Shale Daily / NGI All News Access

Bakken Needs Pipeline Boom, North Dakota Governor Says

In North Dakota where a quarter of the booming oil production in the Bakken Shale play is moved by rail car or truck -- not pipeline -- North Dakota Gov. Jack Dalrymple Thursday urged the oil and gas industry to beef up the pipeline network in his state to keep up with rapidly growing production. Dalrymple spoke to more than 100 industry and government representatives at the state's annual pipeline summit in Bismarck.

"Do it as fast as you can, " Dalrymple said. Justin Kringstad, director of the state's pipeline authority, offered projections of North Dakota oil production -- now No. 2 in the nation behind Texas -- doubling to more than 1 million b/d by 2015. Kringstad said nearly 25% of the oil is shipped to market by rail or truck, and in the gathering process, nearly three-quarters of the production is carried by truck to rail and pipeline hubs.

Separately, reports from neighboring northeast Montana, in which parts of the Bakken and Three Forks shale plays spill over, concerns are growing regarding increased pollution, traffic and pressure on resources from oil/gas production. On the positive side, however, the economies in both states are humming at a time when other parts of the nation are still mired in the recession. For example, a local brew in Sidney, MT, Bakken Bock, was born last February as a child of the oil boom, its creators say.

"There's a lot of negativity that's coming out of the Bakken, the stress of traffic and everything," said Randy Olson, a vice president with Blue Rock Companies in Sidney, developer of the beer, in a local news report on beer sales exceeding initial expectations.

Meanwhile, production of natural gas, like oil, was exceeding everyone's expectations, too. Dalrymple addressed the negative side of that situation, alluding to more than one-third of the associated gas being produced in oil drilling being flared as a byproduct. "Waste bothers North Dakotans, and it bothers me," the governor said.

Kringstad emphasized at the summit that nearly $3 billion in infrastructure improvements are planned to process more gas and move it to market, and six major oil pipeline projects also are proposed. If they all get built, the state's pipeline network will have a 1.5 million b/d capacity for moving oil to out-of-state markets, Dalrymple said.

Officials with some of the companies with pipeline proposals, such as TransCanada, assured that the new lines will be built and operated safely. They contend that pipelines are the safest means of transporting the oil.

In eastern Montana gas flaring has prompted the creation of a Billings, MT-based company, G2G (gas-to-green) Solutions, that is marketing a trailer-mounted mini-gas plant to capture, liquefy and store gas at the oil well site, focused on the more than 1,000 wells in the Bakken that currently have no pipeline connection. North Dakota rules, however, allow the flaring of the gas for up to one year after production starts at a well; in Montana wells can flare for only 60 days, so the capturing technology has more of a market there.

As global climate change advocates point to a worldwide increase in the amounts of gas being flared largely due to the Bakken growth, Kringstad told local news media that "any technology" like the G2G approach is welcome to stem flaring. Depending on the well, G2G's technology can capture up to 75% of the natural gas liquids, providing another revenue source for the well operators and the mineral rights leaseholders.

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