Flare Reduction Direction

By Luke Geiver | January 26, 2015

Oil prices, for better or worse, could be the main driver for Bakken growth this year. Flare-reduction targets—recently overshadowed by constant price and future production speculation amidst low-price per-barrel numbers—should also be considered a major element impacting growth in the Bakken, again, for better or worse.  As of November 2014, roughly 775 Bakken pool wells were awaiting completion. Low oil prices are considered the main reason for the huge number of uncompleted wells, but North Dakota-imposed flare-reduction goals are also a large reason for the massive well backlog. In an effort to meet the state’s overall flare-reduction percentages, many operators held off completing wells. Doing so eliminated the massive flare volumes associated with newly completed wells brought online and helped the operator community achieve the state’s flare reduction totals. The impact of well-completion hold-offs is yet to be determined.

These flare-reduction efforts, combined with a unique tax trigger environment that could further cloud the timeline for the completion of new wells (plus this current backlog of wells), will eventually bring the topic of flaring back to the forefront, however. This month, our team focused on the new perspectives, technologies and strategies associated with flaring in the Bakken. Our findings indicate that the state of flaring is heading in a positive  direction, thanks to innovative technology and gathering options and that, for new or backlogged wells, processes are in place to help operators mitigate the difficulties of navigating the flare capture process.

The state of U.S. energy is in the midst of an unprecedented era, and is quickly becoming an energy producing superpower, according to Jack Gerard, president of the American Petroleum Institute. Gerard recently delivered his state of energy report, highlighting the mix of U.S. energy options and the role of oil and gas for the country. His report was not bias toward his constituents, however, as evidenced by his inclusion of detailed updates on several other energy sources, including wind, solar and biomass. Staff writer Patrick Miller wrote an in-depth summary on the state of energy, in “Top U.S. Energy Sources Through 2040,” on page 36.

Although our focus for February is on flaring, we couldn’t resist offering information on low oil prices and how they impact the Bakken. Armed with some incredible data from the North Dakota Department of Mineral Resources, we put our designers to work on an infographic that illustrates potential oil production outcomes at various oil prices. Sometimes, as most who have been to the Bakken can attest, it easier to understand the Bakken through visual experiences, so without a crystal ball filled with pictures from the future Bakken, we had to take a different approach.

Luke Geiver
Editor
The Bakken magazine
lgeiver@bbiinternational.com