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Bakken Natural Gas Production Outpacing Oil, EIA Says

In North Dakota's Bakken Shale, the ratio of natural gas production relative to crude oil has been gradually increasing since 2008, and accelerating since 2014, according to a report released Tuesday by the U.S. Energy Information Administration (EIA).

The report coincides with EIA's nationwide projections issued earlier this month for robust gas production growth next year.

EIA tracks North Dakota's crude oil and gas production, more than 90% of which comes from the Bakken and Three Forks formations in the Williston Basin. While oil production peaked at 1.2 million b/d at the end of 2014 and has stayed just above 1 million b/d for most of this year, natural gas production has continued to increase, approaching nearly 2 Bcf/d in the most recent statistics.

"While oil production has slowed in North Dakota, natural gas production has continued to grow, reaching a record 1.94 Bcf/d in August 2017, or the energy equivalent of 334,000 b/d of crude oil, " EIA said. It noted the state still produces more than three times as much energy from oil as from gas.

The EIA researchers also said that in tight oil formations like the Bakken/Three Forks, more oil than natural gas tends to be produced during the initial phases of production, which reverses over time once pressure in the formation reaches what is referred to as the "bubble point."

In monthly reports by the North Dakota Department of Mineral Resources, director Lynn Helms has noted the growth in gas production relative to oil, as each month new records for gas production are set. The most recent statistics for September marked the first time gas production dropped month/month and oil production increased in more than three years.

Helms earlier this month said North Dakota soon would need more infrastructure to expand natural gas capture processes as flaring moves higher. He outlined a recent decline in gas production and predicted the Bakken would need at least two more gas processing plants built in the next two years and ultimately up to 2 Bcf/d of added processing capacity.

EIA cited North Dakota's past issues when insufficient infrastructure to collect, gather and transport gas supplies caused up to 35% of the Bakken supplies to be flared. Since the state set targets to cut flaring to 10% by 2020, volumes have declined by roughly 40%, from 350 MMcf/d to about 200 MMcf/d, according to EIA's analysis.

In EIA's most recent Short-Term Energy Outlook released in early November, a projection was offered for U.S. dry natural gas production to average 73.4 Bcf/d this year, a 0.6 Bcf/d increase compared with 2016, with expectations for it to grow another 5.5 Bcf/d in 2018.

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