With just minuscule movement downward in the amount of associated natural gas being flared, North Dakota’s top oil and gas official in his latest monthly report said that the state and industry are stuck at about a 28.5-29% level of flared associated gas.
While acknowledging that some on-and-off severe freezing weather has slowed the build out of new natural gas gathering systems and plants, Lynn Helms, director of the Department of Mineral Resources (DMR), said that two bills remain in the state legislature that would help cut down the percentage of flared gas. DMR supports both HB 1134 and SB 2370, he said.
There is a lot of push to make sure that there are more incentives to “remove the liquids from that flared gas,” Helms said. He noted that further analysis is being done, and that the causes for flaring percentages vary widely on a county-by-county basis and need to be addressed individually.
In the general context of flaring and various measures the state and industry are trying to address it, Helms specifically called out the new Bakken acreage acquisition by a newly formed unit of Magnum Hunter Resources, called Bakken Hunter LLC, as being a sign that there is light appearing at the end of the long tunnel of flaring mitigation options.
Calling it “something really refreshing” for flaring and Bakken development, Helms said Bakken Hunter bought a 20,000-acre portion of Samson Resources Co.’s assets as Samson exits the Williston Basin (see Shale Daily, Nov. 27, 2012). Oklahoma-based Samson has left North Dakota, according to Helms. The privately held Bakken Hunter unit has a proposal being reviewed by the state that drew skepticism at first but now is being looked at as something innovative regarding the spacing of wells and the ability to connect with processing and pipeline infrastructure to cut flaring.
“They’ve shown us a plan to realign all of their spacing units to line them up with a Oneok Partners LP gas gathering system [see Shale Daily, April 10, 2012]. So the whole idea is to rearrange the staging units so the well pads will line up with the gathering system, and the gas gathering system can be in place before the [oil] wells are ever drilled, so that Bakken Hunter’s [production] doesn’t flare,” Helms said.
“I think that is a good illustration of the work that the [North Dakota] Pipeline Authority and the Industrial Commission have been doing now as operators and midstream people working together to really try to solve the flaring problem.”
For this and other reasons, Helms said he remains convinced that the trend on the flaring graph, which had hit a record 33% last year, is moving in the right direction.
“I think we are starting to see the things we need to have happening to drop flaring from 29% to 5%,” Helms said. He added the caveat that “we are just starting to see this trend, however.”
The state and industry will never “really get to the bottom of the flaring issues” until gathering and processing plant systems are built out more completely, he said. “That is the ultimate solution.”
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