North Dakota to study gas storage as a flaring remedy

By Patrick C. Miller | September 18, 2018

Record oil and gas production from North Dakota’s Bakken shale—combined with state limits on flaring being exceeded—has resulted in the launch of a study to examine the potential of temporarily storing produced gas in geologic formations.

The North Dakota Industrial Commission last week approved a $140,000 study for the University of North Dakota Energy & Environmental Research Center (EERC) in Grand Forks to investigate produced gas storage. The EERC will provide a report to the commission in December.

“They’re going to look at the technology, what formation or formations would be the most suitable and what kind of regulatory or statutory problems might there be to go to the legislature,” said Lynn Helms, director of the Department of Mineral Resources. “We are looking forward to being the first state in the nation to actually capture produced gas and geologically store it to help the industry with the gathering and processing of natural gas.”

Helms on Friday reported that the North Dakota had set new all-time high oil and gas production records during July. Oil production was nearly 1.27 million barrels of oil per day, up 3.5 percent from June. Gas production increased 4.3 percent from the previous month to 2.4 billion cubic feet per day. In addition, Helms said the state set a new all-time record of 14,972 producing wells.

However, that news was tempered with the announcement that the oil and gas industry hadn’t met the 85 percent gas capture goal set by the state’s Industrial Commission. Statewide, gas capture was at 82 percent. On the Fort Berthold Reservation, it was at 76 percent. On Nov. 1 this year, the gas capture rate will go up to 88 percent.

With those numbers, Helms said he would be surprised if state regulators didn’t place production restrictions on some operators. As a result of a gas processing plant on the Fort Berthold Reservation being down for maintenance, he said some producers might not be penalized. But Helms noted that the North Dakota is in precarious position of wanting to encourage production while not wanting to lose natural gas resources to flaring.

“We don’t want to discourage infrastructure investment, but at the same time, we want to encourage oil production growth,” he said. “We’ve got to find some innovative solutions to fill that gap between increasing oil and gas production and the time that it takes to finance and construct gathering and processing.

“Also, in the long term, we understand that we’re going to have a problem with transmission capacity out of the state,” Helms continued. “This might be a solution until we reach that point, as well.”

Helms said the North Dakota Oil and Gas Division has done some basic preliminary modeling on the temporary storage of produced gas by pumping the preprocessed gas into a geologic formation for two to five years. It showed that about 70 percent of the stored gas could be recovered, but Helms hopes the EERC study will demonstrate that the number can be substantially improved with optimized geology and well design.

“Flaring destroys the gas and reduces the value to zero,” he added. “We’re hoping that we can be innovative with this stuff.”