring is the burning of excess natural gas from wells. Flaring occurs because pipelines are not available to transport the natural gas from a producing well, typically:
    • In the period it takes to build the pipeline to reach the functioning well (usually up to three years after the well begins producing); or
    • When natural gas is a byproduct of an oil well and will never justify the cost of a gas pipeline.
  • In April 2014, North Dakota burned off as much as 30% of the natural gas produced at oil wells (this figure does not include natural gas wells).
  • The volume of gas burn totaled 10.3 billion cubic feet valued at $50 million at spot-market prices.
  • Beginning in September 2014, oil producers must comply with production allowances at new and existing wells that limit flaring.
  • In addition, North Dakota has set goals to limit flaring to 23% of all gas by 2015, 10% by 2020, and potentially 5% beyond 2020.
  • Texas, which leads the United States in oil production, flares just 0.8% of the gas it produces, in part, because its more conventional wells have scale and concentration that make pipeline access less of a problem than the more dispersed fracking wells.

Implication

Natural gas generation produces 45% less carbon dioxide emissions compared to coal generation. Fracking has created large quantities of cheap natural gas that has allowed the United States to significantly reduce greenhouse gas emissions by shifting away from coal. However, if not controlled, flaring at the production wells can meaningfully offset the GHG benefits of the shale gas revolution.

More Information

WSJ: http://online.wsj.com/articles/north-dakota-regulator-sets-tough-gas-flaring-rules-1404257684

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Contributing Authors

Paul Quinlan Clean Tech Manager

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