The Natural Gas Misconception

By Staff Report | April 22, 2013

Economics are not restricting natural gas-gathering efforts in the Bakken play. Natural gas prices may be low, but, in fact, “there is an economic incentive to reduce flaring,” says Jason Kringstad, director of the North Dakota Pipeline Authority. Flaring is a method used to dispose of associated gas at the top of a vertical stack to reduce the pressure created through oil extraction. “There is a big misconception that gas is being flared because it is priced so low,” Kringstad says. Associated gas produced from a Bakken or Three Forks Formation well has many uses outside of the methane used for heating. Natural gas liquids (NGLs) make up portions of the gas, and those NGLs can be sold for use in lighter fluid (butane), gasoline (heptane) or propane tanks (propane)

The main reason for continued flaring is directly linked to what happens below ground. A lack of takeaway capacity means associated gas must be flared, Kringstad explained in a webinar update on the state of flaring in the region. “We need to get more pipe in the ground,” he said. Currently, 71 percent of all associated gas produced in the oil and gas play is connected, captured and sold. Of the remaining 29 percent, 13 percent of the gas is connected to pipe but must still be flared for a number of reasons. The other 16 percent is flared because there are no pipelines present to gather and transport the gas. 

To reduce the 16 percent currently flared, the answer is simple: more pipeline takeaway capacity. For the other 13 percent, the solution is more complicated. When new wells come online, the compression rate increases in older wells, causing more gas to surface in the older wells, thus requiring a compression system to handle the increased pressure. In addition, the pipeline that is already in operation is not only at capacity, but it needs more frequent cleaning, or pigging. The process clears out NGL’s that settle within the pipes and reduce flow efficiency. “The other solution that needs to happen,” Kringstad said, “is to consider looping the systems. The pipelines are adequate enough to handle new gas coming online.” 

Each month, roughly 150 wells are connected to gas-gathering pipelines, and within the next six years, six gas-gathering plants will have expanded. The trend towards flaring reduction not only makes sense, but it is starting to happen. According to Kringstad, that trend is crucial to the region. “Over time, we expect the natural gas to outpace the crude oil. There is still a lot of understanding that we need to have. There is some substantial gas potential that is coming.”