Statistics compiled by the Railroad Commission of Texas (RRC) tell a tale of booming production in the liquids-rich Eagle Ford Shale, with an increased emphasis on oil and condensate in the play and significantly more flaring of gas statewide. In North Dakota, where the Bakken Shale is booming, so is flaring, but that’s expected to change as new infrastructure comes online.

During the period of January-October 2011, production of condensate from the Eagle Ford increased 136% from all of 2010 to nearly 16.87 million bbl. Comparing the same periods, Eagle Ford oil production grew by more than 216% to nearly 13.84 million bbl, while gas well gas production grew by 93% to 212 Bcf.

Drilling permits issued for the Eagle Ford also shot up last year from 2010. Last year the RRC issued 2,828 permits to drill in the Eagle Ford, a 180% increase from the 1,010 permits issued during 2010. Rig activity continues to soar in the play, according to NGI‘s Shale Daily Unconventional Rig Count. For the week ending Jan. 13 there were 239 rigs actively drilling for oil and gas in the Eagle Ford, which marks a 94% increase over the 123 rigs operating one year ago.

Interest in flaring gas among Texas producers statewide more than doubled in fiscal 2011 from the year-ago period. In fiscal 2011 the RRC approved 651 permits to flare gas, more than double the 306 approved during the year-ago period (306), which was nearly double the number approved in fiscal 2009 (158). Statistics on flaring permits granted for just the Eagle Ford are not readily available.

Gas flaring in North Dakota is expected to drop by more than 100 MMcf/d or by two-thirds with more than 300 MMcf/d of gas processing capacity that is expected to be added this year to soak up the now unused gas, an official with the state Industrial Commission told NGI. This comes at a time when the state recently hit a landmark by producing a half-million barrels of oil production and 521 MMcf/d of gas production.

Additional gas processing capacity of about 1 Bcf/d is expected to cut volumes being flared significantly. Currently 34% of North Dakota’s average daily gas production is being flared, but that is slated to change over the course of 2012, according to Industrial Commission spokesperson Alison Ritter.

Three major gas processing plants with 100 MMcf/d capacity have come online at ONEOK Partners LP’s Garden Creek plant near Watford City, ND, Ritter said. There will be three processing plants by ONEOK Partners’ Bear Paw Energy LLC unit built this year. In addition, Hess Corp. plans to expand its 120 MMcf/d plant to 250 MMcf/d before the end of this year.

“We expect the flaring numbers to decrease exponentially,” said Ritter, noting that gas industry operators have committed to spend an additional $3 billion on infrastructure in the state over the next two or three years.

The Garden Creek facility will cut the state flaring by about 10%, she said. By the end of 2012 the state expects flaring to amount to be less than 10% of all gas produced in the state.

“Obviously, the natural gas industry was a couple of years behind the oil industry [in the Bakken], but now [it is] catching up,” she said.

In the meantime, the state Oil and Gas Division’s industrial commission is making it more difficult to continue flaring gas. After one year, producers are required to obtain an exemption to flare gas.

“They may have taxes placed on their well, and instead of granting exemptions to continue flaring, we may require them to seek alternatives to flaring through the research council that can provide temporary and some permanent solutions for the gas,” said Ritter. “We ask the producers why they can’t use the flared gas this way. The amounts being flared really haven’t gone up drastically. We have hung around the low 30% level for sometime now.”

In Texas according to RRC rules, operators are allowed to flare gas during drilling and up to 10 days after completing a well. Flaring typically is necessary because new wells do not have gas pipeline connections. Permits to flare are issued by the RRC for 45 days at a time for a maximum of 180 days. If operators want to pursue an additional 45 days past the initial 45-day flare permit time period, they must provide documentation that progress has been made toward establishing the necessary infrastructure to produce gas rather than flaring it.

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